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Richard Nixon Presidential Library
White House Special Files Collection
Folder List
Box Number
Folder Number
Document Date
Document Type
Document Description
17
10
10/22/1968
Memo
Memo from Ken Khachigian to Key Issues
Committee concerning housing. 5 pgs.
17
10
05/29/1968
Report
The Relocation and Assistance Act of 1968
in the Congressional Record- House. 2 pgs.
17
10
12/11/1967
Report
A Plan for Urban Home Ownership from the
Republican Coordinating Committee. 2 pgs.
17
10
05/24/1968
Report
Housing and Urban Development Act of
1968 in the Congressional Record-Senate. 19
pgs.
17
10
07/01/1968
Report
The Omnibus Housing Bill Contains Many
Proposals Sponsored by the Minority in the
Congressional Record-House. 3 pgs.
17
10
04/05/1968
Newsletter
Here's the Issue Volume 7, Number 6. The
Housing and Urban Development Act. 6 pgs.
Friday, May 22, 2009
Page 1 of 2
Box Number Folder Number
Document Date
Document Type
Document Description
17
10
n.d.
Report
Differences Between Rent Certificate
Program (GOP) and Rent Supplemental
Program (Dem.). 1 pg.
17
10
09/23/1968
Memo
Memo from Casey Ireland, Minority Staff
Member, to William Widnall. RE:
Presidential Instructions to HUD to More
Than Double Production of Low Income
(Public Housing) Units. 4 pgs.
17
10
09/12/1967
Report
Press conference transcript of Robert
Weaver, Secretary, Housing and Urban
Development and Joseph Califano, Assistant
to the Pressident. 7 pgs.
17
10
1968
Book
Tomorrow's Transportation. Department of
Housing and Urban Development. 100 pgs.
Only cover scanned.
17
10
06/13/1968
Report
Airport Development Act of 1968 in the
Congressional Record- Senate. 3 pgs.
17
10
06/04/1968
Report
Lots of Luck in the Congressional Record-
House. 2 pgs.
17
10
06/04/1968
Memo
Memo from Ernest Corrado, American
Merchant Marine Institute to Lon Woodbury.
Subject: Reasons for Mr. Nixon's Support of
Positive and Creative Maritime Policy and
Program. 4 pgs.
Friday, May 22, 2009
Page 2 of 2
1000:
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ONLY
TO: KEY ISSUES COMMITTEE -- ATTENTION JERRY FRIEDHEIM AND CHUCK COLSON
FROM: KEN KHACHIGIAN -- OCTOBER 22, 1968
HERE IS THE HOUSING STATEMENT. THERE IS A RUSH ORDER ON
THIS, AND IT HAS ALREADY GONE OUT TO THE RN TOUR. I WOULD APPRE-
CIATE IT IF KIC COULD GIVE IT QUICK SUBSTANTIVE REVIEW FOR ANY
POSSIBLE ERRORS. IT HAS BEEN CLEARED THROUGH ALL PARTIES ON THIS
END.
EARLIER THIS YEAR, IN A NATIONWIDE RADIO ADDRESS, I TALKED ABOUT
STEPS WHICH COULD BE TAKEN TO ATTACK THE PROBLEMS OF SLUM HOUSING.
RATHER THAN SPENDING HUNDREDS OF MILLIONS TO CLEAR MORE SLUM ACHES,
TO DISPLACE MORE FAMILIES, AND TO BUILD MORE PUBLIC HOUSING, I
OUTLINED IMAGINATIVE ENLISTMENT OF THE PRIVATE AND THE INDEPENDENT
SECTORS, ENCOURAGEMENT OF PRIVATE OWNERSHIP, AND DEVELOPMENT OF THE
PRIDE THAT CAN ONLY COME FROM INDEPENDENCE.
TODAY, I WANT TO EXPAND UPON THAT DISCUSSION AND PROPOSE A PROC
WHEREBY AE CAN, BEGIN THE TASK OF REBUILDING THE CENTER OF THE AMERI-
CAN CITY
THE CONTINUED DETERIORATION OF AMERICAN CITIES, THE ENTRAPMENT OF
DISADVANTAGED AMERICANS IN UGLY GHETTOS AND THE CIVIL DISORDERS OF
RECENT YEARS UNDERSCORE THE FAILURE OF THE OLD WAYS. THE JOHNSON-
HUMPHREY ADMINISTRATION HAS MADE PROMISES WHICH HAVE NOT--AND IN
MANY CASES COULD NOT--BE KEPT. MY ADMINISTRATION WILL END THE GAP
BETWEEN PROMISE AND PERFORMANCE.
DESPITE THE VOLUMINOUS AMOUNT OF HOUSING LEGISLATION ENACTED INTO
LAW OVER THE YEARS, THERE HAS BEEN RELATIVELY LITTLE PROGRESS TOWARD
A TRUE WORKING PARTNERSHIP BETWEEN THE GOVERNMENT AND PRIVATE INDUS-
TRY IN THIS AREA. OUR PRESENT NEED, THEREFORE, IS FOR A GREATER
VOLUME OF HOUSING PRODUCTION UNDER EXISTING LAWS RATHER THAN A
VOLUME OF NEW LEGISLATION.
THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, THOUGH CHARGED WITH
ENCOURAGING THE MAXIMUM CONTRIBUTION OF PRIVATE CONSTRUCTION AND
FINANCE TOWARD URBAN PROBLEM-SOLVING, HAS BECOME ENTANGLED IN AD-
MINISTRATIVE CHAOS. ITS POLICIES AND ATTITUDES HAVE DI SCOURAGED,
RATHER THAN ENCOURAGED, THE FULL INVOLVEMENT OF PRIVATE ENTERPRISE
IN OUR URBAN HOUSING PROGRAMS.
MY ADMINISTRATION WILL APPROACH THIS PROBLEM ON TWO BROAD FRONTS.
FIRST, WE WILL BEGIN BY REVIEWING AND EVALUATING EXISTING FROGRAMS
AND THEN ALLOCATE PRIORITIES TO THOSE PROGRAMS WHICH HAVE THE GREAT-
EST POTENTIAL FOR PRODUCING THE HOUSING THAT IS SO URGENTLY NEEDED IN TE
BLIGHTED NEIGHBORHOODS OF OUR CITIES. AVAILABLE FUNDS MUST BE
CONCENTRATED ON THE PROGRAMS THAT WILL PRODUCE THIS HOUSING. THE
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WILL HAVE A MANDATE
MY ADMINISTRATION TO ACHIEVE THIS GOAL.
SECOND, MY ADMINISTRATION WILL ACT TO IMPROVE COMMUNICATION AND
UNDERSTANDING BETWEEN THE PRIVATE HOMEBUILDING INDUSTRY AND HUD.
INCENTIVE-DESTROYING RED TAPE AND THE PRESENT BOREAUCRATIC OBSESSION
FOR MAKING EVERY DECISION AT THE FEDERAL LEVEL WILL BE ELIMINATIO.
WILL
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AMOUNT
was
COPY
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BE LOOKED TO TO DEMONSTRATE HOW THE JOB CAN BEST BE DONE. THE
IMPLEMENTATION OF THESE PROGRAMS WILL REFLECT AN AWARENESS THAT THE
GREAT MAJORITY OF LOCAL PROBLEMS ARE BEST APPROACHED THROUGH LOCAL
INITIATIVE, WITH ONLY SUCH INVOLVEMENT OF THE FEDERAL GOVERNMENT
IN THE FREE ENTERPRISE PROCESS AS PROVES ABSOLUTELY NECESSARY.
1
KNOW, ALSO, IF FREE ENTERPRISE IS TO REALIZE ITS FULL POTENTIAL,
THERE MUST BE THE OPPORTUNITY FOR REASONABLE, HONEST PROFIT. TANSIBLE
OINVOLVEMENT OF PRIVATE INVESTMENT AND PRIVATE INDUSTRY IN OUR ORBAN
PROBLEMS WILL RESULT IF THE OPPORTUNITY FOR SUCH PROFIT IS MADE
POSSIBLE BY AN UNDERSTANDING GOVERNMENT. MOREOVER, THE STRUCTURE
OF HUD AND ITE REGULATORY PROCEDURES MUST BE SIMPLIFIED IF OUR ORMAN
PROGRAMS ARE TO BE TRULY WORKABLE. THE OVERLAPPING OF AUTHORITY
FOR PROGRAM ADMINISTRATION MUST BE CORRECTED
THE ULTIMATE MEASURE OF SUCCESS IN OUR EFFORTS TO REBUILD OUR NATION'S
DETERIORATED NEIGHBORHOODS AND TO PRODUCE THE HOUSING THAT SO MANY
OF OUR CITIZENS URGENTLY NEED RESTS NOT ON LAWS ALONE. RATHER, IT
DEPENDS HEAVILY ON THE EXTENT TO WHICH WE BRING ABOUT THE FULL
INVOLVEMENT OF OUR NATION'S PRIVATE SECTOR AND ALL OF ITS PROVEN
INITIATIVE AND MASSIVE RESOURCES IN SEEKING TO ACHIEVE OUR NATIONAL
GOAL OF URBAN BETTERMENT.
AS 1 HAVE INDICATED, THE FAILURE OF EXISTING PROGRAMS LIES IN THE
LACK OF ALLOCATING PRIORITIES TO THOSE PROGRAMS WHICH HAVE THE
GREATEST POTENTIAL FOR REBUILDING THE CENTER CITIS. ONE OF THE
PRIORITIES OF A NIXON ADMINISTRATION WILL BE TO EMPHASIZE PRIVATE
BOMEOWNERSHIP IN THE BLIGHTED AREAS OF OUR COUNTRY IT IS MY GOAL
TO PROVIDE THE OPPORTUNITY THROUGH A COMBINATION OF PUBLIC AND
PRIVATE EFFORT FOR MILLIONS OF DISADVANTAGED AMERICANS FOR THE FIRST
TIME TO OWN THEIR OWN HOMES.
SENATOR EDWARD BROOK HAS SUCCINCTLY STATED THE CASE FOR HOMEOWNER-
SHIP:
HOMEOWNERSHIP CAN BE OF FAR GREATER BENEFIT TO THE
POUR THAN 4 MERE ROOF AND FOUR WALLS. HOMEOWNERSHIP CAN BE F SOURCE
OF PRIDE AND STABILITY, INFLUENCES THAT WILL EXTEND TO THE HOME-
OWNER'S JOB AND FAMILY LIFE.' YET, AMONG NON-WHITES, ONLY 38 PERCENT
(15 ALL HOUSING UNITS ARE OWNER-OCCUPIED WHILE 62 PERCENT ARE RENTED.
I AM PROUD TO NOTE THAT REPUBLICAN MEMBERS OF THE SENATE AND HOUSE
OF HEPRESENTATIVES GAVE THE TRUE INITIATIVE TO THE HOMEOWNERSHIP
PRINCIPLE IN OUR HOUSING LEGISLATION. AND IN MY ADMINI STRATION
THAT INITIATIVE WILL BE CARRIED ON TO GIVE PRIVATE HOMEOWNERSHIP A
GREAT IMPETUS.
THE TECHNIQUE OF THE CURRENT ADMINISTRATION IS TO PROMISE MORE
FEDERAL MONEY, MORE URBAN RENEWAL AND MORE PUBLIC HOUSING. BUT The
NUMBER OF HOUSING UNITS DESTROYED BY URBAN RENEWAL IS ESTIMATED
TO BE FOUR TIMES GREATER THAN THE NUMBER CREATED.
FEDERAL CONSTRUC-
TION PROGRAMS DISPLACE ABOUT 73,000 FAMILIES AND INDIVIDUALS PER
YEAR, AND YET, IN URBAN AREAS, 14 PERCENT OF ALL HOUSING UNITS ARE
STILL CONSIDERED SUBSTANDARD. AN ESTIMATED TWO-THIRDS OF THOSE
DISPLACED BY URBAN RENEWAL PROJECTS ARE MINORITY GROUPS FOR WHOM THE
PROBLEM OF RELOCATION IS OFTEN MOST DIFFICULT.
EUSLIC HOUSTNA BY PTSKLE 11. 201 AN EFFECTIVE AWSWEN 10 THE WASSIVE
PROPLEMS WHICH FACE OUR CITIES AND DEPRESSED RURAL AREAS. IT SIMPLY
CANNOT BE BUILT FAST ENOUGH AND IN SUFFICIENT QUANTITIES TO MEET 008
NATIONAL NEEDS. MOREOVER, PUBLIC HOUSING ONLY UPGRADES THE MATERIAL
SURROUNDINGS WITHOUT GIVING ITS RESIDENTS THE SAME SENSE OF
RESPONSIBILITY WHICH COMES FROM PRIVATE HOMEOWNERSHIP. ONE EXPERT
"DURING THE LAST THIRTY-ODD YEARS THAT THE NATION
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3
INVOLVED IN THE HOUSING BUSINESS, IT HAS ONLY BUILT A LITTLE MORE
THAN 600,000 UNITS. THAT MEANS JUST ONE PERCENT OF THE NATION'S
HOUSING SUPPLY HAS BEEN BUILT FOR ACCOMMODATION BY LOW AND MODERATE
INCOME FAMILIES.
ONE SOLUTION TO THESE PROBLEMS -- AND SOMETHING TO WHICH I WILL GIVE
PRIORITY IN MY ADMINISTRATION -- LIES IN TAKING THE HOMEOWNERSHIP
PRINCIPLE AND EXTENDING IT INTO THE CENTER OF OUR URBAN AREAS. 17
GIVEN THE PRIORITY IT REQUIRES, IT WILL CONVERT TENANTS INTO HOME-
OWNERS. IN THE MULTI-UNIT DWELLINGS WHICH DOMINATE THE HOUSING IN
OUR CITIES, HOMEOWNERSHIP CAN BE BROUGHT ABOUT THROUGH THE USE OF
AN AGE-OLD, BUT NEGLECTED, CONCEPT OF TENURE: THE CONDOMINIUM.
THE MODERN CONDOMINIUM IS AN APARTMENT HOUSE WHOSE RESIDENTS ENJOY
EXCLUSIVE OWNERSHIP OF THEIR INDIVIDUAL APARTMENTS MUCH IN THE SAME
MANNER AS DOES THE OWNER OF A SINGLE FAMILY DWELLING. THE GOALS OF
CONDOMINIUM, A FORM WHICH IS SAID TO PRE-DATE CAESAR, HAVE REMAINED
CONSTANT: TO ENABLE PEOPLE IN APARTMENT HOUSES TO ACHIEVE THE ADVAN-
TAGES NOW AVAILABLE TO HOMEOWNERS. THE CONDOMINIUM ALSO ENCOURAGES
DEMOCRATIC PARTICIPATION IN PLANNING THE AFFAIRS OF THE COMMUNITY.
IT PROVIDES, AS DID OUR TOWN MEETINGS IN THE EARLY DAYS OF THE
REPUBLIC, THE FOUNDATION FOR BROADER PARTICIPATION IN THE COMMUNITY.
THE CONDOMINIUM -- WHICH IS A "HIGH-RISE HOME" -- IS NOT ENTIRELY
NFW AS A TOOL FOR LOW-INCOME ROMEOWNERSHIP. NOTABLE EXAMPLES OF
THE USE OF CONDOMINIUM EXIST IN BOSTON, CHICAGO, AND LOS ANGELES AND
OUR OTHER MAJOR CITIES. THE EXPERIENCE IN LOS ANGELES GOES FAR
TO SHOW HOW WE CAN BEGIN TO BREAK THE POVERTY CYCLE. THERE, PRIVATE
INDUSTRY, WITH ASSURED FINANCING, HAS INVOLVED THE CONSTRUCTION OF
SO-CALLED "TOWNHOUSE CONDOMINIUMS" IN A MODEL 10-UNIT PILOT PROJECT.
THE WORK AND SUCCESS OF MANY OF THESE PROJECTS SHOULD BE WIDELY
COPIED
WE DO NOT NEED GREATER VOLUMES OF NEW LEGISLATION;
WE NEED MORE
PRODUCTIVE USE OF THE LEGISLATION WE NOW HAVE. IT IS TIME
WE SOUGHT TO EXTRICATE OURSELVES FROM A LOW-INCOME HOUSING POLICY
WHICH CREATES AND MAINTAINS TENANTS, AND OVERLOOKS THE INTRINSIC
BENEFITS WHICH FLOW FROM INDIVIDUAL HOMEOWNERSHIP. AS A COMMUNITY
LEADER IN ONE NEIGHBORHOOD OF SUBSTANDARD HOUSING IN NEW YORK CITY
HAS STATED: "PEOPLE MUST HAVE INCENTIVE. THEY MUST HAVE PRIDE. AND
#ITHOUT THESE TWO THINGS, THERE IS NO REHABILITATION. I THINK THAT
THE GOAL SHOULD BE TO MAKE THESE PEOPLE PROPERTY OWNERS RATHER THAN
JUST TRANSIENT TENANTS MOVING AWAY EVERY FEW WEEKS." MY ANSWER TO
THAT NEED IS A CONCERTED EMPHASIS ON THE "HIGH-RISE HOME" WH. CH WILL
GO FAB TO PROVIDING THE SENSE OF PRIDE WHICH COMES FROM HOMEOWNER-
SHIP.
OVER 100 YEARS AGO, THE REPUBLICAN PARTY PIONEERED THE HOMESTEAD
LAWS. THIS LEGISLATION OPENED AMERICAN FRONTIERS, NOT ONLY
GEDGRAPHICALLY, BUT POLITICALLY AS WELL. PEOPLE MOVED WEST TO STAKE
OUT THEIR HOMESTEAD. THEY ACQUIRED PRIVATE PROPERTY IMPROVED
THE PROPERTY. THEY BUILT THEIR OWN COMMUNITIES--DEVELOPED THEIR 0%9
COMMITY FACILITIES, SCHOOLS, HOSPITALS--AND AS PRIVATE HOMED @NPRS,
PASY JOINED THE WAINSTREAM OF THE GREAT AMERICAN PRIVATE ECOGOMIC
SYSTEM I SAY THAT YEARS LATER-WA MUST DO THE SAMP 1.1
CPN DENS OF AMERICAN CITIES. WE MOST PROVICE "HOMESTEADS" FOR THONK
AMERICAN FAMILIES PRESENTLY LIVING IN DEPLORABLE SUBSTANDARD CONDI-
TIONS AND ALIENATED FROM SOCIETY.
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4
AS PRIVATE HOMEOWNERS WITH A STAKE IN THEIR COMMUNITY, A PIECE OF
THE ACTION AND A RESPONSIBLE VIEW TOWARD THE STATE OF THEIR COUNTRY,
THEY WILL REBUILD THE CITIES--IT WILL BE THEIR SPIRIT. AND THEIR
CONCERN, AS IT WAS WITH THE FRONTIERSMEN 100 YEARS AGO. THEY WILL
REESTABLISH THE PRIDE AND THE DIGNITY OF OUR NATION'S CITIES.
THOMAS JEFFERSON KNEW WHAT THIS SENSE OF PRIDE MEANS: "IT IS NOT
TOO SOON TO PROVIDE BY EVERY POSSIBLE MEANS THAT AS FEW AS POSSIBLE
SHALL BE WITHOUT A LITTLE PORTION OF LAND. THE SMALL LANDHOLDERS
ARE THE MOST PRECIOUS PART OF THE STATE.
THE CENTRAL PRINCIPLE OF A NEW FEDERAL HOUSING POLICY MUST BE TO
HELP PEOPLE RATHER THAN JUST CONSTRUCT BUILDINGS. THE CONDOMINIUM
IDEA EMBODIED IN "HIGH-RISE HOMES" CAN GO FAR TOWARD HELPING US
ACHIEVE THAT END.
END
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RN Y
JGT WASH
TO: ALAN GREENSPAN
FROM: CHUCK COLSON
RE: MY CONVERSATION WITH KHACHIGIAN ABOUT HOUSING STATEMENT.
KHACHIGIAN SAID THAT HE ELIMINATED ALL OF THE DETAILS ON
THE CONDOMINIUM PLAN BECAUSE HE THOUGHT THEY WERE TOO LONG AND
DETAILED, BUT SUGGESTED THAT IF I COULD WRAP IT UP IN ONE PARAGRAPH
AND ADD IT TO THE STATEMENT, I SHOULD DO SO. I THINK IT SHOULD BE
DONE IN ORDER TO GIVE THE STATEMENT A LITTLE MORE MEAT AND SOMETHING
NEW AND SUBSTANTIVE. ALSO IT IS IMPORTANT AS A WAY OF SHOWING
THAT RN HAS THOUGHT THROUGH SPECIFICALLY HOW THIS PARTICULAR
PROPOSAL MIGHT WORK. I SUGGEST THEREFORE THE FOLLOWING PARAGRAPH.
THIS PARAGRAPH SHOULD COME RIGHT AFTER THE CONDOMINIUM PARAGRAPHS
AND IMMEDIATELY BEFORE THE PARAGRAPH WITH BEGINS:
"WE DO NOT NEEL
GREATER VOLUMES OF NEW LEGISLATION
"TO THIS END, I WILL PROPOSE THE CREATION OF A LOW COST PRIVATE
HOMEOWNERSHIP INDEPENDENT GOVERNMENT CORPORATION TO WORK WITH
PRIVATE BUILDERS AND DEVELOPERS AND TO ENCOURAGE THE FLOW OF
PRIVATE CAPITAL. THE FUNCTION OF THIS CORPORATION WILL BE T)
PROVIDE AN INTEREST DIFFERENTIAL SO THAT PRIVATE LENDERS MAY LOAN
AT INTEREST RATES WHICH LOW INCOME FAMILIES CAN AFFORD AND T)
GUARANTEE THE FULL AMOUNT OF LONG TERM MORTGAGES FOR ELIGIBLE
PURCHASERS. UNDER THIS PLAN, THE PRINCIPAL REPAYMENT WOULD BE
SPREAD OVER 25 YEARS WITH MORTGAGE PAYMENTS SPREAD OVER A FULL
30 YEARS SO THAT IN THE LAST 5 YEARS OF THE LIFE OF THE MORTGAGE,
THE GOVERNMENT WOULD RECOVER A SUBSTANTIAL PORTION OF THE INTEREST
SUBSIDY AND GUARANTEE COSTS. SUCH A PLAN WOULD PROVIDE THE OPP-
ORTUNITY FOR HOMEOWNERSHIP TO HUNDREDS OF THOUSANDS OF FAMILIES
NOW UNABLE TO PURCHASE THEIR OWN HOMES; AND THIS COULD BE
ACCOMPLISHED AT MINIMUM COST TO THE FEDERAL TREASURY.
BEGINNING OF THE NEXT PARAGRAPH SHOULD START: THE SOLUTION
TO OUR PROBLEMS LIES NOT ALONE IN NEW LEGISLATION BUT IN THE MORE
PRODUCTIVE USE OF THE LEGISLATION VE NOW HAVE.
1101 THE WHILE. THE STATEMENT 15 A FIRST RATE JOB.
FND.P
May 29, 1968
CONGRESSIONAL RECORD HOUSE
4451
So at least it was with Louis Clifford who
Two weeks ago Louie received from doc-
streets. Such a situation is not civil lib-
from 1943 until his death Saturday at 61 was
tors the sad news that he had inoperable
erty.
city editor of The Press.
heart disease. On Dec. 13 he had lost his
As one who often expressed admiration for
brother Robert, also a Press veteran, to
All too often have we seen the rights
such a flamboyant performer as the old
heart disease, and the word about himself
of the criminal upheld and ringed with
Cleveland News, a man who boisterously
shook him up.
ironclad legal protections while the
scolded his staff, Louie was unfailing quiet
But he returned to work at the city desk,
rights of the upright, the honest, and
and considerate, even when pressures were
to make up his inind what to do. The alter-
the weak are trod upon with impunity.
most intense.
natives were varied. He could have retired
Therefore, I question the wisdom and the
Speaking in 1961 at the Indiana University
to a life of ease, which he said was not at-
propriety of statements of some Mem-
Press Institute seminar, Louie paid his re-
tractive. He could have taken a less de-
bers of this body, as reported in the
spects to Bergener in these words:
manding assignment.
"I was on the police and the criminal
"I'll take next week off and decide what
press, that the Omnibus Crime Control
courts beats most of my four years of ap-
I'm going to do," he told a close friend.
and Safe Streets Act of 1968 will be
prenticeship under Mr. Bergener. He was a
He died as he was starting that vacation.
killed or blocked unless certain provi-
cussing, shouting, reporter-insulting, hard-
sions are eliminated. If anyone ques-
boiled individual for whom despite his
tions those provisions, I can understand.
cussedness, I bore a tremendous amount of
OMNIBUS CRIME CONTROL AND
Indeed, if anyone fights for the elimina-
admiration and even a trace of affection."
SAFE STREETS ACT OF 1968
tion of those provisions, I can under-
It was not often that Louie revealed as
much as that about himself, SO it is worth
(Mrs. KELLY asked and was given
stand. But for anyone to arrogantly state
noting that he was almost the exact opposite
permission to extend her remarks at this
that the entire legislative package will
of his mentor. And after four years of such
point in the RECORD and to include ex-
be sacrificed is, to me, unacceptable.
driving, in spite of the nostalgia he expressed
traneous matter.)
I have stood in the well of the House
more than three decades later, he came to
Mrs. KELLY. Mr. Speaker, it is a dis-
on many occasions to support this bill
The Press for his career.
grace to our country that crime has be-
and other measures to provide a greater
Very few of today's editorial staff at The
Press have any recollection of Louie as a beat
come a national concern and is con-
degree of security to our citizens and the
reporter or rewrite man. Those who do say
stantly increasing. Public order should
means of providing such security. I be-
he performed in these fundamentals with
be the first business of government. Law
lieve that I speak for my constituents
great skill and discrimination. He covered
enforcement is essentially a local prob-
when I say that I do not want to see
both police and courts during the exciting
lem and must be dealt with locally. How-
all of our work go for naught.
lawlessness of prohibition.
ever, when lawlessness reaches into every
have studied the Senate amendments
When he talked at Indiana University, he
spoke highly of the competitive days when
section of the country, then it becomes
to the safe streets bill, I have listened
The Press and the old News were eyeball to
a national problem. Congress must heed
to many lawyers arguing the pros and
eyeball every edition every day. Such compe-
the cry of all our citizens by enacting an
cons of them and I have taken note of
tition, he said, sharpened the staff and its
effective anticrime program.
the fact that there are many distin-
product by the hour.
It is for this reason that I view as par-
guished members of the bar in the other
But he also said:
ticularly unfortunate the House's failure
body who supported those amendments.
"For the tremendous improvement in
to complete action today on the omnibus
However, I cannot support any frustra-
newspapers in the last 25 years I credit
crime control and safe streets bill. I am
tion of the will of this House on the
largely two factors: The planning, prepara-
tion and thinking ahead that go into the
glad that the unanimous-consent request
basis of one's own personal constitutional
daily edition output, and the wide broaden-
to send the bill to conference was re-
views. Such action by those who oppose
ing of the base of coverage."
jected by my colleagues, because it has
the Senate amendments are not in ac-
Louie had a great deal to do with the
been rumored in the press that such a
cord with the democratic process.
development of a more responsive and re-
move would have killed this much-
I wish to call to the attention of this
sponsible press. His contributions to modern
needed legislation. However, I had hoped
body some of the programs which would
journalism have been widely recognized.
the House would have agreed to an im-
Early in his city desk career he was a
be eliminated by a preemptory rejection
speaker at the American Press Institute
mediate discussion of the Senate amend-
of the bill, including, first, funds to State
at Columbia University on the training of
ments and final action before the Memo-
and local governments for a variety of
staff. He returned later to lead a three-
rial Day recess.
training, study, and other programs for
week seminar on municipal affairs.
An article in the New York Times of
the improvement and strengthening of
For all his intense interest in the affairs
today, May 29, 1968, reemphasized the
law enforcement at the local and State
of Cleveland, he made only infrequent and
immediate need for this legislation by
levels; second, Federal control of wire-
highly selective public appearances. But
relating that the increase of crime in
tapping: and third, firearms control.
quietly he accepted civic responsibility, de-
voting his own time and attention.
April in New York City alone was 27
I think it foolhardy for this body not
He was a member of the Euclid Charter
percent, as reported by the New York
to act merely because of the intransi-
Commission, which a few years back re-
City Police Department and the Federal
gence of those who oppose certain amend-
vamped and notably stabilized the govern-
Bureau of Investigation.
ments enacted by the other body. There-
ment of that city. He was a member for
The substance of the Omnibus Crime
fore, I urge the House Judiciary Com-
several years of the Euclid-Glenville Hos-
Control and Safe Streets Act of 1968
mittee to ponder anew the seriousness
pital Board, during its time of greatest
is long overdue. Although legislation is
expansion.
of the crime situation in this country and
Louie also was a sentimentalist. On a
not always perfect, this does not give
to expedite House debate and action on
vacation five years ago, Louie came upon
any one Congressman or any one com-
this bill. SO that the people of this coun-
Rev. Fr. Albert Schmidt in his poverty parish
mittee the right to delay or to sacrifice
try can be reassured that we are interest-
of 6000 hill people at Ponce, Puerto Rico.
legislation because of possible objec-
ed in their safety and security.
Louie wrote a fistful of stories, raising sub-
tionable features. Disregard of the will
stantial sums for the people.
of the people and of this body's previous
Born in Wabash, Ill., Louie lived most of
actions is, to me, unacceptable.
THE RELOCATION AND ASSISTANCE
his life in this community. In 1924 he gradu-
I have long been a devoted and active
ACT OF 1968
ated from Cathedral Latin High School and
entered immediately upon his newspaper
supporter of civil rights for all persons
(Mr. RYAN asked and was given per-
career. The family home is 22561 Edgecliff
all minorities, and all groups. Support
mission to extend his remarks at this
Dr. Euclid.
for civil rights has been and is my posi-
point in the RECORD and to include ex-
He was named 1965 Man of the Year by
tion. I think, however, that in our zeal to
traneous matter.)
Cathedral Latin Alumni Assn., receiving a
support individual rights, we have too
Mr. RYAN. Mr. Speaker, I have intro-
scroll that called attention to his devotion
frequently confused the right of the
duced H.R. 16953, the Relocation Assist-
to church, family and The Press.
criminal with the rights of the public.
ance Act of 1968, in order to assist thou-
His surviving family are his wife Pat and
It is axiomatic that two of the most
three children, Dr. John E., professor and
sands of Americans who are displaced
head of drama at Bradley University, Peoria,
basic rights of any citizen are his right
every year from their homes and places
Ill.; Mrs. Eugene (Donna) O'Donnell, Euclid,
to be secure in his home and to walk
of business as a result of construction
and Thomas S., a teacher of physics at the
the street in safety. When those rights
facilitated by Federal programs. These
Grosse Pointe, Mich., High School. There
are not enforced, innocent hard-working
programs include urban renewal and
are 8 grandchildren. A brother, Roland, also
citizens quail behind barred doors and
other housing programs, highway con-
survives.
only the denizens of the night stalk the
struction, university expansion, hospital
H 4452
CONGRESSIONAL RECORD
May 29, 1968
construction, Federal facilities such as
TIME FOR CONGRESS TO LOOK
this point in the RECORD and to include
post offices, and a host of other programs.
INTO THE CONTENTION OF
extraneous matter.)
Only under the urban renewal program
MAJOR LEAGUE BASEBALL OWN-
are Federal funds provided for reloca-
ERS THAT THEY OPERATE A
[Mr. OTTINGER'S remarks will ap-
tion payments. and these are rarely
SPORT AND NOT A BUSINESS
pear hereafter in the Extensions of Re-
marks.]
adequate.
In previous years I have introduced
(Mr. CABELL asked and was given
legislation to improve the relocation ben-
permission to extend his remarks at this
PRESIDENT JOHN FITZGERALD
efits under urban renewal standards and
point in the RECORD and to include ex-
KENNEDY SLIEVE COILETTE
to require that construction may not be-
traneous matter.)
(MOUNTAIN OF THE WOODS)
gin until adequate relocation has been
Mr. CABELL. Mr. Speaker, once again
DEDICATED TODAY BY PRESI-
provided-H.R. 1225, H.R. 1226, H.R.
the time has come for Congress to look
DENT EAMON DEVALERA OF IRE-
1227.
into the contention of major league base-
LAND AT KENNEDY ANCESTRAL
I have also introduced legislation to
ball owners that they operate a sport
HOME
IN
DUNGANSTOWN,
provide that recipients of loans or grants
and not a business. For it is becoming
COUNTY WEXFORD, ON 51ST
for construction under the Higher Edu-
all too evident that what was once our
BIRTHDAY OF LATE PRESIDENT
cation Facilities Act of 1963-H.R. 1248-
national game has now become the
monopolistic province of a few profit-
(Mr. BOLAND asked and was given
or for hospital construction under the
hungry, selfish men.
permission to extend his remarks at this
Public Health Service Act-H.R. 1246,
I am referring particularly to the
point in the RECORD and to include ex-
H.R. 1247-be required to satisfy the Fed-
eral Government that relocation bene-
Monday decision by National League
traneous matter.)
clubowners in which two additional
Mr. BOLAND. Mr. Speaker. I would
fits, similar to those available under the
Housing Act of 1949, be provided.
cities, San Diego in California and
like to call to the attention of my col-
Montreal in Canada, were added in the
leagues that at this moment on a beauti-
H.R. 16953 would establish a uniform
latest of several league expansion moves.
ful green hillside in County Wexford,
Federal relocation policy to be admin-
istered by a central Relocation Assistance
I have no prejudice against either of
Ireland, President Eamon DeValera is
Bureau, located in the Department of
the two cities, though it is interesting to
dedicating a national forest and arbore-
note that one of them, San Diego, is in an
tum in memory of a former Member of
Housing and Urban Development. The
area already supporting two other major
this House and the late President of the
basic standard of payment would be that
league clubs, while Montreal is not only
United States. President John Fitzgerald
which is now provided for persons and
business displayed by urban renewal ac-
outside the boundaries of this country
Kennedy, on the anniversary of his 51st
tion in section 114 of the Housing Act of
and has not supported professional base-
birthday, May 29, 1917.
1949, amended as follows: the ceiling on
ball of any sort in almost 8 years.
Mrs. Eunice Kennedy Shriver, sister of
compensated moving expenses would be
On the other hand, the Dallas-Fort
the late President and wife of U.S. Am-
removed; tenants would be paid the dif-
Worth area is the 12th largest radio-TV
bassador to France Sargent Shriver, and
market in the Nation and is a big league
Mrs. Joan Kennedy, wife of Senator ED-
ference between former rentals and the
area as shown by its support of the Dallas
WARD M. KENNEDY, of Massachusetts, are
rental in new comparable housing for
Cowboys in professional football, two
representing the Kennedy family and
I year; in the case of businesses, cer-
major golf tournaments, and many other
planting trees on the site during cere-
tain losses of profit and goodwill would
top sporting events. In the Texas League
monies dedicating the President John
be covered; businessmen who could not
Fitzgerald Kennedy Slieve Coilette-
find suitable relocation sites would be
today the Dallas-Fort Worth Spurs are
compensated for the fair market value
consistently among the leaders in at-
Mountain of the Woods-comprising 450
of their trade.
tendance records, though Dallas and
acres overlooking the Kennedy ancestral
Payments would be made directly to
Fort Worth would prefer to attend the
farmhouse in Dunganstown, County
big league contests they deserve.
Wexford.
the relocatees by the Bureau of Reloca-
tion Assistance.
In times past, baseball owners have
President DeValera and Prime Minis-
My bill also provides that no Federal
met all charges of monopoly by protest-
ter Jack Lynch were hosts at a reception
agency shall approve an application for
ing that they are operating a sport and
for Mrs. Shriver and Mrs. Kennedy in St.
not a business and that their prime
Patrick's Hall, Dublin Castle, last night,
loan or grant assistance, nor undertake
motive is to expand only into those areas
where they met with many of the Irish
direct construction without first identify-
ing persons to be relocated, informing
where fans would be given an oppor-
Government officials and members of the
them of their rights, and providing the
tunity to attend a sport they cannot
diplomatic corps who welcomed Presi-
easily see.
dent Kennedy on his sentimental visit to
Director of the Relocation Assistance Bu-
Under this ruling, the National
the land of his forebearers 5 years ago,
reau with information sufficient to per-
mit the computation of relocation bene-
League's decision does not hold water.
June 26-29, 1963.
fits. All Federal grants, direct loan and
Not only is a vast and untapped market
Mr. Speaker, it was my privilege to
in Dallas-Fort Worth still without major
accompany President Kennedy during his
direct construction programs are cov-
league baseball, but the adverse decision
visit to Ireland, and to the farmstead at
ered.
is to benefit only one man-Houston's
Dunganstown, from which his great-
H.R. 16953 charges the Director of Re-
Judge Roy Hoffheinz-who makes little
grandfather, Patrick Kennedy, had emi-
location Assistance with the responsibil-
effort to cover his fear that a club in
grated to the United States over a cen-
ity of keeping a current file on all Fed-
eral assistance and construction pro-
Dallas would cut into his badly needed
tury ago. The President's boyish enthu-
Astrodome revenue.
siasm and obvious enjoyment was infec-
grams and the need for relocation assis-
tance. It also requires that he take ac-
Baseball can exist only as it pleases a
tious and an official occasion became a
sports-loving public, not because it is a
happy Kennedy family reunion as Mrs.
tions to insure that individuals and busi-
producer of revenue for an overextended
Mary Kennedy Ryan and her family
nessmen displaced as a result of feder-
promoter.
served tea on tables covered with linen
ally aided activities be fully informed of
their rights and given assistance in re-
I do not believe it is the intention of
cloths in the concrete farmyard between
Congress to promote or to protect such
the whitewashed cabin, which was Pat-
locating. He is further required to coor-
individuals and I feel it high time for
rick Kennedy's home before his depar-
dinate his activities with other Federal
this Government to break up its partner-
ture in 1848 to East Boston, and the
agencies.
ship with them.
newer grey-painted farmhouse.
This bill will finally provide a uniform,
consistent Federal relocation policy, re-
These recent actions raise anew the
The former Irish Prime Minister, Sean
gardless of the program. It will insure
question of monopolistic practices among
F. Lemass, who welcomed President Ken-
that federally aided construction and
big league owners and I shall ask the
nedy to Ireland in June 1963, and was
acquisition will proceed with a minimum
House Judiciary Committee to reopen
the President's guest at the White House
its studies of this question. It is long
in October 1963, said of President Ken-
of injury and dislocation to citizens.
overdue.
nedy after the tragic assassination:
I urge that hearings be held by the
Naturally John Kennedy's Irish-American
Committee on Banking and Currency, so
background quickened our interest in his
that we may act on this important legis-
(Mr. OTTINGER asked and was given
career and leadership. The rise to the august
lation as soon as possible.
permission to extend his remarks at
position of President of the United States of
The following statement was approved by the Republican Coordinating
Committee meeting in Washington, D. C., December 11, 1967
A PLAN FOR URBAN HOME OWNERSHIP
In America today, there is no challenge more vital, and more difficult than
meeting the problems of our cities and their residents. We believe that any
strategy designed to solve these problems must include, as key elements, programs
to help realize the goal of "a decent home and suitable living environment for
every American" -- the national goal enunciated by Congress in the landmark Housing
Act of 1949. Republican leadership in the development and passage of this and
numerous other important housing measures reflects our belief in the fundamental
importance of housing to the well-being of our urban residents.
This year a Republican plan for home ownership has been sponsored by Senator
Charles H. Percy of Illinois and Congressman William B. Widnall of New Jersey,
with wide endorsement of Republicans in both Houses of Congress. The purpose of
this program is to upgrade the quality of the nation's housing, to make home owner-
ship available to lower-income families who have or can develop the capacity to
accept this responsibility, and to provide needed technical assistance to local
community organizations.
The central element of the plan is the establishment of a private non-profit
National Home Ownership Foundation which would raise funds through the sale of
Federally guaranteed bonds to private lenders. The Foundation would have two
major functions:
* It would provide mortgage funds to non-profit, community organizations
equipped to undertake a program of rehabilitation or construction of single or
multiple family housing units, to be sold in turn to individual lower-income
families. In this way, private mortgage financing, private organizations, and
local initiative would be mobilized to make home ownership a reality to many for
whom the means are unavailable today. Federal funds would be used only to provide
a partial interest subsidy to the homeowner, which would be repaid if later his
income increases. For each million dollars of continuing Federal interest subsidy,
private home purchases of approximately $33 million could be supported.
* It would provide, when necessary, technical assistance to the community
organizations to enable them to undertake and manage a sound home ownership
program. In addition, it would offer to help these organizations participate in
or develop programs such as basic education, job training, credit counseling and
other support skills for the prospective home buyer. In helping to supply these
tools of successful home ownership, at the same time, the Foundation could provide
the service of aiding local organizations and individuals to find their way through
the present maze of government agencies and aid programs.
Another feature of the plan would provide for the establishment of a system
of mortgage payment insurance through private companies, if possible, to protect
home buyers from foreclosures due to temporary interruption of income for causes
beyond their control. Also, should the owner decide to sell his property, any
capital gain would be his profit, after repaying the Foundation for the interest
support he has received. This should encourage home improvements and proper
maintenance.
(over)
-2-
This new plan of action is a most imaginative and constructive approach to
improving the quality of our housing and the lives of lower-income families.
Under this plan the enormous resources, imagination, and strength of private
organizations would be brought to bear against the problems of housing, particu-
larly in urban areas. The operations of the Foundation and community organizations
would encourage involvement of business, labor, the professions, universities,
churches, civic groups, and other non-profit organizations, whose talents and
energies for assisting in the solution of public problems have not been adequately
tapped.
Government activity would be limited to risk bearing through a Federal
guarantee of the National Home Ownership Foundation's bonds, and limited financial
assistance for the interest subsidy. The emphasis of government would be on these
supporting functions and away from direct operations and control.
Also, the residents of our blighted city areas would be encouraged to involve
themselves actively in self-help programs leading to better housing, improved
skills, and economic advancement. Too often, present programs have failed to
generate a sense of self-reliance and self-help which will permit a man to advance
through his own efforts.
Congressional hearings have evidenced a broadly based enthusiasm for this
home ownership measure among community organizations and private enterprise groups
who would be directly involved. We urge the Department of Housing and Urban
Development to withdraw its opposition; for increased home ownership deserves
bipartisan support and early action from Congress on a broadly acceptable measure.
This home ownership plan typifies the innovative and imaginative approach of
Republicans to problems of housing and the urban environment, and demonstrates
the Republican Party's commitment to finding new solutions to the growing problems
of our lower-income urban citizens. The States and cities can also demonstrate
their initiative in this field. For example, the State of Pennsylvania has created
a housing agency to promote home ownership and rehabilitation to benefit the
underprivileged.
These proposals are testimony to our belief that individual dignity,
self-help and the involvement of private organizations are indispensable
principles in shaping solutions to the complex problems facing urban America.
12/11/67
S 6386
CONGRESSIONAL RECORD
Housing May 24, 1968
vantage, or risk the danger of being trampled
The PRESIDING OFFICER. Is there
before us today. One might say, then,
under the surge of unthinking feet-excited
objection to the present consideration of
that the committee has now spent some 8
forward by careless power manipulators, peo-
the bill?
months in bringing S. 3497 to the Senate.
ple whom I call 'militants of the absurb.'
The 47-year-old Negro leader said he was
There being no objection, the Senate
Mr. President, with the enactment of
going to "talk openly about the main sub-
proceeded to consider the bill.
the National Housing Act of 1934, the
ject of private conservations since the trou-
Mr. SPARKMAN. Mr. President, before
United States Housing Act of 1937, the
ble in D.C. I refuse to be 'chicken' and keep
we commence the debate on the Housing
Housing Acts of 1949, of 1954, of 1961,
my thoughts in secret half-whispered dis-
and Urban Development Act of 1968, S.
the Housing and Urban Development
cussions.
3497, I wish to make a brief comment.
"Let me tell it like it is. During the past
Act of 1965, and the Demonstra-
As chairman of the Banking and Cur-
winter a young brown-skinned man (an ob-
tion Cities and Metropolitan Develop-
vious reference to militant Stokeley Car-
rency Committee and also the Subcom-
ment Act of 1966, plus other measures,
michael), after a hate America trip around
mittee on Housing and Urban Affairs, I
the Congress has provided many tools
the world, came to live in Washington,
wish to express my appreciation to the
with which the American people have
D.C. and in only a short time has really
members of the committee as well as to
been able to obtain decent, safe, and ade-
shown us oldsters how to take over a city.
the members of the subcommittee for
quate housing. These acts have also pro-
"He 'jived' many black leaders of many
their cooperation and help in bringing
vided ways and means by which our
responsible Negro organizations in this town,
S. 3497 to the floor of the Senate. In this
even some of the sweet old ladies at church.
cities, towns, and communities have been
connection, Mr. President, I express my
"He's sympathized with our D.C. leaders'
able and are now able to fight blight,
frustrations, he inflamed their resentments—
gratitude to the members of the commit-
slums, and urban decay.
but more importantly, he played up to their
tee and the subcommittee for the won-
It must be remembered, however, that
egos. Then all were invited to a secret meet-
derful cooperation they gave throughout
these acts taken as a whole, were never
ing. And publicly our leaders nodded agree-
the weeks-literally, throughout the
intended to be the complete answer-the
ment to his plan to join forces and con-
months-in considering this bill. I also
sented to take titles of offices and to serve
sole solution-to our national housing
wish to express my appreciation and that
on black only committees."
problems nor to the multiplicity of prob-
of the members of both the committee
Dr. Alexander asked where the militant
lems we now find facing our cities. At
and subcommittee to the staffs of the full
leaders were "when the time came."
best, these acts were intended to encour-
"None to my knowledge were seen doing
committee and the subcommittee, as well
age and contribute to private enterprise
the violent acts that they had earlier urged
as to the Senate legislative counsel's
and public efforts and initiative toward
on their poor black brothers."
office; namely, Mr. John Reynolds-for
helping our people to achieve the goal
The D.C. disturbance was a criminal action
the vast amount of work they did in the
and not a riot, Dr. Alexander said, because
expressed in the policy of the Housing
preparation of S. 3497 as well as in the
"the few percentage of blacks who took part
Act of 1949, which is "a decent home and
preparation of Senate Report No. 1123 to
put their sights more on what they saw in
suitable living environment for every
accompany the bill.
store windows than on what Dr. Martin L.
American family."
King Jr. taught, lived and died for."
I believe I can truthfully say that S.
Mr. President (Mr. GORE in the chair)
Challenging the argument that only vio-
3497 is the most comprehensive housing
I shall digress long enough to say that
lence seems to frighten the power structure
and urban development bill our commit-
that housing policy was written into the
into turning more attention to the poor, Dr.
tee has ever presented to the Senate. The
Alexander said:
act of 1949. At the time it was known as
bill has 15 titles, with numerous sections
"This city or nation cannot allow the poor
the Taft-Ellender-Wagner Act. It was
and subsections, which, on the one hand,
to believe that it is necessary to burn a slum
under the guidance and leadership of
establish several new housing and urban
house, the corner grocery store or clothing
those three distinguished pioneers in the
store to make Congress and the American
development programs and, on the other
field of adequate housing that the goal
public aware that existing hunger in rat and
hand, contain provisions amending the
I have just quoted was established-
roach-infested quarters is hell."
majority of housing and urban develop-
that there should be the opportunity to
Dr. Alexander spoke out against a racial
ment laws on the statute books today.
aspire to and hope for "a decent home
split-"the only blacks that I know of who
Mr. President, S. 3497 is not a bill
and suitable living environment for every
really want segregation are those who can't
which the committee "dreamed up" over-
cut the mustard in an integrated society"-
American family." Of course, Senator
night. Quite to the contrary, S. 3497 rep-
but he urged that Negro men pool their
Taft and Senator Wagner are no longer
money to own stores, banks, hotels.
resents a two-session effort on the part
with us, but the distinguished Senator
of the committee. Senators will recall
"We have been dallying with the white
from Louisiana [Mr. ELLENDER], who was
man for years, but we can't fool him any
that, after some 4½ months of delibera-
the other member of that famous trio, is
more because he has woke up and gone and
tion during the first session of the 90th
still one of our most active Senators and
given us our civil rights. Now we must seek
Congress, the committee reported on No-
one of our most active supporters of safe,
justice-not generosity, not benevolence, not
vember 28, 1967, the proposed Housing
sanitary, and decent housing.
pity, not sympathy or handouts."
and Urban Development Act 02 1967-
Under these acts, a great deal has been
that is, S. 2700. Congress, however, ad-
achieved. Literally millions of families
journed before S. 2700 could be consid-
CONCLUSION OF MORNING
have been able to obtain decent places in
ered. As a matter of fact, S. 2700 is still
BUSINESS
which to live commensurate with their
pending on the Senate Calendar, al-
needs and at prices they are able to pay.
Mr. MANSFIELD. Mr. President, is
though it has now been outdated by S.
In fact, the FHA and VA housing pro-
there further morning business?
3497, the bill which we commence to de-
grams alone have aided some 17 million
The PRESIDING OFFICER. Is there
bate today.
families to obtain decent housing. Sev-
further morning business? If not, morn-
Rather than proceeding to consider
eral thousand cities, towns and commu-
ing business is concluded
S. 2700 early in the second session of the
nities have been helped to rid themselves
Congress, the decision was made that we
of their worst slums and blight and have
HOUSING AND URBAN DEVELOP
should hold that bill in abeyance until
thus become better places in which to
MENT ACT OF 1968
the administration submitted its pro-
work, play, worship, and live. One of the
posals for 1968 housing and urban de-
most notable achievements has been the
Mr. MANSFIELD Mr President, I ask
velopment legislation.
development of a mortgage insurance
unanimous consent that the Senate pro-
On February 26, 1968, the President
system with a Government guarantee and
ceed to the consideration of the un-
submitted to the Congress a message on
a backup secondary mortgage market fa-
finished business.
housing and cities. Accompanying the
cility, the results of which have largely
The PRESIDING OFFICER. The bill
message were the administration's legis-
been responsible for the rising homeown-
will be stated by title for the information
lative proposals designed to implement
ership among the American people so
of the Senate.
the President's message.
that today more than two-thirds own
The ASSISTANT LEGISLATIVE CLERK. A
The administration's proposed Hous-
their own homes.
bill (S. 3497) to assist in the provision of
ing and Urban Development Act of 1968
However, from time to time serious
housing for low- and moderate-income
contained a majority of the basic ideas
gaps have been noted in these acts. As
families, and to extend and amend laws
that were included in S. 2700. Therefore,
time went on, it was realized that many
relating to housing and urban develop-
the committee used S. 2700 as the basis
programs provided by these measures
ment.
for drafting the committee bill we have
have not reached down far enough to
May 24, 1968
CONGRESSIONAL RECORD
S6387
help those who need housing the most.
TITLE I-LOWER INCOME HOUSING
respectively, for a family with five or
Also, urban døvelopment programs were
One of the most important titles to
more persons.
sometimes found lacking in the type of
this bill is title I which contains im-
Authority to enter into assistance pay-
Federal support and assistance that was
portant new provisions to help lower
ments contracts as approved in appropri-
needed at the local level to meet the fast
income families become homeowners.
ation acts is limited to $75 million for fis-
changing housing and urban develop-
There are nine sections to this title, the
cal year 1969, $100 million for fiscal year
ment problems of the cities. Each time
provisions of which are varied but all
1970 and $125 million for fiscal year 1971.
these gaps have been found or recog-
are aimed at meeting a real need in our
This authority could result in contracts
nized, steps have been taken to close
economy, that is, making it possible for
for assistance payments for a total of
them with either new or amended legis-
lower income families to obtain decent
nearly 500,000 units during the 3-year
lation.
housing through homeownership. This
period.
Let me make it clear, however, that
matter was first considered last year and
Other sections of this title also repre-
while much success has been achieved
finally, after numerous conferences and
sent significant proposals to make it
over the last 35 years, this Nation still
consultations, the committee has brought
easier for the lower income families to
has a long way to go in meeting total
forth a package of legislative provisions
become homeowners. One of the provi-
housing and urban development needs.
which we confidently believe, once they
sions would authorize the FHA to qualify
In the first place, our previous efforts
are implemented, will represent another
for assistance a lower income family
have never been fully effective relative to
milestone in Federal assistance toward
who, under existing law, would be turned
the needs of the lower income people and,
helping lower income families of this
down because of marginal credit ex-
secondly, changing economic and social
Nation.
perience or irregular income patterns but
conditions have aggravated and worsened
Under existing law, the FHA and VA
who, it is found, is a satisfactory credit
the urban housing problem so that, de-
programs are very effective in helping
risk and would be capable of homeowner-
spite existing programs, many inner city
families of moderate income obtain de-
ship with proper counseling.
areas have deteriorated at a faster rate
cent housing through homeownership.
This title also contains a provision
than ever before.
In fact, over the years, the laws have
to authorize FHA to insure mortgages
The housing needs of the American
been gradually liberalized SO that today
for families in the rundown neighbor-
people and the needs of the Nation's
we can proudly say that we are truly a
hoods of our cities without regard to
cities, towns, and communities are not
nation of homeowners, largely because of
economic soundness requirements and
something that can be defined, once and
the contribution made by FHA and VA.
other limiting restrictions having in
for all time, at any given period. These
However, as construction costs have
mind the need for adequate housing for
are ever-increasing needs of the low-
gone up and interest rates have risen to
families in these areas. This would meet
and moderate-income American family
unprecedented heights, it has become
the criticism often levied at FHA on red-
which must be faced almost on a day-
more and more difficult for families of
by-day basis. What appeared to be a
lining areas and its refusing insurance
low and moderate income to afford to buy
satisfactory solution to yesterday's prob-
a home of their own.
only because of the area.
lem will be unacceptable today. On the
Section 101 of this title is intended to
A special risk fund would be estab-
reverse side of the coin, it must be
remedy this difficulty. Under this section,
lished, not necessarily actuarially sound,
realized by all concerned that these are
the Federal Government would help re-
which would be used to meet probable
needs that cannot be met on an over-
duce the housing load on the family by
higher losses in the more risky insurance
night basis; fiscal and physical capabil-
paying all but 1 percent of the interest
cases that the Congress would be au-
ities are just not at hand to bring about
charges to finance the mortgage loan. To
thorizing FHA to undertake.
an immediate solution to all these prob-
make it fair for all, only lower income
Mr. President, I believe that it is about
lems.
families would be eligible and each fam-
time the Congress realizes the dilemma
Mr. President, the President's housing
ily would pay 20 percent of its income for
it has placed the FHA in under existing
and cities message proposed a far-reach-
housing costs. Lower income families are
law. On the one hand, FHA is required
ing goal to meet a massive national
defined as those whose incomes do not
to run an actuarially sound operation
need-a program of Federal assistance
exceed 70 percent of the income ceilings
with a minimum of losses while, on the
for the construction and rehabilitation
established by the Secretary for a par-
other hand, it gets criticized because it
of 6 million housing units over a 10-year
ticular area in administering the FHA
shies away from the marginal risk cases
period for the low- and moderate-income
below market interest rate program un-
and from neighborhoods where private
families of this country. Such a program
der section 221(d) (3). This income ceil-
enterprise has indicated as "off limits."
would replace the substandard units in
ing would vary from area to area but, in
Our committee has taken a firm stand
which it is estimated more than 20 mil-
general, it would be at the level of about
on this, both in the pending legislation
lion Americans still live.
the lowest one-third of families on the
and in the committee's report. We be-
The President's 1968 proposals for
income scale in any particular area. In
lieve that FHA was established to take
housing legislation called for an initial
my home city of Huntsville, Ala., the in-
risks and to bear the burden of helping
5-year program aimed at achieving the
come ceiling for families of five and six
to provide decent housing for all but
10-year goal of the message. The com-
persons would be $4,900 per year. To per-
the poorest of our people no matter
mittee certainly agrees that the Presi-
mit flexibility and to make the program
where they live in. We believe that each
dent's 10-year goals are very admirable
more workable, some few families with
case should be examined on its merits
and are necessary and the committee
incomes above this could qualify also but,
and, if it qualifies as a satisfactory risk,
believes that these goals can be attained.
in no instance, could more than 20 per-
the FHA should accept it. The Congress,
In order to do this, the committee is
cent of the contracted funds be used for
by these provisions of the bill, will be
recommending stepped-up activity under
families above this basic ceiling.
committing itself to stand back of FHA
existing programs, as well as proposing
The committee also recommended an
and help it truly perform the task it was
new programs to fill the gaps apparent
allowance of $300 per minor child be
created to do-that of providing the fi-
under existing programs. These programs
made in determining eligibility under the
nancial backup needed to help lower
would be funded at levels to get a good
income ceilings and in determining the
income families obtain decent housing.
start toward the 10-year goal. However,
minimum payment the family should pay
This title contains provisions for as-
the committee did not agree with the
on its own before Federal subsidy. Con-
sistance to nonprofit sponsors SO that
administration's proposed 5-year pro-
sidering the cost of raising a family these
such sponsors can be effective in help-
gram. It believes that another look
days, this is nothing more than an effort
ing lower income families obtain decent
should be taken at the progress of the
to be fair and equitable for families with
housing. Also a Commission would be
new programs and current conditions
children.
established by this title to study and re-
after several years of experience and
Another feature of the interest sub-
port back to Congress on better ways and
that a 3-year period would be more
sidy provision for homeownership is the
means to help house our lower income
appropriate.
limitation on the maximum mortgage
families. And, finally, the title contains
I would like now to describe in very
amount. In general, it would be limited
authority to establish a National Home
general terms the major highlights and
to $15,000 but, in high cost areas, it could
Ownership Foundation which would pro-
proposals contained in the committee
go to $17,500. These ceiling amounts
vide technical and limited financial as-
bill.
could be raised to $17,500 and $20,000,
sistance to private and public organiza-
S6388
CONGRESSIONAL RECORD SENATE
May 24, 1968
tions desiring lower income families be-
TITLE III-FEDERAL HOUSING ADMINISTRATION
plicated matter, and, sooner or later,
come decently housed.
INSURANCE OPERATIONS
when local planning agencies get started
TITLE II-RENTAL HOUSING FOR LOWER INCOME
This title contains 19 sections amend-
in the demolition process and finally re-
FAMILIES
ing existing law to improve and make
move the buildings, there is a vast
Title II, Mr. President, deals with
more effective existing FHA insurance
area with nothing on it, and before it
rental housing for lower income families.
programs. I said at the beginning that
can be redeveloped, many years may
Let me say that section 201 of the title
the committee bill consisted of several
have passed. The provision we have in-
contains provisions similar to those
titles, and many provisions amending
cluded in the committee bill would per-
which I described in title I for home
existing law. That accounts in large part
mit pursuing urban renewal undertak-
ownership. In other words, what we are
for the great volume of the bill we have
ings by smaller areas which could be
trying to do is to provide twin programs;
reported. We are amending, by and large,
designated as neighborhood develop-
namely, one for homeownership and one
existing legislation. Title III is one of the
ment programs. These smaller areas are
for rental opportunity for families of
titles containing many amendments to
a part of the whole which has been
lower incomes, by having the houses
existing law.
planned but permits such areas to be
built by private enterprise with a sub-
Perhaps the most significant action of
pursued with work and development in
sidy going where necessary and to the
the committee relative to this title is its
a limited way rather than taking the
extent necessary in order to make it pos-
report language outlining FHA's re-
whole.
sible for the lower income families either
sponsibility in providing housing for all
That, Mr. President, I may add, the
to buy a home or to rent a unit.
eligible families of this Nation regardless
neighborhood development programs
would be undertaken on an annual
This title is a companion title to title
of the location of the property; also in
I, but for rental housing rather than
helping to meet the need for better
basis. Let me cite an example right here
homeownership. Section 201 of this title
financing provisions in the rehabilitation
in Washington-familiar to all of us in
compares almost directly with section
of existing housing in connection with
days not SO long past-when one of the
urban renewal.
worst slums in the world was right in
101 in providing interest subsidy assist-
ance to lower income families in rental
TITLE IV-GUARANTEES FOR FINANCING NEW
the shadow of the Capitol dome.
COMMUNITY LAND DEVELOPMENT
I referred, of course, to the Southwest
projects. However, the renter would pay
Washington area. I have been down
25 percent of his income for housing
This title would establish a new Gov-
costs before receiving a subsidy. It is be-
there. I remember being in a little alley
ernment bond insurance system to help
lieved that the 20 percent for a home-
and looking up, and there was the great,
finance the acquisition and development
magnificent Capitol dome. It seemed
owner would be equivalent to 25 percent
of new communities. Under existing law,
for a renter because the homeowner has
the most ironic thing in the world that
FHA is authorized to insure mortgage
other costs which the renter does not
right in the shadow of the dome of the
loans used for this purpose. This au-
have, such as heat and maintenance. The
Capitol of the mightiest nation in the
thority was given in its present form in
world we had slums that were absolutely
authorization for assistance payments
1966 but no mortgage has yet been in-
incredible.
would be he same under this section as
sured under it. The bond financing de-
under the section 101 homeownership
Finally, the slum clearance program
vice would be a much superior method
under old title I of the Act of 1949 was
provision. It has been estimated that ap-
and should produce the financing at
set up. I guess the urban renewal pro-
proximately 700,000 units would be con-
reasonable terms and with considerable
gram in Southwest Washington was one
traced for under the moneys authorized
flexibility to attract large private inves-
of the earliest in the country. As I re-
to be appropriated for this program-
tors into this worthwhile endeavor.
member, the total area covered was 555
$75 million for fiscal year 1969, $100 mil-
TITLE V-URBAN RENEWAL
acres. It took several years to get the
lion for fiscal year 1970, and $125 million
for fiscal year 1971. These units would be
The most significant provision under
buildings torn down. In fact, it seemed
this title is section 501 establishing a
like it was going to be forever before any
both new construction and rehabilitated
new neighborhood development program
new buildings would be constructed in
housing units.
as part of urban renewal. Under this
the area. Finally the buildings were
Title II also includes authorizations to
program, an annual grant would be made
started.
extend the public housing and rent sup-
to a city to carry out small area redevel-
I remember saying to the director of
plement programs through fiscal year
opment with the intent of speeding up
our program, "When are we going to see
1971. These programs are of benefit to
the urban renewal process and showing
some brick-and-mortar activity in the
the poorest families of our Nation whose
visible accomplishments in short periods
area?" There was always the same reply,
incomes are so low that the new rent
of time. This would replace much of the
and it was logical: "We have got to wait
subsidy program explained above would
existing program whereby large areas
until we get the redevelopment plan and
be of little help. Under both the public
are redeveloped over a 5- to 10-year pe-
are ready to go." As we all know it took
housing and rent supplement programs,
riod with no visible results until the end
years. Frankly, I do not know how many
the tenants pay a certain portion of their
of a long planning and redevelopment
years passed before redevelopment was
income for rent-the public housing per-
process.
started. But today, to look at it, one would
centages determined locally and gen-
Another section of this title would
never dream that it was the area it was
erally vary from 16 percent to 20 per-
initiate a new system of applying Fed-
several years ago. There are magnificent
cent with allowance for children; the
eral funds for interim assistance to an
buildings there now-new homes and
rent supplement percentage, as set by
area scheduled for urban renewal or code
new rental units replacing that old slum.
Federal law, is 25 percent. Under each
enforcement in the near future. By this
As a matter of fact, it is not fully de-
of these programs, the Federal subsidy
device, much needed obvious work can
veloped yet. I am not saying we should
will make up the difference between what
be done well in advance of the slow-
have put the program into effect in 1949,
the tenant pays and the economic rent.
moving urban renewal process.
because we were not ready for it, but
However, the new rental program au-
The committee also included provi-
now we have had the experience to profit
thorized by section 201 of this bill pro-
sions in this title to insure that a ma-
from. Under the provision of the com-
vides only limited subsidy-the differ-
jority of housing units built in urban
mittee bill we could take the same tract
ence between in amortization charges on
renewal areas are made available to low-
and redevelop it in increments on an
a 63/4-percent mortgage and a 1-percent
and moderate-income families; it also
annual basis. This year we would rede-
mortgage. Thus, it can reach and be of
increased the rehabilitation grant ceil-
velop a part of it. Next year we would
help to a more narrow segment of lower
ing from $1,500 to $2,500 to help lower
redevelop more and SO on down the line.
income families. Generally speaking,
income families hold on to their homes
We would make it progressive rather
families below $3,000 annual income
and make the improvements needed to
than try to take the entire area all at
would need rent supplement or public
meet the rehabilitation standards.
one time.
housing assistance and thus the com-
Mr. President, one of the great objec-
TITLE VI-URBAN PLANNING FACILITIES
mittee believed it must be essential that
tions SO far to urban renewal has been
The most important section in this
adequate authority be made available to
that the undertaking requires such a
title is section 601, which would rewrite
keep these programs operating at a good
long period of time to complete. This is
the 701 urban planning provision and
level.
true because urban renewal is a com-
amend it to cover rural districts. This
May 24, 1968
CONGRESSIONAL RECORD SENATE
S 6389
would be a most significant step in our
National Mortgage Association, and the
TITLE XI-NATIONAL INSURANCE DEVELOPMENT
Government's efforts to stabilize and,
retention of the other functions of
CORPORATION
in fact, reinvigorate the life and econ-
FNMA into a new Government National
This title would establish the National
omy of rural districts, from which there
Mortgage Association-GNMA. This par-
Insurance Development Corporation in
has recently been such a high migration
tition would take place gradually, but not
the Department of HUD. The NIDC
into our crowded cities.
earlier than May 1, 1970, nor later than
would provide reinsurance to insurance
Section 607 of this title would also
May 1, 1973. The Government-owned
companies for losses paid by them result-
encourage rural district development by
preferred stock would be paid off
ing from riots or civil disorders. By pro-
providing for Federal incentive grants
promptly by FNMA issuing subordinated
viding this reinsurance, NIDC will en-
to such districts similar to those grants
obligations. Once the preferred stock is
able the insurance industry to continue
now available to metropolitan areas
paid off and the interim board of direc-
to provide the necessary property insur-
around our large cities.
tors is appointed, the FNMA Corporation
ance it is now providing to property own-
I want to throw this thought in right
would no longer be considered a Govern-
ers in urban areas. Reinsurance losses
here, because I think it is something
ment corporation and, thus, its financing
would be shared among the insurance
most people overlook. When we talk
operation would be excluded from the
companies-through a loss retention and
about the slums and the rundown, de-
regular Government budget. FNMA
reinsurance premiums paid to NIDC-
teriorated, unfit houses in city areas, we
would continue to have Federal backup
the States, and NIDC.
:lose sight of the fact that the worst
support to the extent of $2 billion bor-
The NIDC would also encourage the
slums are in rural areas. There are more
rowing authority from the Treasury.
private property insurance industry, in
poor people living in the rural areas
GNMA would continue its special as-
cooperation with State insurance author-
than in all the big cities combined. Over
sistance and management and liquida-
ities, to develop statewide plans to assure
half of the poor people of this country
tion functions, would continue to issue
all property owners fair access to prop-
live in rural areas. We are proposing in
participation certificates secured by
erty insurance. These would be known
this bill provisions so that an attack
mortgages, and would be given new au-
as "Fair Access to Insurance Require-
may be made on conditions in rural
thority to guarantee mortgage-backed
ments plans"-FAIR plans. Minimum
areas, where there is a great demand
securities issued by the new FNMA and
criteria would be provided in the bill for
for housing.
other private-approved issuers. The se-
the FAIR plans. Although minimum cri-
We need not be afraid of building
curity would be limited to FHA and VA
teria would be established, the State in-
houses in rural areas. We have had ex-
mortgages.
surance authority would have the respon-
perience. In fact, in the act of 1949, 19
By making the FNMA private, it is
sibility of determining the scope of the
years ago, I offered an amendment and
hoped to give it more strength and flex-
plans beyond the established minimum,
it was adopted. It became title V of the
ibility to carry out its charter responsi-
working out the details of the operation
1949 Housing Act. It was a simple pro-
bilities, but, to safeguard it from failing
of the plan, implementing the plan, and
vision. The provision authorized loans
to perform in the best public interest,
overseeing its operation. An insurance
to be made to rural families and persons
the Federal Government would continue
company obtaining reinsurance from
who needed housing. Under title V of the
to have a strong hand in the control of
NIDC would have to agree to participate
1949 act hundreds of millions of dollars
its management through the makeup of
in the State plan.
have been loaned to rural families for
the Board and its charter provisions.
NIDC and the State insurance author-
housing.
TITLE IX-NATIONAL HOUSING PARTNERSHIP
ity would maintain surveillance over the
I am sure the present Presiding Officer
This title would authorize the creation
effectiveness of the FAIR plans in in-
[Mr. GORE in the chair], who is a farm
of federally chartered, privately funded
creasing insurance availability. If it is
boy like I am, can do as I do. When we
corporations to mobilize private invest-
determined that the FAIR plan is not
ride around the country we can pick out,
ment and the application of business
obtaining the desired results, additional
as we ride along, the housing that has
skills in the job of creating low- and
programs may be required as a condition
been built under the title V program.
moderate-income housing in large vol-
to continued NIDC reinsurance in the
This housing is one of the most cheering
ume. It would work like this: A federally
State.
sights one can see. The program has a
chartered corporation would be organized
TITLE XII-NATIONAL FLOOD INSURANCE ACT
remarkable record of being financially
with expert staff proficient in the devel-
OF 1968
sound. An enviable record has been
opment and financing of housing proj-
The Secretary of Housing and Urban
achieved. In fact, that is true in the
ects. This corporation would get capital
Development will establish a program of
housing field in general. I think all hous-
by forming a partnership with investors
flood insurance, as a joint venture be-
ing programs must have exceeded any
who, in return for favorable tax depreci-
tween the Federal Government and the
expectations that those who pioneered
ation allowances, would be attracted to
private incurance industry. The bill per-
many years ago could have dreamed of.
invest substantial sums of equity capi-
mits as an alternative, but only if neces-
TITLE VII-URBAN MASS TRANSPORTATION
tal. With the equity capital thus avail-
sary, an all Federal program with or
The most significant provision in this
able, the partnership could join with lo-
cal partners to build housing with 90
without participation by companies,
title is section 704, which would authorize
percent of the cost financed with FHA
agents, or brokers as fiscal agents.
that 50 percent of the local share of the
assistance and 10 percent equity. With
The facilities of the private insurance
net project cost for mass transit projects
industry would be fully utilized in carry-
could be made by the public or private
favorable refinancing terms, such as pro-
transit systems rather than the local
vided under the new section 236 of the
ing out the program. Private insurance
government. Also, in exceptional cases
1968 Act, the operation can be most at-
companies could either assume a portion
where the local government is fiscally
tractive to investors in the upper income
of the risk in carrying out the program
unable to make the payment, the full
brackets. Depreciation allowances are
or could participate on a nonrisk basis.
amount of the local share may be paid
not new to housing investors, SO that all
Risk sharing companies would commit
by the local transit company. In making
of this can be accomplished without
risk capital to an industry pool of com-
this payment, the funds could only come
amendments to existing internal re-
venue laws. This provision was recom-
panies which would absorb a share of
from undistributed cash surpluses, re-
mended by the President's Committee
the losses and expenses of the program.
placement, or depreciation funds or re-
on Urban Housing, chaired by Mr. Edgar
The Federal Government would make
serves available in cash or new capital.
F. Kaiser, as a way of involving big busi-
premium equilization payments to the
TITLE VHI-SECONDARY MORTGAGE MARKET
ness in solving the housing problems of
pool to cover losses and also would pro-
This is something that I think is of
our cities.
vide reinsurance coverage to the pool
great interest. It relates to what we call
TITLE X-RURAL HOUSING
for excessively high losses. Insurance
FNMA.
This title would provide for rural fam-
companies in the pool would pay a pre-
This title would amend the FNMA
ilies the same benefits made available
mium to the Government for this rein-
Charter Act of 1954 by providing for the
under section 101 of this bill for urban
surance coverage in years of low-flood
spin-off of the secondary mortgage mar-
families, that is, an interest subsidy pay-
losses. Other non-risk-bearing insurance
ket facility into a privately owned corpo-
ment to help lower income families ac-
companies would participate in the pro-
ration which would be called the Federal
quire homeownership.
gram as fiscal agents of the pool.
S6390
CONGRESSIONAL RECORD - SENATE
May 24, 1968
TITLE XIII-INTERSTATE LAND SALES
Mr. JAVITS. Mr. President, will the
before this body, it is a bill that contains
This title would give to the Secretary
Senator yield to me at that point?
provisions that will be supported by some
of HUD authority to require full dis-
Mr. SPARKMAN. Let me add one fur-
and opposed by others.
closure in the sale or lease of certain un-
ther thought.
The bill was not easy to arrive at in
developed land in interstate commerce
That was adopted, and, with changes
our committee. The committee unani-
or through the mails. All developers or
that have taken place from time to time
mously reported the measure, but many
sellers of such land would be required to
since then, one of the most remarkable
of the provisions represent a compromise
file with the Secretary a statement of
jobs in the history of this country has
view on the part of different members of
record listing certain required informa-
been done in building housing to house
the committee.
tion about the ownership of the land, its
students and faculty members at our
I can say very candidly that there are
title, its physical nature, its access and
overcrowded and overcrowding colleges
some provisions in the bill which, if I
egress by roads and utilities and related
throughout this country.
had been writing the bill, would not be in
matters. Pertinent extracts of this report
I do not know what the colleges would
the bill. However, the bill represents the
would have to be included in a property
have done without it. I believe I am safe
bringing together of the thinking of the
report submitted to the purchaser before
in saying that there is not a single col-
members of the committee who worked
the sale is consummated.
lege in my State that has not benefited,
long, hard, and earnestly on getting out
TITLE XIV-10-YEAR HOUSING PROGRAM
and benefited immeasurably, from this
a bill.
This title would require the President
program.
I call attention again to the fact that
I cannot state exactly how much
to make a report on or before January 15,
this bill is not something new that has
money has been loaned out SO far, but I
1969, setting forth a 10-year plan on the
just been developed or that the commit-
would say around $3 billion. There has
construction and financing of housing,
tee felt was forced upon it.
never been one dime of deficiency. I think
both Government and conventionally fi-
We started working on this bill nearly
it is a remarkable record.
nanced, for each of the 10 years, together
2 years ago. We started working on hous-
We are making, this year, a change
with a statement of what reduction in
ing and urban development legislation
recommended by the distinguished Sena-
substandard units is expected; also an
nearly a year and a half ago, in the early
tor from New York, to whom I now yield.
estimate of cost of various Federal pro-
part of the first session of this Congress.
Mr. JAVITS. I merely wish to say
grams for legislative action. Residential
And we have worked over the months on
briefly, Mr. President, that it is such a
mortgage market needs would also be re-
developing the committee bill. And the
creative program because it does operate
ported. Annual reports would subse-
bill does represent the composite think-
with practically no impact on the budget.
quently be made for each of the 10 years
ing of our committee.
We struggled, if the Senator will recall,
thereafter on progress of the projected
I think that S. 3497 is by and large a
with an amendment of mine to increase
figures.
good bill. In fact, I think it is one of the
Mr. President, I said a few minutes ago
the amount of college housing, and
most comprehensive bills we have ever
that the President's 10-year proposal is a
found it extremely trying because of the
had. I want to go further and say that
good proposal. I believe the committee
budgetary impact; and I was almost
I think it is one of the best bills we have
forced to this alternative as a means of
will back me up in that statement.
ever had, and that it is one that helds
escaping the budgetary impact. I express
Many people are not satisfied with this
more promise for persons of low income
my appreciation to the Senator from
bill, thinking it does not go far enough.
to get decent housing, either rented or
Alabama and to the committee for hav-
But, Mr. President, we have written a
purchased. that we have ever had.
ing now embraced it and included it in
bill which we think goes just about as
Mr. PERCY. Mr. President, will the
the bill.
far as our present resources will permit.
Senator yield?
Mr. SPARKMAN. It was a most wel-
The organization of homebuilders in this
Mr. SPARKMAN. I yield.
come suggestion.
country to do the job, the materials with
Mr. PERCY. Mr. President, I should
Mr. JAVITS. I thank the Senator.
which to do it, the labor force with which
like to comment that, having been a
Mr. SPARKMAN. It was a happy solu-
to do it, and all of that must necessarily
member of the Housing Subcommittee, I
tion of a problem that was becoming
be brought together as fast as we can, as
have gone back over the history of some
difficult because we could not provide the
we move into the program proposed by
30 years, and in my own comments this
money in sufficient amounts to take care
our bill. This is why the committee feels
morning, which will follow those of the
of all of the loans that the colleges
the need for annual reports on the hous-
distingushed Senator from Texas [Mr.
needed.
ing needs of the Nation.
TOWER], I will comment more in detail
We are not doing away with the direct
on that. However, I think one point
TITLE XV-MISCELLANEOUS
loan program-we are merely setting up
should be clearly made at this point.
One of the most important provisions
an alternative method of financing. I
This has been truly a bipartisan effort.
under this title is the new interest sub-
think it will be of tremendous help.
The bill has been developed under the
sidy financing device for college housing
As the Senator from New York has
great leadership of the chairman, the
construction. Under existing law, direct
pointed out, it would have relatively little
distinguished Senator from Alabama,
Federal loans are made to colleges at 3-
impact on the budget.
with great resourcefulness. He has been
percent interest rates. This program has
Mr. JAVITS. I thank the Senator.
assisted by such members of the com-
worked well but, because of recent ex-
Mr. SPARKMAN. Under another sec-
mittee as the Senator from Minnesota
pansion of colleges throughout the Na-
tion of this title, new authority would be
[Mr. MONDALE], and. on the minority
tion, the funds needed to be appropriated
given to the Secretary of HUD to increase
side, the distinguished Senator from
for this purpose have been far short of
the planning funds for the model cities
Texas [Mr. TOWER], the ranking mem-
the need.
program by $12 million. By this action,
ber of the committe, and the distin-
To overcome this dilemma, this bill
the committee anticipates a third round
guished Senator from Utah [Mr.
would authorize the Federal Govern-
of cities would apply for planning assist-
BENNETT].
ment to pay interest subsidies amounting
ance under this program. The bill would
We have been working for 2 years in
to the difference between a 3-percent
also add $1 billion for operating for
the committee on the bill. We now have
loan and the market interest rate. The
fiscal year 1970 for model cities. These
in Washington the representatives of the
Federal commitment is far reduced by
funds are used as supplementary grants
Poor People's Campaign. They have pre-
this means and it is believed a satisfac-
to cities carrying out model cities pro-
sented to the Secretary of HUD the re-
tory quantity of housing can be built
granis and would be added to the $900
quests they are making in the housing
with a minimum of Federal outlay.
million authorized under existing law.
field. I believe that the distinguished
Mr. President, this is one of the most
In conclusion, Mr. President, S. 3497.
Senator from Alabama will be particu-
successful programs we have had. It was
is a bill like many others which we have
larly interested in the fact that as we
back in 1955 that I offered an amendment
brought the Senate from the Banking
go over the requests made by the Poor
to the Housing Act of that year to provide
and Currency Committee. It is a bill that
People's Campaign to the Secretary of
a formula for lending money to colleges
continues our many past efforts toward
HUD and look over in detail some of the
in order that they might expand their
helping the American people obtain the
things they have talked about, we find
facilities to help take care of the ever-
goal declared in the Housing Act of 1949,
that we have anticipated in the past 2
increasing load of GI's, veterans of World
"a decent home and suitable living en-
years in the course of our hearings and
War II, and veterans who could be ex-
vironment for every American family."
in our response to the genuine need,
pected back from the Korean war.
And like any other measure which comes
many of the requests that they have
May 24, 1968
CONGRESSIONAL RECORD SENATE
6391
made of the Secretary. Anyone can
Section 3.-Provides that in administering
with the assistance of budget, debt manage-
clearly see that there is no question
programs authorized by sections 221(d) (3),
ment, and related counseling provided by
about our acceding to demands being
235, and 236 of the National Housing Act;
the Secretary. Mortgage insurance under this
the low-rent public housing program of the
made upon us.
program would have to meet the require-
U.S. Housing Act of 1937; and section 101 of
ments (other than credit and income re-
We are sympathetic with the repre-
the Housing and Urban Development Act of
quirements) under certain existing FHA
sentatives of the poor who present to
1965, the Secretary of the Housing and Urban
single-family sales program, except that the
us that we had seen as a great need in
Development shall require, to the greatest
principal obligation of the mortgage could
this country.
extent feasible, opportunities for employ-
not exceed $15,000 ($17,500 in high-cost
Our response is a response that has
ment arising in connection with construction
areas) and the mortgagor could not under-
gone back several years now, in antici-
or rehabilitation of housing assisted under
take a mortgage which, in combination with
pation of all of the things that have
such programs be given to lower income per-
local real estate taxes, required monthly pay-
been presented in this bill that has been
sons residing in the area of such housing.
ments for principal and interest which ex-
carefully worked on for many months
TITLE I-LOWER INCOME HOUSING
ceeds 25 percent of the mortgagor's income.
The amount of insurance under this section
now.
Homeownership for Lower Income Families
is limited to $200 million outstanding at any
Every member of the committee has
Section 101.-Adds a new section 235 to
one time.
participated and worked cooperatively
title II of the National Housing Act to es-
with representatives from HUD and with
tablish a mortgage insurance program based
Relaxation of mortgage insurance require-
on an interest rate subsidy to provide home-
ments in certain urban neighborhoods
the Secretary of Housing and Urban
ownership for lower income families. The in-
Section 103.-Amends section 223 of the
Development.
terest rate subsidy payment which would be
National Housing Act by adding a new sub-
It has been a great honor and privi-
paid by the Secretary of the Housing and
section (e) to give FHA a more flexible au-
lege for me to work under the leadership
Urban Development to the mortgagee could
thority in providing financing for the repair,
of the Senator from Alabama.
not exceed the lesser of: (a) The difference
rehabilitation, construction, or purchase of
I certainly support everything the
between the monthly payment for principal,
properties located in older, declining urban
chairman has said this morning.
interest, and mortgage insurance premium
areas by authorizing FHA to accept for insur-
Mr. SPARKMAN. Mr. President, I cer-
for a market rate mortgage, and the amount
ance mortgages on properties which may not,
tainly thank the Senator from Illinois,
the monthly payment would be for principal
because of the areas in which they are lo-
and interest with a 1-percent mortgage, or
cated, be able to meet all the normal eligibil-
and I share with him the feeling he has
(b) the difference between 20 percent of the
ity requirements for insurance. Permits such
expressed that the bill represents the
mortgagor's monthly income and the monthly
mortgages to be accepted for insurance where
handiwork of 14 members of the com-
payment under the mortgage. The subsidy
FHA is able to establish that the areas are
mittee.
payment would be available to a purchaser
reasonably viable, giving consideration to the
Mr. President, I have expressed my
having an income not in excess of 70 percent
need for providing adequate housing for
of the limits prescribed for eligibility to OC-
families of low and moderate income in such
thanks to the members of the commit-
tee and the subcommittee without men-
cupy projects financed under the FHA sec-
areas and that the properties are an accept-
tion 221(d) (3) below-market interest rate
able risk in view of such consideration.
tioning their names. However, I believe
program, except that 20 percent of the con-
Special risk insurance fund
I ought to say that the distinguished
tract funds could be used to assist families
Section 104.-Adds a new section 238 to
Senator from Texas [Mr. TOWER], the
with income above these limits. For each
title II of the National Housing Act to estab-
ranking minority member of the com-
minor child in the household, $300 would be
lish a "Special Risk Insurance Fund," which
mittee, is always most helpful and CO-
deducted from family income. The interest
fund is not intended to be actuarially sound
operative.
subsidy payment would decrease as the
and out of which claims would be paid on
The same thing is true with respect
homeowner's income rises.
mortgages insured under sections 101 (home-
to the Senator from Utah [Mr. BENNETT],
The subsidy payment could only be made
ownership assistance), 102 (credit assist-
the Senator from Iowa [Mr. HICKEN-
with respect to new or rehabilitated housing
ance), 103 (properties in older, declining ur-
LOOPER], the Senator from Illinois [Mr.
meeting the requirements of the FHA sec-
ban areas) and 201 (rental and cooperative
tion 221(d) (2) sales housing program, the
housing for lower income families) of the
PERCY], and the Senator from Massa-
234 condominium program, the 213 coopera-
bill. Payments on claims would be made in
chusetts [Mr. BROOKE].
itve program, or section 221(h) as incor-
cash or debentures. Income such as insur-
I could go right down the list on the
porated into the new section with some
ance premiums and service charges in con-
Democratic side also.
modifications. However, during the first 3
nection with these programs would be de-
Mr. President, perhaps I should just
years after enactment assistance payments
posited in the new fund. Authorizes $5 mil-
list the Democratic members of the com-
could be made with respect to existing hous-
lion advance from general insurance fund
mittee. The members are WILLIAM PROX-
ing as follows: 25 percent of the contract
to establish new fund, which is repayable
MIRE, of Wisconsin; HARRISON A. WIL-
funds authorized by appropriation acts in
and authorizes appropriations when neces-
the first year; 15 percent of the contract
LIAMS, JR., of New Jersey; EDMUND S.
sary to supplement and maintain adequacy
funds authorized in the second year; 10 per-
of the new fund.
MUSKIE, of Maine; EDWARD V. LONG, of
cent of the contract funds authorized in
Condominium and cooperative ownership for
Missouri; THOMAS J. MCINTYRE, of New
the third year. In addition, payments could
low and moderate income families
Hampshire; WALTER F. MONDALE, of Min-
be made with respect to existing housing for
iesota; GALE McGEE, of Wyoming, WIL-
displaced families, families with five or more
Section 105.-Amends section 221 of the
.IAM B. SPONG, JR., of Virginia.
minors, or families living in public housing,
National Housing Act by adding new sub-
All of the members of the committee
as well as for families who purchase dwelling
sections (i) and (j) to permit section 221
units released from the project mortgage for
(d) (3) below-market interest rate rental
ave been helpful and almost without
a 236 project or a rent supplement project.
projects: (1) To be converted to condomi-
exception suggestions have been adopted
The maximum mortgage under the program
nium ownership; or (2) to be converted to
in the bill that have been made by each
would be $15,000 ($17,500 in high-cost areas),
cooperative ownership. Families purchasing
member of the committee. I pay tribute
but each limit would be increased by $2,500
condominium or cooperative units would
to all members of the committee for the
for families of five or more persons. The
be generally required to meet income limits
dedicated service they have rendered in
section 221(d) (2) mortgage ceilings would
established for occupancy under the (d)
perfecting this piece of legislation. I feel
be raised to the same level. Counseling serv-
ices are authorized.
(3) below-market interest rate program.
somewhat safe in saying perfecting be-
cause I think it is an excellent piece of
This section also authorizes contract au-
Assistance to nonprofit sponsors for low and
egislation.
thority subject to appropriations acts to fi-
moderate income housing
nance the program in the following manner:
Section 106.-Establishes a new program
Mr. President, I ask unanimous con-
$75 million annually prior to July 1, 1969,
within HUD under which the Secretary may
ent to have printed at this point in the
which amount may be increased by $100 mil-
provide technical assistance to nonprofit
RECORD a section-by-section analysis of
lion on July 1, 1969, and by an additional
sponsors of low and moderate income hous-
he bill.
$125 million on July 1, 1970.
ing. Also authorizes the Secretary to make
There being no objection, the section-
Credit assistance
non-interest-bearing loans to nonprofit or-
y-section analysis of the bill was ordered
Section 102.-Adds a new section 237 to
ganizations for financing up to 80 percent of
) be printed in the RECORD, as follows:
title II of the National Housing Act to au-
preconstruction costs in connection with fed-
OUSING AND URBAN DEVELOPMENT ACT OF 1968
thorize mortgage insurance for families of
erally assisted low and moderate income
.3497)-SECTION-BY-SECTION SUMMARY
low and moderate income who cannot qualify
housing projects. These loans could cover
Section 1.-Provides that the bill shall be
for mortgage insurance under existing FHA
such preconstruction items as architectural
ted as the "Housing and Urban Develop-
programs because of their credit histories
fees, land options, and engineering surveys.
ent Act of 1968."
or irregular income patterns, but who the
A revolving fund would be established, with
Section 2.-States the declaration of policy
Secretary finds are "reasonably satisfactory"
$7.5 million authorized the first year and $10
[ the bill.
credit risks and capable of homeownership
million the second year.
6392
CONGRESSIONAL RECORD
May 24, 1968
Insurance protection for homeowners
Contracts for interest reduction payments
pursuant to regulations prescribed by him.
Section 107.-Authorizes the Secretary of
subject to approval in appropriations acts
Under such regulations, the mortgagor would
HUD, in cooperation with the private insur-
would be authorized in the following
have to agree to place in trust any income
ance industry, to develop a plan for estab-
amounts: $75 million annually prior to July
or funds derived from the project in excess
lishing an insurance program to enable
1, 1969, which amount may be increased by
of what is required to meet actual and nec-
homeowners to meet their monthly mortgage
$100 million on July 1, 1969, and by $125
essary operating expenses. The Secretary
payments in time of personal economic ad-
million on July 1, 1970.
could provide for granting such consent in
versity. Also directs the Secretary to make a
Rent supplement program
any case or class of cases without regard to
report on his actions along with his recom-
Section 202.-Amends section 101 of the
the requirements of the regulations where
mendation for establishing such a program
he determined such action would not jeop-
Housing and Urban Development Act of 1965
within 6 months following enactment of this
ardize the interests of the United States. Any
to increase the appropriation authority for
act.
knowing and willful misdistribution of the
the rent supplement program by $40 million
rents or other income received during the
National advisory commission on low-income
for fiscal year 1970 and $100 million for fiscal
period of extension or modification would
housing
year 1971. Also authorizes State or locally
subject the party to criminal penalty ($5,000
Section 108.-Establishes a National Ad-
assisted rent supplement benefits.
or 3-year imprisonment, or both).
visory Commission on Low-Income Housing
Part B-Low-Rent Public Housing
Condominiums
to undertake a comprehensive study and in-
Increased low-rent public housing
vestigation of the resources and capabilities
Section 304.-Amends section 234(c) and
authorization
in the public and private sectors of the eco-
(f) of the National Housing Act to: (1) Pro-
nomy which may be used to fulfill more
Section 203.-Amends section 10(e) of the
vide the same downpayment and maximum
completely the objectives of the national goal
U.S. Housing Act of 1937 to increase the an-
mortgage limitations for FHA condominium
of "a decent home and suitable living en-
nual contribution contract authority by $100
programs as are provided for the regular sin-
vironment for every American family," par-
million on enactment and by $150 million
gle-family FHA section 203(b) program, (2)
ticularly as such goal relates to low-income
for each of fiscal years 1970 and 1971.
permit blanket mortgages to cover four or
families. The Commission is directed to sub-
Upgrading management and services in
more units instead of the present limitation
mit to the President and the Congress an
public housing projects
of five or more units, and (3) permit FHA in-
interim report with respect to its findings
Section 204.-Amends section 15 of the U.S.
surance for individual units in a condomini-
and recommendations not later than July 1,
Housing Act of 1937 to authorize the Secre-
um project with two to 11 dwelling units
1969. and a final report not later than July 1,
tary of HUD to enter into grant contracts
without requiring that the project be first
1970.
with local housing authorities to assist them
covered by an FHA-insured project mort-
National Homeownership Foundation
in upgrading their management activities
gage.
and to provide tenant services to families OC-
Insurance of loans for purchase of fee simple
Section 109.-Creates a National Home-
ownership Foundation, the purpose of which
cupying public housing. Authorizes appro-
title from lessors
would be to provide technical and limited
priation of $20 million in fiscal year 1969 and
Section -Adds a new section 240 to
financial assistance to public and private
$40 million in fiscal year 1970 for such
the National Housing Act to permit FHA to
organizations which have as their purpose
contracts.
insure loans of homeowners financing the
providing increased homeownership and
Purchase of units by tenants
purchase of fee simple title to property on
housing opportunities for lower income fam-
which their homes are located where the
Section 205.-Amends section 15(9) of U.S.
ilies. The Foundation, which would be a Gov-
Housing Act of 1937 to broaden existing law
homeowners have only leasehold interests to
ernment-chartered nonprofit private corpora-
the land.
to permit local housing authorities to sell any
tion, would be administered by a Board con-
low-rent housing units to tenants if such
Section -Amends 5(c) of the Home
sisting of 18 members, 15 of whom would be
units are suitable for individual ownership.
Owners' Loan Act of 1933 to permit saving:
appointed by the President with the advice
and loan associations to invest in the loan
(Existing law permits tenants to purchase
and consent of the Senate. The remaining
described above.
only detached or semidetached units.)
three members would be the Secretary of
Public housing in Indian areas
Extend section (2) sales housing pro
Housing and Urban Development, Secretary
grain for two-, three-, and four-family res
of Agriculture, and the Director of the Office
Section 206.-Amends section 1 of U.S.
dences to all low and moderate incon
of Economic Opportunity. The Foundation
Housing Act of 1937 to permit public housing
families
would also be authorized an appropriation of
assistance for Indian families living in rural
Section 306.-Amends section (d) (2) (
$10 million to be used in carrying out its
farm areas. (Existing law limits public hous-
the National Housing Act to authorize mort
prescribed functions.
ing assistance to urban and rural nonfarm
gage insurance for two-, three-, and four
TITLE II-RENTAL HOUSING FOR LOWER INCOME
areas.)
family residences to all low and moderat
FAMILIES
TITLE III-FEDERAL HOUSING ADMINISTRATION
income families. (Existing law limits mort
INSURANCE OPERATIONS
Part A-Private Housing
gage insurance only to displaced low an
Mortgage insurance premiums for servicemen
moderate income families.)
Rental and cooperative housing for lower
and their widows
income families
Remove dividend restriction from nondwell
Section 201.-Adds a new section 236 to
Section 301.-Amends section 222 of the
ing facilities in section 221 projects
title II of the National Housing Act to pro-
National Housing Act to permit payment of
Section 307.-Amends section 221(f) of t1
vide rental and cooperative housing for low-
FHA insurance premium by the Secretaries of
National Housing Act to remove the require
er income families. Mortgages insured under
Defense and Transportation for servicemen
ment that mortgagors of multifamily pro
section 236 would carry a market interest
who assume a mortgage previously insured
ects insured under section 221 and locat
rate, but the Secretary of HUD would pay to
under any other provision of the National
in urban renewal areas waive the rights
the mortgagee on behalf of the mortgagor
Housing Act. Also requires Secretaries to con-
remove dividends on the equity investme
an amount equal to the difference between
tinue premium payment after serviceman's
of the project devoted to community at
the monthly payment for principal, interest,
death on behalf of his widow for a 2-year
shopping facilities where these facilities a
and mortgage insurance premium at the mar-
period or until she sells the house, whichever
designed to serve the needs of others tha
ket rate and the monthly payment for prin-
is sooner. Also directs Secretaries to notify
residents of the project. (The restrictio
cipal and interest at 1 percent. Occupants,
promptly the widow of the increase in costs
would not be removed in the case of sec. 22
however, would pay 25 percent of their in-
she must bear at end of 2-year period.
(d) (3) BMIR projects.)
come as rent up to the full market rental.
Seasonal homes
Supplemental loan program for project
The sponsor would reimburse the Secretary
Section 302.-Adds a new section 203 (m)
financed with FHA insured mortgages
for that part of rent receipts in excess of the
to the National Housing Act to authorize
Section 308-Adds a new section 223(f) t
amount which would be required under 1-
FHA to insure mortgages on seasonal homes
the National Housing Act to permit the Sec
percent financing, and this amount could be
not exceeding $15,000 and 75 percent of the
retary of HUD to insure supplemental loar
used to make other interest reduction pay-
appraised value on an acceptable risk basis,
to finance improvements, repairs, and add
ments. Occupancy of assisted projects would
taking into consideration the economic
tions to multifamily rental projects (include
be available only to tenants whose incomes
potential of the area and the effect the in-
are not in excess of 70 percent of the limits
ing nursing homes and housing for the e
surance of such mortgages would have on the
derly) and group practice facilities finance
prescribed for eligibility under the section
availability of mortgage credit in the area.
with an FHA insured mortgage. Such finan
221 (3) below-niarket interest rate pro-
Also requires proper steps to preserve natural
ing would supplement existing insured mor
gram, except that 20 percent of contract
resources of the area.
gages and would be available without r
funds could be used with respect to families
with incomes above these limits. For each
Modification in terms of insured mortgages
financing the existing mortgage.
minor child in the household, $300 would be
covering multifamily projects
Home improvement loans-Increase in max
deducted from family income. Section 221
Section 303.-Adds a new section 239 to the
mum maturity, finance charge, and lo:
(d) (3) BMIR mortgages (prior to final en-
National Housing Act to require the Secre-
amount
dorsement) and section 202 housing for the
tary of HUD to approve a request for the ex-
Section 309.-Amends section 2(b) of t)
elderly mortgages (up to, or a reasonable
tension of time for curing a default on any
National Housing Act containing the title
time thereafter, project completion) could be
FHA multifamily mortgage or for a modifica-
home improvement program to: (1) Increa
refinanced under this program.
tion of the terms of such a mortgage only
the maximum loan limitation from $3,500
May 24, 1968
CONGRESSIONAL RECORD
S 6393
$5,000; (2) increase the maximum maturity
sued by private new community developers
which are scheduled for rehabilitation or
from 5 years and 32 days to 7 years and 32
to help finance the development of new com-
concentrated code enforcement within a
days; and (3) increase the maximum financ-
munity projects. This title would provide:
reasonable period of time.
ing charge from $5 to $5.50 per $100 on the
Maximum guarantee: Cannot exceed: (a)
Rehabilitation in urban renewal areas
first $2,500 of the loan and from $4 to $4.50
The lesser of 80 percent of the Secretary's
per $100 on the amount in excess of $2,500.
estimate of the value of the property upon
Section 504.-Amends section 110(c) (8) of
Experimental housing program
completion of the land development, or (b)
the Housing Act of 1949 to remove the pres-
the sum of 75 percent of the Secretary's esti-
ent limitation on the acquisition and re-
Section 310.-Amends section 223 of the
mate of the value of the land before develop-
habilitation of residential properties by a
National Housing Act, the FHA experimental
housing program, to make the program avail-
ment and 90 percent of his estimate of the
local urban renewal agency. (Existing law
actual cost of the land development.
permits the local agency to acquire and re-
able for use in connection with all FHA
Guaranteed ceilings: $50 million for any
habilitate for demonstration purposes no
programs.
single new development; $500 million aggre-
more than 100 units or 5 percent of the total
Term of FHA mortgages for land
gate outstanding principal obligation at any
residential units in the urban renewal area,
development
one time.
whichever is lesser.)
Section 311.-Amends section 1002(d) (1)
Revolving fund for guarantee: Fees and
Disposition of property for low and moderate
of the National Housing Act to increase the
charges collected by the Secretary will be
income housing
maturity for FHA mortgages securing sub-
deposited in a revolving fund to cover any
Section 505.-Amends section 107 of the
division development from 7 to 10 years with
liabilities under the guarantees. In addition,
Housing Act of 1949 to make it clear that
further authority placed in the Secretary of
the full faith and credit of the United States
land may be disposed of for low as well as
HUD to go beyond a 10-year maturity if he
is pledged to payment of the guarantees and
moderate income housing purposes and to
deems such longer term is necessary.
appropriations to cover program operations
permit this disposition to be accomplished
Rehabilitated multifamily projects in urban
and nonadministrative expenses and, if nec-
by lease as well as by sale. Would also permit
renewal areas
essary, any guarantee payments are author-
land to be sold to a mortgagor qualified under
ized.
Section 312.-Amends section 220(d) (3)
section 236 of the National Housing Act
Small builders: Requires HUD to adopt re-
(B) (ii) and (d) (3) (iii) of the National
(added by sec. 201 of this bill) and to non-
Housing Act to permit FHA insurance under
quirements encouraging small builders to
profit organizations eligible under section
sections 220 (urban renewal housing) and
participate in new community projects.
221 (h) or under 235(j) (1) of the National
Supplementary grants: Authorizes supple-
221 (d) (3) (low and moderate income fami-
Housing Act (added by sec. 101 of this bill)
mental grants to States and localities as-
lies) for multifamily properties in urban re-
which rehabilitate property and sell it to
newal areas which have been rehabilitated
sisting new community development with
low or moderate income families.
basic water and sewer and open space proj-
by local agencies.
ects. The additional grant is limited to 20
Grants for low and moderate income housing
Miscellaneous housing insurance
percent of cost of the facility and a substan-
in open land projects
Section 313.-Amends section 223 of the
tial number of housing units for low and
Section 506.-Amends section 103(a (1) of
National Housing Act to permit refinancing
moderate income person must be made
the Housing Act of 1949 to permit grants to
of FHA mortgages insured under any of the
available through such development project.
be made with respect to urban renewal open
sections or the titles of the National Hous-
(Total Federal grant cannot exceed 80 per-
land projects (which now only qualify for
ing Act. In addition, this section would per-
cent of facility cost.) Authorizes an appro-
loans) in an amount not to exceed two-thirds
mit FHA mortgages assigned to the Secretary
priation of not to exceed $5 million for sup-
of the difference between the proceeds from
or executed in the sale of an acquired prop-
plemental grants for fiscal year 1969 and not
any land disposed of at its value for low or
erty to be insured under any section or title
to exceed $25 million for fiscal year 1970.
moderate income housing (under sec. 107 of
of that act. It also authorizes insurance of
Sections of this title also require cost cer-
such act) and the proceeds which would
supplementary loans to cover excess of ex-
tifications in connection with a land de-
have been realized if the land had been
penses over income for first 2 years of multi-
velopment project and authorize the General
disposed of at its fair value without regard
family projects at the interest rate in effect
Accounting Office to audit the transactions
to the special provisions of section 107.
at the time the supplementary loan is in-
of developers whose obligations are guaran-
Urban renewal. loan contracts
sured.
teed pursuant to this title.
Section 507.-Amends section 102(c) of the
Supplementary loans for coperative housing
TITLE V-URBAN RENEWAL
Housing Act of 1949 to permit a local public
purchased from the Federal Government
Section 501-Amend title I of the Housing
agency to borrow funds to finance project
Section 314.-Amends section 213(j) of the
Act of 1949 by adding a new subtitle head-
undertakings on the private market at an
National Housing Act to authorize mortagage
ing to read. "Part A-Urban Renewal Proj-
interest rate in excess of the Federal lending
rate set out in its loan contract with the
insurance for supplementary loans to hous-
ects, Demolition Programs and Code Enforce-
ment Programs" and further amends that
Government. The difference between the in-
ing cooperatives which purchased wartime
housing from the Federal Government.
title by adding a new "Part B-Neighborhood
terest cost on the private market and the
interest cost at which the LPA could have
Equipment in nursing homes
Development Programs." This new part B
added to title I authorizes the Secretary of
borrowed from the Federal Government un-
Section 315.-Amends section 232 of the
HUD to provide financial assistance to local
der its loan contract would be made up by a
National Housing Act to permit the cost of
public agencies on an annual basis to assist
supplemental grant from the Government.
major items of equipment necessary for the
them in carrying out "neighborhood develop-
Project completion prior to disposition of
operation of a nursing home to be included
ment programs." A neighborhood develop-
certain property
in the FHA insured mortgage.
ment program would consist of urban re-
Section 508.-Amends section 106 of the
Flexible interest rates for certain FHA in-
newal project undertakings and activities in
Housing Act of 1949 to permit the Secretary
surance programs
one or more urban renewal areas that are
of HUD to allow an urban renewal project
Section 316.-Amends section 3(a) of Pub-
planned and carried out on the basis of an-
to be closed out where: (1) Not more than
lic Law 90-301 to permit the Secretary of
nual increments. The requirements govern-
5 percent of the total acquired land remains
HUD, until October 1, 1969, to establish the
ing such undertakings and activities would
to be disposed; (2) the local public agency
interest rate for new mortgage insurance
be similar to those governing the provision of
does not expect to be able, due to circum-
programs authorized by new sections 223(f)
Federal financial assistance for regular urban
stance beyond its control, to dispose of that
235(j), and 240 of the National Housing Act
renewal projects.
land in the near future; (3) all other project
(added by secs. 101, 314, and 305, respectively,
Increased authorization
activities are completed; and (4) the local
of the bill) at such rate he believes neces-
Section 502.-Amends section 103 (b) of
public agency has agreed to dispose of or
sary to meet the market.
retain such land in the future for uses in
the Housing Act of 1949 to increase the con-
Sale of rehabilitated units in multifamily
tract authority for urban renewal and other
accordance with the urban renewal plan.
structures
title I activities by $1.4 billion on July 1,
This section would also amend section 110(f)
of such act to include in the amount of land
Section 317.-Amends section 221(h) of
1969. This section also authorizes an increase
proceeds, for the purpose of computing net
the National Housing Act to: (1) Permit the
of $350 million for urban renewal projects
project cost, an amount equal to the value
rehabilitation and sale of individual units
in model city areas.
of the land not yet disposed of.
(with a 3-percent mortgage) in a multi-
Rehabilitation-grants
family structure; and (2) permit the blanket
Demolition grants
Section 503.-Amends section 115(a) of the
mortgage to cover four or more units instead
Housing Act of 1949 to increase the rehabili-
Section 509.-Amends section 116(a) of the
Housing Act of 1949 to authorize the Secre-
of the present limitation of five or more
tation grant that can be made to low-income
tary of HUD to make grants for the demoli-
units.
homeowners from $1,500 to $2,500. This sec-
tion of nonresidential structures that are
TITLE IV-GUARANTEES FOR FINANCING NEW
tion also makes a technical amendment to
harborages or potential harborages of rats.
COMMUNITY LAND DEVELOPMENT
change the term "structure" to "real prop-
erty" in order to permit the use of grant
Air rights in urban renewal areas
Sections 401-416.-Add a new title to be
funds for rehabilitation relating to aspects
Section 510.-Amends section 110(c) of the
referred to as the "New Communities Act of
of the property other than the dwelling struc-
Housing Act of 1949 to permit the carrying
1968" to the housing laws to permit the
ture itself. Finally, this section authorizes
out of air rights urban renewal projects and
Secretary of HUD to guarantee the bonds,
rehabilitation grants in areas (other than
the construction of necessary foundations
debentures, notes, and other obligations is-
urban renewal and code enforcement areas)
and platforms to provide educational facil-
6394
CONGRESSIONAL RECORD SENATE
May 24, 1968
ities. Under present law, these activities may
thorizes grants under section for re-
the water and sewer facilities program from
be assisted only when they are for low and
gional and district councils of government as
July 1, 1968, to October 1, 1969.
moderate income housing or for industrial
well as those organized on a metropolitan
Authorizations for water and sewer facilities,
development where the area is not suitable
basis and a broadening of the definition of
neighborhood facilities, and advance ac-
for low and moderate income housing.
comprehensive planning for the provision of
quisition of land programs
Interim assistance for blighted areas
governmental services and for the develop-
ment and utilization of human and natural
Section 605.-Amends section 708(a) of the
Section 511.-Adds a new section 118 to
resources. This section has added to the pre-
Housing and Urban Development Act of 1965
title I of the Housing Act of 1949 to author-
amble of section 701 a statement to make it
to provide that any funds authorized but not
ize the Secretary of HUD to contract to make
grants, in an aggregate amount not to exceed
clear that the committee expects HUD to per-
appropriated for the basic water and sewer
mit the judicious use of private planning
facilities, neighborhood facilities, and the ad-
$20 million in any fiscal year, to cities and
other municipalities or counties to assist in
consultants by State and local governments
vance acquisition of land programs will re-
where these governments deem it appropri-
main available for appropriation through
taking interim steps to alleviate harmful con-
ditions in any slum and blighted area of the
ate in carrying out planning activities as-
fiscal year 1970. (Present authorization for
sisted under section 701. The section fur-
these programs expires with fiscal year 1969.)
community which is planned for substantial
clearance, rehabilitation or federally assisted
ther authorizes grants to official governmen-
In addition, this section authorizes an appro-
code enforcement in the near future but
tal planning agencies for areas where rapid
priation of $115 million for fiscal year 1970
which needs some immediate short-term
urbanization is expected to result on land
for grants for water and sewer projects.
developed or to be developed as a new com-
Open space land program
public action until permanent action can
take place. Such interim assistance grants
munity under title IV of the bill and to re-
Section 606.-Amends section 702(b) of the
could not exceed two-thirds of the cost of
gional commissions established pursuant to
Housing Act of 1961 to convert the funding
planning and carrying out the interim
the Public Works and Economic Development
provision for contracts under the open space
Act of 1965.
program except that a three-fourths grant
land program from contract authority to reg-
The bill also authorizes additional 701
could be made to any community with a
ular authorization for appropriation and au-
population of 50,000 or less. A workable pro-
planning funds amounting to $35 million for
thorizes the appropriation of the unused por-
gram is a prerequisite of an interim assist-
fiscal year 1969 and $125 million for fiscal
tion of contract authority. This section
ance program. Also, relocation assistance and
year 1970.
would also increase the appropriation au-
payments would be available to those dis-
Planned areawide development
thority by $150 million in fiscal year 1970.
Section 602.-Amends title II of the Dem-
This section would further increase the
placed as a result of the interim program.
This section also requires the Secretary of
onstration Cities and Metropolitan Develop-
amount of grant funds which can be used
HUD, wherever feasible, to encourage the em-
ment Act of 1966 by changing the heading of
annually for studies and publications from
ployment of unemployed or underemployed
such title to "Planned Areawide Develop-
$50,000 to $125,000.
residents of the area in carrying out activities
ment" and in keeping with this change in
Authorize the making of feasibility studies in
under this section.
title amends the sections and subsections
the public works planning advances pro-
Rehabilitation loans
thereto to permit supplementary incentive
gram
Section 512.-Amends section 312 of the
grants authorized for certain federally as-
Section 607.-Amends section 702(a) of the
Housing Act of 1964 to: (1) Extend the re-
sisted projects in metropolitan areas to be
Housing Act of 1954 to clarify the authority
habilitation loan program from October 1,
made for such projects being carried out in
of the Secretary of HUD to make advances for
1969, to October 1, 1970, and (2) authorize
any multijurisdictional area such as the
the conduct of feasibility studies regarding
such loans in areas, other than urban re-
rural planning districts which are authorized
specific public works, the planning of which
newal and concentrated code enforcement
by the amendments in section 601 of this bill.
may be assisted under section 702.
areas, which are scheduled for rehabilitation
Also makes available for grant purposes
TITLE VII-URBAN MASS TRANSPORTATION
or concentrated code enforcement within a
through fiscal year 1970 any of the funds
Grant authorizations
reasonable period of time where the property
authorized for fiscal years 1967 and 1968, but
is a owner-occupied residential structure and
which have not been appropriated.
Section 701.-Amends section 4(b) of the
it is in violation of local housing or similar
Advance acquisition of land
Urban Mass Transportation Act of 1964 to au-
thorize an appropriation of $190 million for
codes.
Section 603.-Amends section 701 and re-
fiscal year 1970. In addition, it would increase
Low and moderate income housing in resi-
writes section 704 of the Housing and Urban
the amount of funds which may be usec
dential urban renewal areas
Development Act of 1965 to provide basic
from the current authorization for research
Section 513.-Rewrites section 105(f) of
authority for a more efficient and effective
development and demonstration programs by
the Housing Act of 1949 to require that a ma-
program of Federal assistance to localities
$6 million for fiscal year 1969 and would au
jority of the housing units provided in urban
for the advance acquisition of land expected
thorize the Secretary after fiscal year 1969
renewal projects which are to be redeveloped
to be needed for public purposes. The amend-
to use for research and demonstration ac-
for predominantly residential uses and which
ments and rewriting would:
tivities such funds as he deems appropriate
receive Federal recognition after the effective
(1) Change the definition of eligible land;
from those authorized in section 4(b) of the
date of this bill be standard housing units
(2) Require that the proposed use of the
1964 act.
for low or moderate income families or
land be undertaken within 5 years except
individuals.
the Secretary could go beyond the 5-year
Definition of mass transportation
period if, due to unusual circumstances, he
Section 702.-Amends section 12(c) (5) O
TITLE VI-URBAN PLANNING AND FACILITIES
deems a longer period necessary and if he
the Urban Mass Transportation Act of 196
Comprehensive planning
advised the Banking and Currency Commit-
to broaden the statutory definition of "mas
Section 601.-Rewrites section 701 of the
tees of the Congress of this action;
transportation." The broadened definitio
Housing Act of 1954 (urban planning assist-
(3) Clarify the status of the land in the
would permit greater flexibility in develop
ance). The principal change authorizes the
interim between acquisition and utilization
ing and applying new concepts and system
Secretary of HUD to make planning grants
for the approved purpose;
in urban mass transportation programs.
to State planning agencies for assistance
(4) Permit the Secretary to approve the
Extension of emergency program under th
to district planning agencies for rural and
diversion of the land to another public pur-
Urban Mass Transportation Act
other non-metropolitan areas. A grant
pose when in accord with comprehensive
Section 703.-Amends section 5 of the
authorization of $20 million would be pro-
planning and give him discretion to require
Urban Mass Transportation Act of 1964 to
vided for such planning grants, to be in-
repayment of the grant or the substitution
extend the emergency provisions of the mas
creased by an additional $10 million on
of land of equivalent value when the land
transportation program from November 1
July 1, 1969, both to come out of the
is diverted to a nonpublic purpose;
1968, to July 1, 1970.
regular increase. The Secretary of Agriculture
(5) Provide that assistance under this sec-
would be given certain functions with respect
Non-Federal share of net project cost
tion will not render a project ineligible for
to these district planning grants. The section
other Federal assistance programs and that
Section 704.-Amends sections 4(a) and
also authorizes an additional $10 million of
the ccst of land acquired with this assistance
of the Urban Mass Transportation Act C
the section 701 appropriations to be avail-
will not be an ineligible project cost in such
1964 to permit private transit companies t
able for study, research, and demonstration
other programs;
furnish up to 50 percent of the local share (
projects covering such matters as the plan-
the net project cost of a mass transit projec
ning for entire systems of public facilities
(6) Provide for grant assistance for im-
or in cases of an applicant's (State or loca
and services within metropolitan areas and
puted interest charges when an applicant
uses other than borrowed funds to finance
public body) financial inability to put U
other multijurisdictional regions. Other
changes would authorize the Secretary to
the acquisition of the land; and
any portion of the local share, private con
make planning grants directly to tribal plan-
(7) Clarify the authority of States to par-
panies would be permitted to put up 10
ticipate in the program.
percent of such share.
ning councils or other bodies for planning on
Indian reservations and would require that
Extension of interim planning requirements
TITLE VIII-SECONDARY MORTGAGE MARKET
metropolitan, regional, and district planning
in water and sewer facilities program
Purposes
agencies, to the greatest extent practical, be
Section 604.-Amends section 702(c) of the
Section 801.-States that the purpose
composed of or responsible to elected officials
Housing and Urban Development Act of 1965
this title is to partition the Federal Nation
of local governments. This section also au-
to extend interim planning requirements in
Mortgage Association into two corporation
May 24, 1968
CONGRESSIONAL RECORD - SENATE
6395
(1) Government National Mortgage Associa-
Savings provisions
tions to the Secretary of Agriculture for the
tion (GNMA); and (2) Federal National
Section 809.-Preserves causes of action
cost of carrying out his administrative func-
Mortgage Association (FNMA).
and legal proceedings existing or instituted
tions under sections 235 and 236 of the Na-
Amendments to the Federal National Mort-
by or against the Federal National Mortgage
tional Housing Act.
gage Association Charter Act
Association prior to the effective date SO
Purchase of land for building sites
Section 802.-Amends the Federal National
that such actions and proceedings will not
Section 1004.-Amends section 514(f) (2)
Mortgage Association Charter Act (title III)
abate.
of the Housing Act of 1949 to broaden the
of the National Housing Act to establish-
Transitional provisions
eligibility purposes of domestic farm labor
(a) Government National Mortgage Asso-
Section 810.-Provides that the transitional
housing loans to include the purchase of
ciation:
period would begin on the "effective date"
necessary land for building sites.
Would operate existing special assistance
and terminate when at least one-third of the
TITLE XI-NATIONAL INSURANCE DEVELOPMENT
and management and liquidating functions,
stock is owned by private investors in the
CORPORATION
and
homebuilding, mortgage lending, real estate,
Would be administered by Secretary of
and related industries but no sooner than
Short title
Housing and Urban Development (now un-
May 1, 1970, or later than May 1, 1973. Dur-
Section 1101.-Adds new title to be re-
der FNMA Board of Directors and a Presi-
ing this period the President of the Federal
ferred to as "The National Insurance Devel-
dent).
National Mortgage Association will be ap-
opment Corporation Act of 1968."
(b) Federal National Mortgage Association:
pointed by the President of the United States
Findings and declaration of purpose
Purpose.-Would operate a privately fi-
with the advice and consent of the Senate
and the Board of Directors would be limited
Section 1102.-Includes a finding that the
nanced secondary mortgage market for gov-
to nine members. In the first year all nine
unavailability of property insurance in
ernment supported mortgages.
Board of Directors.-Would consist of 15
members would be appointed by the Secre-
inner-city areas is accelerating the deteriora-
members of which five would be appointed
tary of Housing and Urban Development, in
tion and threatening the economic well-being
annually by the Secretary of Housing and
the second year seven would be appointed by
of cities. States that the purpose of the bill
Urban Development. The remaining mem-
the Secretary and two would be elected by
is to encourage the development of statewide
bers would be elected by the stockholders. Of
the stockholders, and in the third year and
programs to increase the availability of prop-
those members appointed by the Secretary,
subsequent period, five members would be
erty insurance and to provide Federal rein-
one shall be from the homebuilding indus-
appointed by the Secretary and the remainder
surance with appropriate State sharing in
try, one from the real estate industry, and
elected by the stockholders. One of the Sec-
reinsured losses due to civil disorders.
one from the mortgage lending industry.
retary's appointees would have to be the
Amendment of the National Housing Act
Powers of Secretary of Housing and Urban
President of FNMA.
Section 1103.-Adds a: new title XII to the
Development.-Would have regulatory pow-
TITLE IX-NATIONAL HOUSING PARTNERSHIPS
National Housing Act to establish the Na-
ers, including a requirement that a reason-
Sections 901-911-Authorizes the creation
tional Insurance Development Corporation.
able portion of mortgage purchases relate to
of National Housing Partnerships in order to
The provisions of the proposed new title are
low and moderate income housing; also is-
encourage private invéstors to provide low
summarized briefly below.
suance of securities would be subject to his
and moderate income housing in substantial
Creation and dissolution of National Insur-
approval.
volume on a nationwide scale. Such a Na-
and Development
Treasury-held preferred stock.-Would be
tional Partnership would form partnership
Section 1201.-Creates the National In-
retired as rapidly as possible after effective
ventures with local investors for the con-
surance Development Corporation within the
date.
struction of housing for low and moderate
Department of Housing and Urban Develop-
Common stock.-Would continue to re-
income families.
ment, under the authority of the Secretary.
quire mortgage sellers to purchase common
The title would authorize the creation of
Executive director
stock; also each mortgage servicer would be
federally chartered privately funded corpo-
required to hold up 2 percent of mortgages
Section 1202.-Provides that, subject to
rations to be organized under the District of
serviced in common stock.
Columbia Business Corporation Act. Such a
section 1201 the management of the Corpora-
tion shall be vested in an Executive Director
Participations
corporation in turn would form a partner-
Section 803.-Amends section 302(c) of
ship organized under this title and under the
appointed by the President, by and with the
advice and consent of the Senate.
the Federal National Mortgage Association
District of Columbia Uniform Limited Part-
Charter Act to permit GNMA, as trustee un-
nership Act. The federally chartered Corpo-
Advisory Board, meetings, duties, compensa-
der trusts created for sales of participation
ration would serve as the general partner and
tion, and expenses
certificates, to issue such certificates for re-
managing agent of the National Partnership
Section 1203.-Establishes a 19-member
financing purposes without regard to the re-
and each of the stockholders and others
Advisory Board appointed by the Secretary.
quirement of appropriation act authority.
could be limited partners. The Corporation
Definitions
Any appropriation for insufficiencies accom-
would provide the staff and expertise for the
Section 1204.-Contains definitions in this
panying the original authorization would ap-
Partnership in connection with the organiza-
title.
ply as well to any "rollover" sale.
tion and planning of specific local project
undertakings in which the National Partner-
Part A-Statewide Plans To Assure Fair Ac-
Mortgage-backed securities
ship would have an interest.
cess to Insurance Requirements
Section 804.-Amends section 304 of such
TITLE X-RURAL HOUSING
Fair plans
act to authorize the new Federal National
Mortgage Association to issue securities
Housing for low and moderate income
Section 1211.-Requires every insurer re-
persons and families
insured by the Corporation to cooperate with
backed by an earmarked pool of portfolio
Section 1001.-Adds a new section 521 to
the State insurance authority, in each State
mortgages. This section would also authorize
the Government National Mortgage Associa-
title V of the Housing Act to 1949 to author-
in which it acquires reinsurance, in estab-
tion to guarantee such securities as well as
ize the Secretary of Agriculture to make
lishing and carrying out statewide plans to
those issued by approved private issuers.
direct and insured loans with interest-rate
assure fair access to insurance requirements
subsidies in rural areas to low and moderate
("FAIR" Plans). These plans, which must be
Subordinated and convertible obligations
approved by the State insurance authority or
Section 805.-Amends section 304 of such
income persons and families and to provide
authorized by State law, are to be admin-
act to authorize the Federal National Mort-
rental or cooperative housing for such per-
istered under the supervision of the State in-
gage Association to issue subordinated obli-
sons and families where such persons and
surance authority and designed to make es-
gations up to twice its capital and surplus.
families are unable to obtain housing under
sential property insurance more readily
sections 235 and 236 of the National Housing
Special assistance authorization
available in, but not limited to, urban areas.
Act, proposed by sections 101 and 201 of this
Section 806.-Amends section 305(c) of
bill.
All industry placement facility
such act to authorize an additional $500 mil-
Housing for rural trainees
Section 1212.-Requires all plans to in-
lion for the purchase of mortgages by the
Section 1002.-Adds a new section 522 to
clude an all-industry placement facility,
Government National Mortgage Association
title V of the Housing Act of 1949 to author-
doing business with all participating insur-
in its special assistance function.
ize financial and technical assistance to
ers, to help agents and brokers to place in-
Amendments to other laws
States or political subdivisions thereof, or
surance up to the full insurable value of a
any public or private nonprofit organization
property.
Section 807.-Makes numerous changes in
other laws necessitated by the establishment
to provide, in rural areas, housing and re-
Industry cooperation
of the new Federal National Mortgage Asso-
lated facilities for rural trainees (and their
Section 1213.-Requires every participating
ciation and the new Government National
families) enrolled in federally assisted train-
insurer to pledge with the State insurance
Mortgage Association.
ing courses to improve their employment ca-
authority its full participation and cooper-
Effective date
pabilities when the Secretary determines
ation of the plan and the need to form a pool
that such housing and facilities could not be
Section 808.-Provides that the partition
or to adopt other programs to make essential
reasonably provided in any other way.
of the existing Federal National Mortgage
property insurance more readily available.
Association would become effective no more
Appropriations
Plan evaluation
than 120 days following the enactment of
Section 1003.-Amends section 513 of the
Section 1214.-Provides for transmission of
this act.
Housing Act of 1949 to authorize appropria-
copies of plans and amendments by State
S 6396
CONGRESSIONAL RECORD
May 24, 1968
insurance authorities to the Corporation and
izes the Corporation and the Comptroller
Compensation of executive director
for these authorities to advise the Corpora-
General to conduct audits; and provides that
Section 1106.-Provides for compensation
tion with regard to the operation of the plan
the Corporation is to make use of State in-
of the Executive Director at the rate pre-
and the need to form a pool or to adopt other
surance authority examination reports and
scribed for level IV of the Federal Executive
programs to make essential property insur-
facilities to the maximum extent feasible in
Salary Schedule.
ance more readily available. The Corpora-
connection with these activities.
tion may modify plan criteria as may be
Clarifying amendments to acts referring to
Study of reinsurance and other programs
necessary or desirable and upon certification
disasters
by the State insurance authority waive com-
Section 1235.Provides for the Corpora-
Section 1107.-Would amend other acts to
tion to study reinsurance and other means
pliance with one or more of the plan criteria.
include "riot or civil disaster" in the defini-
of assuring an adequate supply of burglary
Part B-Reinsurance Coverage
tions of "disaster" or "catastrophe."
and theft and other property insurance in
Reinsurance of losses from riots or civil
urban areas and the adequate availability of
TITLE XII-NATIONAL FLOOD INSURANCE ACT OF
disorders
surety bonds for construction contractors
1968
Section 1221.-Authorizes the Corporation
in urban areas and to report to the President
Short title
to offer riot or civil disorder property loss re-
and the Congress within 1 year the results
Section 1201.-Adds new title to be referred
insurance to any insurer or pool of insurers
of its study and its recommendations.
to as "National Flood Insurance Act of 1968."
in any one or more States. Reinsurance may
Other studies
Findings and declaration of purpose
be provided immediately upon enactment of
Section 1236.-Provides for the Corpora-
Section 1202.States that a flood insur-
the title for a 90-day period, but thereafter
tion, in cooperation with State insurance
ance program is feasible and can be initiated,
only if the insurer is participating in the
authorities and the private insurance indus-
and should complement and encourage meas-
State's plan under part A.
try, to study the operation of the FAIR plans,
ures to prevent flood damage; that if the
Reinsurance agreements and premiums
the extent of the unavailability of essential
program is commenced on a gradual basis,
Section 1222.-Authorizes the Corporation
property insurance in urban areas, the
time and experience will enable it to be re-
to provide reinsurance, to reimburse the in-
market for private reinsurance, loss-preven-
appraised and expanded; that the program
surer for losses in excess of the insurer's
tion methods and procedures, insurance
can be carried out most effectively through
retention, at premium rates adequate to pro-
marketing methods, and underwriting tech-
a cooperative effort on the part of the Fed-
vide premiums which will exceed in aggregate
niques.
eral Government and the private insurance
amount the insured riot losses in 1967, and
General powers of corporation
industry; and that a critical ingredient of
provides that thereafter the Corporation may
Section 1237.-Authorizes the Corporation
such a program will be the encouragement
adjust reinsurance premium rates as may be
to have a corporate seal, to sue and be sued
of State and local governments to adopt land
necessary or appropriate after consultation
(with all civil actions in which the Corpora-
use regulations to govern the development of
with the Board and the National Association
tion is a party deemed to arise under the
land exposed to flood damage. Calls for the
of Insurance Commissioners.
laws of the United States), to enter into and
President to submit to the Congress, within
Conditions of reinsurance
perform contracts, leases, and other agree-
2 years, a unified national program for flood
Section 1223.Provides the conditions
ments without competitive bidding; to em-
plain management, including any further
under which the Corporation will terminate
ploy a staff; to make necessary or appropri-
proposals for the allocation of costs among
ate rules and regulations; and to exercise all
beneficiaries of flood protection.
existing reinsurance coverage and will not
powers specifically granted by the title and
Amendments to the Federal Flood Insurance
offer new coverage for insurance written
after the termination date, including such
such incidental powers as are necessary to
Act of 1956
carry out its purposes.
conditions as State assumption of a share of
Section 1203(a) -Amends section 15(e) of
Service and facilities of other agencies—
the Federal Flood Insurance Act of 1956.
reinsured losses, the adoption of additional
utilization of personnel, services, facilities,
That section vested the Administrator of the
programs such as pools, and insurer partic-
ipation in State plans and programs.
and information
Housing and Home Finance Agency with au-
thority to borrow $500 million in the aggre-
Recovery of premiums: statute of
Section 1238.-Authorizes the Corporation,
limitations
with the consent of the agency concerned,
gate (or greater sums if authorized by the
to utilize the personnel and information of
President) from the Secretary of the Treas-
Section 1224.-Authorizes the Corporation
any agency of the Federal Government on a
ury. The amendment in section 1203(a) re-
to recover any unpaid premiums for reinsur-
reimbursable basis and to obtain data rele-
lates to the interest formula which is to
ance; imposes a 5-year statute of limitations
vant to matters within its jurisdiction from
apply to borrowed funds. Under section 1210
on the recovery by an insurer of excess pre-
any Federal agency on a nonreimbursable
of the bill, the borrowing authority would
miums paid to the Corporation or the re-
basis to the extent permitted by law.
be made specifically available to the Secre-
covery by the Corporation of reinsurance
tary of Housing and Urban Development to
premiums due to it.
Advance payments and finality of certain
carry out resopnsibilities which would be
financial transactions
Part C-Provisions of General Applicability
vested in him under the bill.
Section 1239.-Provides that the Corpora-
Section 1203(b) -Strikes out obsolete lan-
Claims and judicial review
tion's financial transactions relating to re-
guage from section 15(e) of the Federal Flood
Section 1231.-Authorizes the Corporation
insurance shall be final and conclusive on
Insurance Act of 1956.
to adjust and pay claims for proved and ap-
all officers of the United States and that the
Section 1203(c).-Repeals all sections of
proved losses, and allows a claimant to in-
Corporation may make reinsurance payments
the Federal Flood Insurance Act of 1956, ex-
stittue any action in the U.S. district court
in advance or by way of reimbursement and
cept section 15(e), relating to Treasury bor-
within 1 year after receipt of notice of dis-
in such installments and on such conditions
allowance of a claim.
rowing authority.
as it may determine.
Definitions
Fiscal intermediaries and servicing agents
Taxation
Section 1204.-Defines: (1) "flood" as hav-
Section 1232Authorizes the Corporation
Section 1240.-Exempts the Corporation
ing such meaning as prescribed in regula-
to contract with any insurer, pool, or other
from local, State or Federal taxation and
tions of the Secretary, and including inun-
person or organization for estimating or
provides that any State undertaking meas-
dation from the overflow of streams, rivers,
determining reinsurance claim payment
ures in meeting its obligations for reinsured
or other bodies of waters, and from tidal
amounts, receiving, disbursing, and account-
losses shall not be subject to retaliatory or
surges, abnormally high tidal water, tidal
ing for reinsurance claim payments, audit-
fiscal imposition by any other State.
waves, hurricanes, and other severe storms
ing insurers' records to assure proper pay-
Annual report
or deluge; (2) "United States" and "State"
ments, establishing the basis of reinsurance
Section 1241.-Requires the Secretary to
as including the several States, the District
liability, and otherwise assisting in carrying
out the purposes of the title.
include a report on the operations of the
of Columbia, the territories and possessions,
Corporation in his annual report.
and the Commonwealth of Puerto Rico; (3)
National insurance development fund
"insurance company," "other insurers," "in-
Appropriations
Section 1233.Provides for the establish-
surance agents and brokers,' to include any
ment of a national insurance development
Section 1242.-Authorizes to be appropri-
organizations or individuals authorized to
fund to be available to the Corporation with-
ated such sums as may be necessary to
engage in the insurance business under the
out fiscal year limitation to pay reinsurance
carry out this title.
laws of any State; (4) "insurance adjust-
claims, to pay administrative expenses, and
Financing
ment organizations" to include any organi-
to repay with interest amounts borrowed un-
Section 1104.-Amends section 520(b) of
zations or persons engaged in the business
der section 520(b) of the National Hous-
the National Housing Act to authorize the
of adjusting loss claims arising under insur-
ing Act.
Secretary to borrow funds necessary to pay
ance policies issued by licensed insurance
Records, annual statements, and audits
for reinsured losses under title XII of the act.
companies or other insurers; (5) "person" as
any individual, group of individuals, corpo-
Section 1234.-Requires reinsured insurers
Government Corporation Control Act
ration, partnership, association, or other
to furnish the Corporation with annual state-
Section 1105.-Defines the National In-
organized group, including State and local
ments and such data as may be necessary in
surance Development Corporation as a
governments and agencies; and (6) "Secre-
carrying out this program and to keep rec-
wholly owned Government corporation under
tary" as the Secretary of Housing and Urban
ords to facilitate an effective audit; author-
the Government Corporation Control Act.
Development.
May 24, 1968
CONGRESSIONAL RECORD - SENATE
S6397
Chapter I-The National Flood Insurance
Estimates of premium rates
tions to the Secretary of the Treasury) shall
Program
Section 1208(a) .-Authorizes the Secre-
be vested in the Secretary.
Basic authority
tary, on the basis of studies and investiga-
Section 1210(b) -Requires that borrowed
Section 1205(a) -Authorizes the Secre-
tions, to estimate on an area, subdivision, or
Treasury funds must be deposited in the na-
tary of Housing and Urban Development to
other appropriate basis: (1) Risk premium
tional flood insurance fund established under
establish and carry out a program to facili-
(full cost) rates for flood insurance, (2) the
section 1211.
tate the purchase of flood insurance to pro-
rate (at below full cost, if necessary) which
National flood insurance fund
vide against physical damage to real or per-
would be reasonable, would encourage the
Section .-Authorizes the Secre-
sonal property resulting from flood.
purchase of flood insurance, and would be
tary to establish in the U.S. Treasury a na-
Section that this pro-
consistent with the purposes of the act, and
tional flood insurance fund. Premium equali-
gram shall be implemented to the maximum
(3) the extent to which federally assisted or
zation payments to the insurance pool, rein-
extent practicable, through arrangements for
other flood protection measures initiated
surance claims of the pool, and repayments
financial participation and risk sharing by
after the effective date of the act affect the
of borrowed moneys to the Secretary of the
companies in the private insurance industry,
estimates of rates mentioned in (1) and (2).
Treasury (available from appropriations or
and by other appropriate participation on a
The Secretary will base estimates of risk
reinsurance premiums) will be charged to
non-risk-sharing basis by insurance com-
premium rates on a consideration of the risks
the fund. Administrative expenses of carry-
panies, agents, brokers, or adjustment orga-
involved and accepted actuarial principles.
ing out the program may also be paid out of
nizations.
The rates will reflect applicable operating
the fund.
Scope of program and priorities
costs and allowances of participating private
Section .-Requires the fund to be
insurers, and, on a discretionary basis, non-
Section 1206(a) .-Authorizes the Secretary
developmental Federal administrative ex-
credited with: (1) Borrowed Treasury funds,
to make the flood insurance program avail-
(2) reinsurance premiums payable by the in-
penses which may be incurred in carrying out
able initially for one- to four-family residen-
the flood insurance program.
surance pool, (3) amounts advanced to the
tial properties.
fund from appropriations in order to main-
Section 1206(b) -Authorizes the Secretary
Section 1208(b) -Provides that, in con-
tain it on adequate levels, (4) interest on
to extend coverage of the flood insurance
ducting the necessary rate studies and in-
the investment of surplus amounts in the
program when, on the basis of studies and
vestigations, the Secretary shall, to the ex-
fund, (5) administrative expenses included
other information, he determines that ex-
tent feasible, utilize the services, or a re-
in chargeable premium rates and which have
tension would be feasible. Future coverage of
imbursement basis, of the Army Corps of
been paid to the Secretary, and (6) receipts
the program could be extended to: (1) Other
Engineers, the Geological Survey, the Soil
from other operations incident to the insur-
residential properties, (2) business proper-
Conservation Service, the Environmental
ance program; and, in the event the flood
ties, (3) agricultural properties, (4) proper-
Science Services Administration, the Ten-
insurance program is carried out through
ties occupied by private nonprofit organiza-
nessee Valley Authority, and other appro-
the facilities of the Federal Government, the
tions, and (5) properties owned by State and
priate Federal departments and agencies.
insurance premiums paid.
local governments and agencies thereof.
Section -Requires the Secretary
Section (211(c).-Authorizes the Secre-
Section .-Provides that flood in-
to give priority to those States or areas that
tary of the Treasury to invest surplus moneys
surance will be made available in only those
have evidenced a positive interest in flood
in the fund in obligations issued or guaran-
States or areas (or subdivisions of areas)
insurance, in making rate studies and
teed by the United States, if: (1) All out-
which the Secretary determines had evi-
investigations.
standing obligations have been liquidated,
denced a positive interest in the flood insur-
Establishment of chargeable premium rates
and (2) any outstanding amounts that have
ance program, and had given satisfactory as-
Section 1209(a) -Authorizes the Secretary,
been advanced to the fund from appropria-
surances that by June 30, 1970, permanent
after consultation with the flood insurance
tions for reinsurance payments to the pool
land use and control measures, consistent
advisory committee and representatives of
have been credited to that appropriation,
with criteria prescribed in section 1261, or
the State insurance authorities, to establish
with interest accrued at a rate based on the
for land management and use, have been
chargeable premium rates and the areas,
average current yield on outstanding market-
adopted, and that application and enforce-
terms and conditions for the application of
able obligations of the United States of com-
ment of these measures would commence as
such rates. Rates will be determined on the
parable maturities.
soon as technical information on floodways
basis of estimates made under section 1208
Section 1211(d).-Provides that the fund
and on controlling flood elevations was
and other necessary information.
will be available to finance the operation of
available.
Section 1209(b) .-Provides that, in pre-
the flood insurance program if the Secretary
This would not require the same land
scribing chargeable rates, the Secretary shall
finds that it should, in whole or in part, be
management and use measures for all areas,
be guided by a number of factors, including
carried out through the facilities of the Fed-
since these measures must meet the particu-
the consideration of the respective risks in-
eral Government, including costs incurred in
lar flood problems of each area.
volved, the differences in risk due to land
the adjustment and payment of loss claims
Nature and limitation of insurance coverage
use measures, floodproofing, flood forecasting
and payment of applicable operating costs of
Section 1207 -Authorizes the Secretary,
and similar measures. The Secretary would
private insurers if such companies are in-
after consultation with the flood insurance
be authorized to prescribe chargeable rates
volved. Any premiums paid are to be de-
advisory committee, and representatives of
at reasonable levels, lower than those at full
posited in the fund.
the State insurance commissioners, to pro-
cost where necessary, in order to encourage
Operating costs and allowances
vide by regulation for the general terms and
the purchase of flood insurance. In low-risk
Section -Directs the Secretary to
conditions of insurability applicable to prop-
areas the chargeable rate for existing prop-
erties will be the same or close to the esti-
negotiate with appropriate representatives of
erties eligible for flood insurance. A repre-
mated full cost rate. The higher the flood
the insurance industry, from time to time,
sentative organization of all State insurance
authorities, such as the National Association
risk for an area, the lower the chargeable rate
for the purpose of prescribing a current
would be, in relation to the estimated full-
schedule of operating costs applicable to risk-
of Insurance Commissioners, will be called
upon for purposes of consulting State insur-
cost rate. Under this section, all chargeable
sharing and non-risk-sharing participants
ance authorities. These terms and conditions
rates will be stated so as to reflect their basis,
in the flood insurance program, and a cur-
including any differences from the estimated
rent schedule of operating allowances
will include the types and locations of eli-
full-cost risk premium rates.
(profits) applicable to risk-sharing insurers.
gible properties; the nature and limits of in-
These schedules will be prescribed in regula-
surable losses; the classification, limitation,
Section 1209(c) -Provides that after an
tions.
and rejection of risks; and appropriate mini-
area has been identified as being flood-prone
mum premiums and loss-deductibles.
and this information was published in the
Section 1212(b).-Specifies that operating
Section 1207(b) .-Provides that insurance
area, then newly constructed property or sub-
costs include: (1) Expense reimbursements
stantially improved property can be insured
covering the expenses of selling and servic-
coverage for one- to four-family residential
only at rates which are not less than the
ing the insurance, (2) reasonable compensa-
properties will be limited to $15,000 aggregate
estimated (full cost) risk premium rate.
tion or commissions payable for selling and
liability for any dwelling unit and $30,000 for
any dwelling structure of from two to four
Section 1209(d) -Provides that where any
servicing the insurance, (3) loss adustment
expenses, and (4) other expenses which the
units. Liability for personal property will be
chargeable premium rate is equal to the esti-
Secretary finds were incurred in selling or
limited to $5,000 for the contents of each
mated risk premium rate (full cost) for the
servicing the insurance. Operating allow-
dwelling unit. Both real property and con-
area, and if the rates include any amount for
ances include amounts for profit and con-
tents will be subject to an appropriate loss-
administrative expenses of the Federal Gov-
tingencies which the Secretary finds reason-
deductible clause. For any other properties
ernment in carrying out the flood insurance
able and necessary.
which will become eligible for flood insur-
program (in the Secretary's discretion under
section 1208), a sum equal to that amount is
Payment of claims
ance coverage in the future (such as small
business properties), the aggregate liability
to be paid to the Secretary to be deposited in
Section 1213-Authorizes the Secretary to
the insurance fund.
for any single structure will be $30,000. These
prescribe regulations establishing methods
limits will apply to any insurance sold at
Treasury borrowing authority
for the adjustment and payment of claims
premiums below full actuarial cost. Insurance
for losses to property insured under the flood
Section 1210(a) -Provides that the au-
coverage could be doubled under this section,
thority vested in the Housing and Home Fi-
insurance program.
but any excess over the limits specified will
nance Administrator by section 15(e) of the
Dissemination of flood insurance information
require the payment of premium rates at full
Federal Flood Insurance Act of 1956 (per-
Section 1214.-Directs the Secretary to
cost.
taining to the issue of notes or other obliga-
make information and data available to the
S 6398
CONGRESSIONAL RECORD SENATE
May 24, 1968
public and to any State and local agency re-
Initial program limitations
Premium equalization payments
garding: (1) The coverage and objectives of
Section 1220.-Provides that the face
Section 1234(a).-Directs the Secretary,
the flood insurance program, and (2) esti-
amount of flood insurance coverage out-
on such terms and conditions as he shall
mated and chargeable flood insurance pre-
standing and in force at any given time can-
provide, to make periodic payments to the
mium rates, and the basis for the difference
not exceed $2.5 billion.
pool in recognition of any reduction made in
between such rates.
Report to the President
chargeable premium rates under estimated
Prohibition against certain duplications of
Section 1221.-Directs the Secretary to in-
risk premium rates in order to provide flood
benefits
insurance on reasonable terms.
clude a report on the operations of the flood
Section 1215(a) -Contains provisions
insurance program provided for under this
Section that payments
which will prevent Federal disaster assistance
act in his annual report to the president for
for a share of the claims paid in a given
from being made available to compensate for
submission to the Congress.
period will be based on the aggregate amount
any loss to the extent it is covered by flood
of flood insurance retained by the pool after
insurance. Also provides that no such assist-
Chapter II-Organization and Administra-
ceding reinsurance in accordance with sec-
ance shall be made available to the extent
tion of the Flood Insurance Program
tion 1235.
losses of real or personal property could have
Organization and administration
Subject to the limiting terms and condi-
been covered (at the maximum limits) if
Section 1230.-Directs the Secretary, after
tions of the basic agreement between the
flood insurance was actually available more
such consultation with representatives of
Secretary and the pool under section 1232,
than 1 year prior to the loss. Authority is pro-
the insurance industry as may be necessary,
the Secretary is also authorized to make
vided for the Secretary to prescribe, by regu-
to implement the flood insurance program by
payments to the pool for a proportionate
lations, an exception to this latter provision
providing for an industry program with Fed-
amount of applicable operating costs (in-
for low-income persons who might otherwise
eral financial assistance. In the event this
cluding only administrative expenses) and
benefit from such assistance.
program proves unworkable, the Secretary is
allowances on the sanie ratio basis as used
Section 1215(b) .-Provides that "Federal
directed to provide for a Federal program
to determine the sharing of claim payments.
disaster assistance" includes any Federal fi-
with industry assistance.
Section -Authorizes the Secretary
nancial assistance made available to any per-
Part A-Industry Program With Federal
to establish designated pay periods and the
son as a result of (1) A major disaster, as
Financial Assistance
methods for determining the sum of prem-
determined by the President pursuant to "An
iums paid or payable during such periods.
Act to authorize Federal Assistance to State
Industry flood insurance pool
Reinsurance coverage
and local governments in major disasters,
Section .-Authorizes the Secretary
and for other purposes" (42 U.S.C. 1855-
to encourage and assist private insurers to
Section 1235(a) -Authorizes the Secre-
1855g); (2) a natural disaster, as determined
join together in a pool to provide flood in-
tary to take such action as may be necessary
by the Secretary of Agriculture pursuant to
surance coverage and to participate finan-
to make available reinsurance coverage to
section 321 of the Consolidated Farmers
cially in underwriting the risk assumed and
the insurance pool for excess losses.
Home Administration Act of 1961; (3) a dis-
in assuming responsibility for some propor-
Section 1235(b) -Authorizes entering into
aster with respect to which loans may be
tion of claims for losses.
contracts, agreements or other arrangements
made under section 7(b) of the Small Busi-
Section -Authorizes the Secre-
to provide reinsurance, in consideration of
ness Act.
tary to prescribe rquirements for private in-
premiums, fees, or other charges as the Sec-
Section 1215(c) -Makes the term "finan-
surers participating in the pool, including,
retary finds necessary to cover anticipated
cial assistance" as used in section 10 of the
but not limited to, minimum requirements
losses.
Disaster Relief Act of 1966 (which directs
for capital or surplus or assets.
Section 1235(c) -Authorizes the Secre-
that Federal assistance programs be admin-
Agreements with flood insurance pool
tary to negotiate an excess loss agreement
istered to avoid duplication of benefits) in-
with the insurance industry pool whereby
clude flood insurance.
Section 1232(a) -Authorizes the Secre-
claims above a certain limit will be sub-
State and local land use controls
tary to enter into agreements with any in-
mitted to the Secretary on a portfolio basis,
surance pool as he deems necessary to carry
Section 1216.-Provides that after June 30,
and paid by the Federal Government.
out the purposes of this act.
1970, no new flood insurance coverage (in-
Section 1235(d) -Provides that reinsur-
cluding renewals) will be provided in any
Section 1232(b) -Provides that any agree-
ance claims must be submitted on a port-
ment with a pool shall specify the terms and
area unless an appropriate public body had
folio basis, in accordance with terms and
adopted permanent land use and control
conditions under which: (1) Risk capital
conditions as may be established by the Sec-
measures, with effective enforcement provi-
will be available for the adjustment and pay-
retary.
sions, which the Secretary finds consistent
ment of claims, (2) the pool and its par-
Section 1235(e) -Provides that such pool
with the comprehensive criteria for land
ticipants will participate in premiums re-
shall make no distribution of earnings for a
management and use prescribed under sec-
ceived and profits or losses, (3) the maxi-
period of up to 5 years based on flood insur-
tion 1261.
mum amount of profit which may be re-
ance premiums, unless the aggregate cumula-
alized as established by the Secretary under
Properties in violation of State and local law
tive premiums, fees, or other charges estab-
section 1212, (4) operating costs prescribed
lished for excess loss reinsurance under sub-
Section 1217.-Prohibits any new flood in-
under section 1212 and allowances are to be
section (b) and collected for deposit in the
surance (including renewals) for property
paid, and (5) premium equalization pay-
national flood insurance fund exceeds the
which violates State cr local laws, regulations,
ments and reinsurance claims will be paid.
aggregate cumulative expenses paid for re-
or ordinances which are intended to dis-
Section .-States that the agree-
insurance claims by such fund.
courage or otherwise restrict land develop-
ments will also contain such provisions as
ment or occupancy in flood-prone areas.
Part B-Government Program
the Secretary finds necessary to assure that:
Coordination with other programs
(1) No qualified insurer wishing to parti-
Federal operation of the program
Section 2118.-Directs the Secretary to con-
cipate in the pool will be excluded, (2) in-
Section 1240(a) -Authorizes the Secre-
sult with Federal, State and local agencies
surers participating in the pool will provide
tary, after consultation with representatives
having responsibilities for flood control, flood
continuity of flood insurance coverage, and
of the insurance industry if he makes a de-
forecasting, and flood damage prevention,
(3) other insurance companies, agents, and
termination that the flood insurance program
in order to assure mutual consistency between
brokers will to the maximum extent prac-
cannot be effectively carried on through
the programs of such agencies and the flood
ticable be permitted to cooperate with the
the insurance pool, to take the necessary
insurance program.
pool as fiscal agents or otherwise on a non-
steps to operate the program through the fa-
risk-sharing basis. This section assures that
cilities of the Federal Government, either
Advisory committee
no insurance companies shall be excluded
by: (1) Utilizing insurance companies, other
Section 1219(a) -Directs the Secretary to
from the program on the basis of considera-
insurers, agents, brokers, and adjustment
appoint a flood insurance advisory commit-
tions such as size.
organizations as flscal agents of the United
tee. The purpose of the committee is to ad-
States, (2) by utilizing employees of the De-
vise the Secretary with respect to the ad-
Judicial Review
partment of Housing and Urban Develop-
ministration of this act and in the prepara-
Section 1233.-Authorizes private insurers
ment or other Government employees (by
tion of the regulations prescribed in the act.
participating in the pool to adjust and pay
arrangement with the heads of other agen-
Section 1219(b) -Provides that the com-
claims for losses and permits any claimant,
cies), or (3) by a combination of alternatives
mittee shall consist of not more than 15
upon disallowance of a claim, or upon the
(1) and (2) above.
persons selected from: (1) The insurance
claimant's refusal to accept the amount al-
Section 1240(b) -Provides that at least
industry, (2) State and local governments,
(3) lending institutions, (4) the home-build-
lowed on a claim, to institute an action,
90 days before an all-Federal program of in-
within 1 year after notice of disallowance is
surance is entered into by the Secretary, dur-
ing industry, and (5) the general public.
mailed, in the U.S. district court for the dis-
ing all of which time Congress shall be in
Section 1219(c) -Provides that committee
members, while attending conferences or
trict in which the insured property or the
session, he shall make a report to the Con-
gress which will: (1) State the reasons for
meetings, will be compensated at a rate fixed
major portion of it was situated. Jurisdiction
his determinaton that a program under the
by the Secretary not to exceed $100 a day
would be conferred on the district court
industry-Government option in part A can-
and to also receive travel and living ex-
without regard to the amount in controver-
not be carried out, (2) support such deter-
penses when serving away from their homes
sy. Claimants could also avail themselves of
mination by pertinent findings, (3) indicate
or regular places of business.
legal remedies in State courts.
the extent to which he anticipates the in-
May 24, 1968
CONGRESSIONAL RECORD SENATE
$ 6399
dustry will be utilized in the all-Federal pro-
of any claims arising from the financial
chase of such property. The Secretary is then
gram, and (4) make any other recommenda-
transactions which he is authorized to carry
authorized to transfer such property to those
tions he deems advisable.
out under the act. The Secretary may, how-
State or local agencies agreeing to use the
Adjustment and payment of claims
ever, refer such disputes to arbitration.
property for at least 40 years for those pur-
Section 1241-Authorizes the Secretary to
Section b).-Specifies that this arbi-
poses as the Secretary may, by regulation,
adjust and pay claims, and authorizes any
tration would only be advisory in nature.
determine to be consistent with sound land
claimant, upon disallowance of a claim, or
Records and audit
use and management. This authority is vol-
upon refusal of the claimant to accept an
untary and no property owner would be re-
Section -Provides that any flood
amount allowed, to institute an action, with-
quired to sell or lease his property to the
insurance pool receiving financial assistance
in 1 year after notice of disallowance or par-
Secretary.
under the program, and any pool, company,
tial disallowance, is mailed, in the U.S. dis-
or other private organization which has en-
Chapter IV-Appropriations and miscel-
trict court for the district in which the in-
tered into any contract, agreement, or other
laneous provisions
sured property or the major portion of it was
arrangement with the Secretary under parts
Studies of other natural disasters
situated. Jurisdiction would be conferred on
B and C of chapter II, shall keep such records
Section -Authorizes the Secretary
the district court without regard to the
as the Secretary prescribes. Such records are
to make studies to determine the extent to
amount in controversy.
to fully disclose the total costs of the pro-
which insurance protection against earth-
Part C-Provisions of General Applicability
grams undertaken or services rendered, SO as
quakes or other natural disasters is not
Services by insurance industry
to facilitate an effective audit.
available and the feasibility of making such
Section 1245 -Provides legal authority
Section 1248 -Provides that the Comp-
protection available.
for the Secretary to enter into the necessary
troller General and the Secretary (or their
Section 1270(b) .-Provides that studies
arrangements with the insurance industry to
duly authorized representatives shall have
under this section be made in cooperation
implement the flood insurance program set
access to any books, documents, papers, and
with other Federal, State, or local agencies,
forth in the act, including provisions for pay-
records of the pool, insurance company or
and authorizes the Secretary to enter into
ment of applicable operating costs and allow-
other private organizations, which are perti-
agreements for the conduct of such studies
ances for such facilities and services.
nent to the costs of the prograins set forth
with other Federal agencies, on a reim-
Section -Exempts any such ar-
in this act.
bursement basis, or with State and local
rangements from any provisions of Federal
Chapter III-Coordination of flood insurance
agencies.
law requiring competitive bids or requiring
with land-management programs in flood-
Payments
that contracts or purchases of supplies or
prone areas
Section 1271.-Vests discretion in the Sec-
services by the Federal Government be made
Identification of flood-prone areas
retary to make payments under this pro-
only after advertisement is provided for a
Section 1260.-Authorizes the Secretary,
gram in advance of their actual need, or by
sufficient time to allow competitive proposals
utilizing the Army Corps of Engineers, the
way of reimbursement.
to be made.
Geological Survey, the Soil Conservation
Government Corporation Control Act
Use of insurance pools, companies, or other
Service, the Environmental Science Services
Section 1272.-Makes the provisions of the
private organizations for certain payments
Administration, TVA, and other Federal de-
Government Corporation Control Act ap-
Section 1246(a) .-Authorizes the Secretary
partments and agencies, to identify and pub-
plicable in the administration of the flood
to enter into contracts with any pool, insur-
lish information within 5 years after the
insurance program to the same extent as
ance companies, or other private organiza-
effective date of the act with respect to all
applicable to wholly owned Government cor-
tons he finds acceptable for use as fiscal in-
flood plain areas, including coastal areas in
porations.
termediaries. Such intermediaries could (1)
the United States, which have special flood
Finality of certain financial transactions
estimate and determine amounts of Federal
hazards. The Secretary is also required to
establish within 15 years, flood risk zones in
Section 1273.-Provides that any financial
payments, and (2) audit participating in-
these areas and to make estimates with re-
transaction under this act or payment re-
surers, agents, brokers, or adjustment organi-
ceived or made in connection therein shall
zations, as may be necessary to assure that
spect to the rates of probable flood-caused
loss for the various flood risk zones for each
be final and conclusive upon all officers of
proper payments are made.
the Government.
Section -Provide that any con-
area.
tract may contain provisions necessary to
Criteria for land management and use
Administrative expenses
carry out the Secretary's responsibilities,
Section .--Authorizes the Secretary
Section 1274.Provides that any admin-
under the provisions of the act.
to carry out studies or investigations with
istrative expenses of the Federal Government
Section -Provides that contracts
regard to the adequacy of State and local
in carrying out the fiood insurance program
authorized by this section would be exempted
from any provisions of Federal law requiring
measures in flood-prone areas, as to land
may be paid out of appropriated funds.
competitive bidding or requiring that con-
management and use, flood control, flood
Appropriations
tracts or purchases of supplies or services by
zoning, and flood damage prevention.
Section 1275(a) .-Authorizes the appro-
the Federal Government be made only after
Section --Provides that these
priations necessary to carry out the flood
advertisement is provided for a sufficient
studies and investigations deal with laws,
insurance program, including sums to cover
time to allow competitive proposals to be
regulations or ordinances relating to en-
administrative expenses and to reimburse
made.
croachments and obstructions on stream
the national flood insurance fund for pre-
Section (d).-Requires a finding by
channels and floodways, the orderly develop-
mium equalization payments and reinsur-
the Secretary that the contracting party can
ment and use of flood plains of rivers or
ance claims paid out of the fund.
perform its obligations efficinetly and effec-
streams, floodway encroachment lines or flood
Section 1275(b) -Provides that these
tively before a contract can be entered into.
plain zoning, building codes, building per-
funds shall be available without fiscal year
Section 1246(e).-Provides that the Sec-
mits, and subdivisions or other building
limitation.
retary is authorized to require a safety bond
restrictions.
Effective date
from any organization performing responsi-
Section -Provides that based on
Section 1276.-Provides for the act to be-
bilities under the authority granted and any
his studies and investigation, the Secretary
come effective 120 days following the date
of its officers and employees. No individual
is authorized to develop comprehensive cri-
of enactment, except that the Secretary is
designated to certify payments will be liable
teria designed to encourage, where necessary,
authorized to extend the effective date up
with respect to payments certified by him
the adoption of permanent State or local
to 180 days afer enactment if he finds condi-
in the absence of gross negligence or intent
measures which will lessen the exposure of
tions necessitate a long preparatory period.
to defraud the United States. No officer dis-
property and facilities to flood losses, im-
TITLE XIII-INTERSTATE LAND SALES
bursing funds in accordance with a proper
prove the long-range management and use of
flood-prone areas, and inhibit, to the maxi-
Short title
certification of payments would be liable
with respect to such payments in the absence
mum extent feasible, unplanned and eco-
Section 1301.-Provides that this title may
of gross negligence or intent to defraud the
nomically unjustifiable future development
be cited as "The Interstate Land Sales Full
United States.
in such areas. The Secretary is also author-
Disclosure Act".
Section ).-Specifies that contracts
ized to work closely with and provide any
Definitions
will be automatically renewable from year to
necessary technical assistance to State, inter-
state, and local governmental agencies to en-
Section 1302.-Defines the terms contained
year in the absence of notice from either
party as to termination, except that the
courage the application of such criteria and
in this title.
Secretary may terminate a contract after rea-
the adoption and enforcement of such meas-
Exemptions
sonable notice if he determines that the
ures as may be necessary to help in reducing
Section 1303 .-Provides for specific ex-
other party has substantially failed in its ob-
any unnecessary damages resulting from
emptions from the provisions of the act.
ligations or in carrying them out in a man-
floods.
Section 1303 -Provides that the Sec-
ner inconsistent with the efficient and effec-
Purchase of certain insured properties
retary of HUD may make exemptions from
tive administration of the flood insurance
Section 1262.-Authorizes the Secretary to
any of the provisions of the act if he finds
program.
negotiate with owners of real property cov-
the coverage is not necessary in the public
Settlement and arbitration
ered by flood insurance which are located in
interest and for the protection of purchasers
Section 1247 .-Authorizes the Secretary
any flood-risk area, and damaged substan-
due to the small amount of the offering or
to make final determination and settlement
tially beyond repair by flood, for the pur-
its limited character.
S6400
CONGRESSIONAL RECORD - SENATE
May 24, 1968
Prohibitions relating to the sale or lease of
books and papers of the developer, his agent,
Section 1315(b) -Authorizes the Secretary
lots in subdivisions
or any other person when the matter is
to initiate investigations to determine if any
Section 1304(a).-Makes it unlawful for
relevant to the examination.
person has violated or is about to violate
any developer or agent engaged in inter-
Section any notice re-
the act or rules or regulations prescribed pur-
state commerce (1) to sell or lease any lot
quired under section 1307 to be sent to or
suant to it.
unless a statement of record is in effect pur-
served on the developer or his authorized
Section 1315(c).-Empowers the Secretary
suant to section 1307 and a printed property
agent.
or his designee to administer oaths and af-
report is furnished to each purchaser in ac-
Information required in property report
firmations, subpena witnesses, compel their
cordance with section 1308; (2) to employ
attendance, take evidence, and require the
any device, scheme, or artifice to defraud;
Section 1308(a).-Provides that a property
production of any books, papers, correspond-
to obtain money or property by means of a
report shall contain any information in the
ence, memorandums, or other records rele-
misrepresentation with respect to informa-
statement of record that the Secretary deems
vant or material to an investigation or pro-
tion in the statement of record or the prop-
necessary, as well as any other information
ceeding under the act.
erty report or any other information; or to
prescribed under rules and regulations of the
Sections 1315 (d) and (e) .-Provide for en-
engage in any transaction, practice, or course
Secretary as necessary or appropriate.
forcement of subpenas issued by the Secre-
of business which operates or would operate
Section 1308(b) .-Requires that the prop-
tary in the U.S. district courts and for pro-
as a fraud or deceit on the purchaser.
erty report not be used for any promotional
cedures concerning attendance and testify-
Section 1304(b).-Provides that a pur-
purposes before the statement of record be-
ing at hearings prescribed by the Secretary.
chaser may revoke a contract or agreement of
comes effective and then only if used in its
Administration
purchase if he is not given a copy of the
entirety. States that no person may adver-
property report before or at the time of his
tise or represent that the Secretary approves
Section 1316(a) authority and re-
signing the contract. Where the purchaser
or recommends the subdivision.
sponsibility for administering the act in the
does not receive the property report 48 hours
Cooperation with State authorities
Secretary of Housing and Urban Development
before signing the contract, he may revoke
and gives him authority to delegate any
Section 1309(a) -Provides that the Secre-
it within 48 hours, unless the purchaser read
functions, duties, and powers under the act
tary of Housing and Urban Development
the property report, and inspected the lot
to employees of the Department or to boards
shall cooperate with State authorities re-
to be purchased before signing the contract
of such employees in accordance with the
sponsible for regulating the sale of lots in
and SO stipulates in writing.
provisions of sections 3105, 3344, 3562, and
subdivisions subject to the act. It permits
7521 of title 5 of the United States Code.
Registration of subdivisions
the Secretary to accept for filing under, and
declare effective as a statement of record,
Section 1316(b) -Requires that hearings
Section 1305(a) -Provides that a subdivi-
material filed with and found acceptable by
be public and appropriate records be kept.
sion may be registered by filing a statement
of record with the Secretary meeting the re-
such authorities.
Unlawful representations
quirements of the act and the rules and
Section 1309(b) that nothing in
Section 1317.-Provides that the fact that
regulations prescribed by the Secretary.
the act shall affect the jurisdiction of any
a statement of record has been filed or is in
Section 1305(b) for payment to
State real estate commission.
effect does not constitute a finding by the
the Secretary by the developer of a registra-
Civil liabilities
Secretary of Housing and Urban Development
tion fee not in excess of $1,000 in accordance
Section 1310.-Provides for civil liabilities
that it is true and accurate on its face or
with a schedule to be fixed by regulations
of the Secretary.
against a developer or agent who sells or
that the Secretary has passed on the merits
leases lots in a subdivision in violation of the
or approved a subdivision.
Section 1305(c) -Provides that the filing
of a statement of record or an amendment
provisions of the act.
Penalties
takes place on its receipt accompanied by
Court review of orders
Section 1318.-Establishes penalties for any
payment of the fe provided in subsection
Section any person ag-
person who violates the provisions of the act
(b).
grieved by an order or determination of the
or any rules any regulations issued pursuant
Section 1305(d).-Requires that informa-
Secretary, which was issued after a hearing,
to the provisions of the act. The maximum
tion contained in or filed with a statement
to obtain review in the U.S. court of ap-
penalty is a fine of not more than $5,000 or
of record be available to the public under
peals for the circuit in which the person re-
imprisonment for not more than 5 years, or
regulations prescribed by the Secretary.
sides or has his principal place of business
both.
Information required in statement of record
or in the U.S. Court of Appeals for the Dis-
Rules, regulations, and orders
trict of Columbia.
Section 1306.Provides that the state-
Section 1319.-Authorizes the Secretary of
ment of record shall contain certain infor-
Section Provides that com-
Housing and Urban Development to make,
mation and be accompanied by certain speci-
mencement of proceedings under subsection
issue, amend, and rescind rules, regulations,
fied documents.
(a) will not stay the Secretary's order unless
and orders necessary or appropriate to the
specifically ordered by the court.
exercise of his functions and powers under
Taking effect of statements of record or
amendments thereto
Limitation of actions
the act.
Jurisdiction of offenses and suits
Section 1307(a).-Provides that a state-
Section 1312.-Bars the bringing of an
ment of record, or any amendment, shall take
action to enforce any liability created under
Section 1320.-Provides that the U.S. dis-
effect on the 30th day after filing or at an
section 1310 (a) or (b) (2) unless it is
trict courts and the U.S. District Court for
earlier date if the Secretary SO determines.
brought within 1 year after discovery of the
the District of Columbia shall have jurisdic-
When additional lands are offered for dispo-
untrue statement or the omission or after
tion of offenses and violations under the act
sition, a developer may consolidate the state-
the discovery should have been made. If the
and the rules and regulations prescribed pur-
ment with any prior statement of record of-
action is to enforce a liability established
suant to it. It provides these courts con-
fering subdivided land under the same pro-
under section 1310(b) (1), it must be brought
current jurisdiction with State courts for all
motional plan.
within 2 years after the violation upon which
suits in equity or at law to enforce liabilities
Section 1307 -Provides that the Secre-
it is based. No action under the act may be
or duties created by this act.
tary advise the developer within a reason-
brought more than 3 years after the sale or
Appropriations
able time if the statement is materially de-
lease of the property.
Section 1321.-Authorizes appropriation to
fective. Such notification suspends the effec-
Contrary stipulations void
carry out the purposes of this act.
tive date until 30 days after a corrective
Section 1313.-Provides that any condition,
filing is made. The developer may, however,
Effective date
stipulation, or provision requiring a person
request a hearing which must be held within
to waive compliance with the act, or rules
Section 1322.-Provides that the act shall
20 days of the Secretary's receipt of the
and regulations of the Secretary pursuant to
be effective 180 days after enactment.
request.
it, shall be void.
TITLE XIV-TEN-YEAR HOUSING PROGRAM
Section .-Requires the developer to
file an amendment to a statement if any
Additional remedies
Sections 1401-1404.-Adds new provisions
change occurs subsequent to its effective date
Section 1314.Provides that rights and
to the housing laws requiring the President
remedies under the act are in addition to
to submit a report, not later than January
which affects any material fact required to
be contained in the statement.
other rights and remedies at law or equity.
15, 1969, containing a 10-year plan for the
national housing needs, along with legislative
Section 1307(d) .-Permits the Secretary to
Investigations, injunctions, and prosecution
recommendations for fulfilling these needs.
suspend a statement of record if it appears
of offenses
In addition, these sections require annual
to him that it includes an untrue statement
Section 1315(a) .-Authorizes the Secretary
reports to be made by the President on Jan-
of a material fact or omits to state a ma-
to file suit to prohibit violations of the act or
uary 15, 1970, and on each succeeding year
terial fact required to be stated or necessary
any rule or regulation promulgated pursuant
through 1978 showing the progress made un-
to make the statement not misleading.
to the act in any U.S. district court or in
der the plan and the reasons why, if any, the
Section 1307 (e) -Empowers the Secretary
the U.S. District Court for the District of
goals set forth in the plan have not been
to make an examination to determine
Columbia. The Secretary is also authorized
reached along with estimates of the need for
whether an order should be issued under
to transmit evidence concerning prohibited
the following year. This title also requires a
subsection (d) and allows him to have access
acts or practices to the Attorney General who
final report to be submitted by January 15,
to and demand production of any relative
may institute criminal proceedings.
1979.
May 24, 1968
CONGRESSIONAL RECORD-SENATE
S6401
TITLE XV-MISCELLANEOUS
Additional assistant Secretary for Housing
to the same extent that such work could
Model cities
and Urban Development
now be done with project funds.
Section 1507.-Amends the first sentence
Section section 110(e)
Section 1501.-Amends section 111(a) of
of section 4(a) of the Department of Hous-
of the Housing Act of 1949 to make it clear
the Demonstration Cities and Metropolitan
Development Act of 1966 to authorize an
ing and Urban Development Act to increase
that the restoration of historic properties
appropriation of $1 billion for the model
the number of assistant secretaries for
can be carried out as an urban renewal proj-
such department from five to six.
ect cost for those projects approved for three-
cities program for fiscal year 1970. In addi-
fourths Federal grant assistance on a limited
tion, this section adds an authorization of
International housing
project cost basis.
$12 million for planning assistance and ad-
Section 1508.-Rewrites section 604 of the
Section (d).-Amends section 1101(c)
ministrative expenses for the demonstration
Housing Act of 1957 to clarify authority of
(3) of the National Housing Act to permit
cities program to be made available for fiscal
HUD to: (1) Exchange data on housing and
amortization of the mortgage term under the
year 1969.
urban development with foreign countries;
medical group practice facilities program to
Urban renewal demonstration grant program
(2) employ private citizens to participate in
commence after completion of construction
Section 1502.-Amends section 314(a) of
intergovernmental and international meet-
of the facility rather than at the time the
the Housing Act of 1954 to permit demon-
ings sponsored or attended by HUD; and
mortgage is executed.
stration grants to be made to nonprofit
(3) accept funds and other donations from
Section -Amends section 213(o)
organizations for carrying on demonstration
international organizations, foreign coun-
of the National Housing Act to clarify the
projects and other activities for the preven-
tries, and private foundations in connection
authority of the Secretary to invest all
tion of slum and blight. (Existing law per-
with activities carried on under interna-
moneys, not currently needed for the opera-
mits grants to public bodies only.) This sec-
tional housing programs.
tion of the cooperative management housing
tion provides that such demonstration un-
Low-rent public housing-corporate status
insurance fund, in Government bonds or
dertakings by nonprofit organizations must
Section 1509 (Technical).-Amends sec-
obligations, or in the purchase on the open
be consistent with any plans of a local pub-
market of debentures which are the obli-
tions 3 and 17 of the United States Housing
lic agency. This section also increases the
Act of 1937 to repeal language which is now
gation of the fund.
percentage of the Federal grant from two-
obsolete.
Section section 810(e)
thirds of project cost to 90-percent of project
of the National Housing Act to permit an
cost. This section further increases the
Eligibility for rent supplement payments
individual, who is approved by the Secre-
amount of capital grant funds available for
Section 1510.-Extend eligibility to par-
tary, to be a mortgagor under the FHA sec-
demonstration projects from $10 million to
ticipate in rent supplement program to two
tion 810 housing program for military per-
$20 million.
projects in New York City.
sonnel or employees or personnel of NASA
Authorization for urban information and
Consolidation of the low-rent public housing
or AEC research or development installations.
technical assistance services program
in Washington, D.C.
Home Owners' Loan Act of 1933
Section 1503.-Amends section 906 of the
Section 1511.-Allows the National Capital
Section section 5(c) of
Demonstration Cities and Metropolitan De-
Housing Authority in Washington, D.C., to
the Home Owners' Loan Act of 1933 to au-
velopment Act of 1966 to authorize an appro-
consolidate, pursuant to section 15(6) of the
thorize Federal savings and loan associations
priation of $5 million for fiscal year 1969 and
United States Housing Act of 1937, into its
to invest in time deposits or certificates of
$15 million for fiscal year 1970 to carry out
annual contributions contract for its 8,423
deposit in banks insured by the FDIC under
the purposes of the "Title IX Program" un-
units of low-rent housing under title II of
regulations issued by the Federal Home Loan
der which matching grants are made to States
the District of Columbia Alley Dwelling Act,
Bank Board and also amends section 5(c)
to help them provide urban information and
the operating income and operating expense
to broaden the authority of a Federal savings
technical assistance services to communities
accounts for its 72 units of low-rent housing
and loan association to invest up to 1 percent
of less than 100,000 population.
under title I of such act.
of its assets in loans guaranteed by the
Advances in technology in housing and urban
Urban renewal project in Garden City, Mich.
Agency for International Development to
development
help finance housing projects or home finan-
Section 1512.-Makes local expenditures in
Section 1504.-Amends section 1010(d) of
cing institutions in developing nations out-
construction of the Florence Primary School
side of Latin America.
the Demonstration Cities and Metropolitan
in Garden City, Mich., eligible as a local
Act of 1966 to authorize the appropriation of
Section section 5(c) of
grant-in-aid to the Cherry Hill urban renewal
such money as may be necessary to continue
the Home Owners' Loan Act of 1933 to per-
project in Garden City, Mich.
the advances in technology in housing and
mit a Federal savings and loan association to
urban development programs authorized un-
Urban renewal project in Sacramento, Calif.
make loans for the construction of new
der section 1010. This section would also per-
Section 1513.-Makes local expenditures in
structures related to residential use of the
mit the letting of research contracts for pe-
connection with the construction of a storm
property under the existing exception appli-
riods of up to 4 years instead of the present
drainage stem eligible as a local grant-in-aid
cable to property improvement loans.
authorized 2-year period.
to the Capitol Mall Riverfront urban renewal
Section 1517(c) .--Amends section 5(c) of
project in Sacramento, Calif.
the Home Owners' Loan Act of 1933 to au-
College housing
Section 1505.-Amends title IV of the
Self-help studies
thorize a Federal savings and loan associa-
tion to invest in loans to federally supervised
Housing Act of 1950 by adding to the exist-
Section 1514.-Amends section 207 of the
financial institutions secured by investments
ing college housing 3-percent direct loan pro-
Housing Act of 1961 to permit the Secretary
in which the association has statutory au-
gram a new program of annual grants to
of HUD to include the study of self-help
thority to invest directly.
cover the difference between the average
in construction, rehabilitation, and main-
tenance of housing for low-income persons
Federal Home Loan Bank Act
annual debt service an educational institu-
tion is required to pay on borrowings from
and families in the low-income housing
Section 1518.-Amends section 12 of the
private sources and the average annual debt
demonstration program. Also directs Secre-
Federal Home Loan Bank Act to authorize
service it would be required to pay under the
tary of HUD to make a report to Congress
Federal home loan banks, subject to regula-
3-percent rate presently available under the
within 1 year after date of enactment of this
tions by the Federal Home Loan Bank Board,
direct-loan program. Annual grants with re-
act, setting forth the results of the self-help
to purchase AID-guaranteed housing loans
spect to any project could be contracted to
studies and demonstrations carried out un-
and to sell participations therein to any
be made for periods up to 40 years. The total
der section 207 with such recommendations
blank member.
amount of annual contracts contracted to
as he deems appropriate.
Federal Reserve Act
be made for this interest rate subsidy could
Earthquake study
Section 1519.-Amends section 24 of the
not exceed $10 million and this amount
Section 1515.-Amends section 5 of the
Federal Reserve Act to authorize construc-
would be increased by an additional $10
Southeast Hurricane Disaster Relief Act of
tion loans up to 36 months in length as an
million on July 1, 1969.
1965 to extend the time the Secretary of
exception to the limitation on real estate
Federal-State training programs
HUD is required to report his findings and
loans. (Under existing law, such construc-
Section 1506.-Amends sections 801, 802,
recommendations on earthquake insurance
tion loans may not exceed 24 months.)
and 805 of title VIII of the Housing Act of
from October 31, 1968 to June 30, 1969.
PRIVILEGE OF THE FLOOR
1964 to expand the program to permit grants
Technical amendments
Mr. SPARKMAN. Mr. President, I ask
to States for the training of subprofessional
Section 1516(a) .-Amends section 110(c)
unanimous consent that staff members
as well as professional persons who will be
of the Housing Act of 1949 to make it clear
employed by nonprofit organizations as well
of the Committee on Banking and Cur-
that urban renewal project funds can be
as public organizations in the field of hous-
rency, including the Housing Subcom-
used for "the restoration of acquired prop-
ing and community development. This sec-
perties of historical or architectural value."
mittee thereof, be authorized to be on
tion would also allow grant assistance to be
the floor during the consideration of the
Section 1516(b).-Amends section 110(d)
extended to Guam, American Samoa and the
of the Housing Act of 1949 to make it clear
bill.
Trust Territory of the Pacific in order to
that grant-in-aid credit can be given for
The PRESIDING OFFICER. Without
meet the needs of these areas for training
expenditures by a public body for the con-
objection, it is so ordered.
capable housing and community develop-
struction of foundations and platforms on
Mr. SPARKMAN. Mr. President, on
ment technical and professional personnel.
air rights sites in urban renewal projects
yesterday afternoon, the distinguished
S 6402
CONGRESSIONAL RECORD - SENATE
May 24, 1968
senior from Maine [Mrs. SMITH] asked
thority to give assistance for training
guished Senator has fully answered the
a question and asked that it be answered
and other types of services and counsel-
question. I am happy to respond to the
in the course of the debate. I should like
ing that would help lower income fami-
request of Senator SMITH. I was particu-
to answer the question of the Senator
lies be more responsible homeowners.
larly pleased to have her cosponsor the
from Maine at this time. And if I omit
As the Senator from Maine knows,
National Home Ownership Foundation
anything, I should like the Senator from
several other bills, in addition to S. 1592,
Act inasmuch as she is my senior col-
Illinois [Mr. PERCY] to feel free to prompt
were introduced during the first session
league on the Aeronautical and Space
me.
of the 90th Congress to provide assist-
Committee as well as chairman of the
Mr. President, the senior Senator from
ance toward helping lower income fami-
Republican conference. Her support of
Maine [Mrs. SMITH] asked in the CON-
lies become homeowners. The bills, like
the principles enbodied in S. 1592 has
GRESSIONAL RECORD of yesterday, at page
S. 1592, contained a variety of ways in
meant a great deal to me.
S6293, that I list the portions in the com-
which such housing would be financed.
The spirit of the committee has been
mittee bill, S. 3497, which were adopted
The committee considered all of these
to embrace the principles of S. 1592. In
from S. 1592, a bill introduced by the
matters and developed a committee bill
only one point did we actually fail to
Senator from Illinois [Mr. PERCY], of
which encompasses the best ideas for
achieve one important objective of the
which the Senator from Maine was a co-
homeownership from all the bills sub-
original bill, and this was in the ability
sponsor, as well as list those portions of
mitted. The committee bill uses the es-
of the National Home Ownership Foun-
S. 1592 which were not included in the
tablished FHA mortgage insurance pro-
dation to issue debentures that would be
committee bill.
grams to proniote homeownership
guaranteed by the Federal Government.
Mr. President, I will ask the Senator
rather than giving a nonprofit private
Mr. SPARKMAN. The Senator is cor-
from Illinois to check me on my state-
foundation Federal guarantee backup
rect. The Senator knows that there was
ment if I am incorrect. I said that Mrs.
for obtaining funds with which to pro-
considerable question about it in the
SMITH was a cosponsor of the measure.
mote housing as was proposed in S. 1592.
committee as a whole and downtown-
I believe that every Member on the Re-
That is, we did not authorize the is-
the idea of the Treasury guaranteeing
publican side was a cosponsor, and
suance of debentures guaranteed by the
bonds issued by a private corporation.
there were three Democrats in addi-
United States, backed up by the Treas-
Yet, we said that the program we worked
tion to that. Furthermore, the bill was
ury.
out would give us a chance to try it out,
introduced by 112 Members of the
In considering S. 1592, the committee
and then we could chart the course in
House of Representatives. So it had
was mainly concerned about giving a
the future.
very broad representation. Much of
completely private nonprofit foundation
Mr. PERCY. May I say at that point
S. 1592 is in the committee bill, S. 3497.
a $2 billion bonding authority where the
that no Senator, particularly a freshman
Some Senators on the minority side of
Federal Government would have very
Senator from the minority party, could
the aisle have spoken to me about the
little jurisdiction and supervision over
have been given more time and attention
committee bill, and I said, "Oh, sure,
any of the activities of the Foundation.
on this particular point.
you certainly ought to support it, be-
The committee, did, however, accept the
I recall one afternoon last year in a
cause you are one of the cosponsors."
idea of creating a National Home Owner-
Capitol conference room, when we felt
And that is just about what it amounts
ship Foundation with certain functions
that the whole process of government
to.
for the purpose of providing technical
would slow up because we had SO many
Does the Senator from Illinois wish to
assistance and encouraging local non-
people from downtown tied up-from
be recognized?
profit groups to sponsor housing pro-
HUD, the Federal Reserve, the Treasury,
Mr. PERCY. Mr. President, I should
grams for lower income families. The
and other agencies-to try to work out
like to comment that not only was the
committee bill authorizes an appropria-
this principle.
Senator from New York [Mr. JAVITS]
tion of $10 million for the Foundation to
The committee itself has directed that
exceedingly gracious in working very
carry on its activities.
6 months after the enactment of this bill,
closely with me on this bill, but also I
Since S. 1592 and the several other
we take another look to see whether suf-
believe it very important that the Sen-
proposals before the committee were
ficient money is flowing into the de-
ator from Washington [Mr. MAGNUSON]
aimed toward providing homeownership
pressed rural and slum areas of our
be recognized. He was an original co-
for lower income families, it would be
cities. If we find that mortgage credit is
sponsor, and, of course, is chairman of
very difficult to list all of those portions
not sufficient to do the job then the com-
the Independent Offices Subcommittee
which were included, or not included,
mittee will come back to take another
of the Senate Appropriations Commit-
from S. 1592 and the other bills in the
look, to see how greater capital can be
tee.
committee bill.
created.
Mr. SPARKMAN. The Senator is cor-
Since S. 1592 was introduced by Sen-
rect. I did not name the Democratic
ator PERCY, who is a member of the
But in the meanwhile, I was very
Senators, but I do know that there were
Banking and Currency Committee and
pleased that the principle of partnership
three Democrats. I do recall that Sena-
who supports the committee bill, I invite
and government reinforcement was in-
cluded in the administration request this
tor MAGNUSON was one.
him to elaborate on these remarks, if he
wishes, for the benefit of the Senator
year.
As the Senator from Maine knows, S.
from Maine.
Mr. SPARKMAN. The Senator is cor-
1592 proposes the creation of a National
Personally, I feel that a very refresh-
rect. S. 2700 did not contain that provi-
Home Ownership Foundation which
ing idea was brought to the committee
sion, but the new bill does.
would have the authority to issue $2 bil-
Mr. PERCY. At some point in the fu-
lion worth of federally guaranteed de-
by the proposal of the Senator from Illi-
bentures. The funds raised by the issu-
nois, as embodied in S. 1592. Much of
ture, the need may be SO great and the
ance of these debentures would be
the essence of it was first contained in S.
impact on the budget so great that if
loaned to local "eligible borrowers"-
2700, which the committee reported last
we move ahead with the type of job that
year, and now is contained probably to
must be done we may come back-after
that is, nonprofit corporations and orga-
nizations. In turn, these local organiza-
a greater extent-certainly, the interest
we have had experience with the bill
tions would construct or rehabilitate
subsidy is more in line with what he ad-
and the National Home Ownership Foun-
housing units and sell them to families
vocated-in the present bill.
dation-and give this bonding power to
Again, I am glad to pay tribute to the
the National Home Ownership Founda-
needing housing. When appropriate, an
distinguished Senator and to all those
tion SO that it can issue debentures back-
interest rate subsidy would be given to
the purchaser.
who joined in sponsoring that bill. It is
ed up by the Federal Government.
Funds necessary to provide debt serv-
largely included in the present bill.
I believe we have proceeded in a cau-
ice for the debentures when not paid
Mr. PERCY. Mr. President, will the
tious, prudent manner, and I am fully
back to the National Home Ownership
Senator yield?
satisfied that every consideration has
been given to S. 1592. I believe we could
Foundation by the homeowner receiving
Mr. SPARKMAN. I yield.
have moved ahead faster by giving bond-
the loan and subsidy would be made up
Mr. PERCY. I will be very happy to
ing authority to the Foundation now,
by direct appropriations from the U.S.
study carefully the distinguished Sen-
but I am willing to wait and see whether
Treasury.
ator's statement.
or not we have fulfilled the need in the
S. 1592 also proposed that the Foun-
In quick analysis, from what I have
committee bill and to reassess the situa-
dation would be given very broad au-
heard, it seems to me that the distin-
tion in the future.
Housing
May 24, 1968
CONGRESSIONAL RECORD - SENATE
S 6403
Mr. SPARKMAN. I thank the Senator.
EXCERPTS FROM REMARKS OF SENATOR FUL-
mittee on Housing, April 15, 1960, read in
I appreciate the patience of the Sena-
BRIGHT TO THE SENATE, AUGUST 11, 1966
part, as follows:
tor from New York in waiting for us to
Mr. FULBRIGHT. Mr. President, I congratu-
"The subcommittee recommends
an
conclude these remarks.
late the Senator from Alabama and his col-
amendment of existing law to require the fol-
Mr. JAVITS. Mr. President, first I
leagues on the Banking and Currency Com-
lowing annual report from the President:
should like to state to the Senator from
mittee for their continuing attention to the
At the beginning of each session of the Con-
housing needs of the Nation. For several years
gress, the President shall transmit to the
Alabama that it is I who am indebted to
during my chairmanship of the Banking and
Senate and the House of Representatives a
him. I missed the time allocated to me
Currency Committee, it was my privilege to
report stating, among other things, (1) the
because of a plane difficulty, and hence,
serve under the capable leadership of the
minimum number of housing units which
quite properly, was called on to await my
Senator in his capacity as chairman of the
should be started during the calendar year,
turn. He has been very gracious, and SO
Housing Subcommittee-a position which he
or 2 calendar years following submission of
have Senator PERCY and Senator TOWER
still holds.
the report, in order to be consistent with the
Through these years and through many
program of the President, (2) the manner in
for allowing me to proceed.
prior years, the committee was periodically
which discretion contained in law will be
faced with crises in the homebuilding indus-
used by Federal agencies to achieve this
ECONOMIC POLICIES WHICH AF-
try, because our economy was allocating an
minimum number of starts, and (3) recom-
inadequate quantity of savings to home
mendations for changes in law which may be
FECT THE HOMEBUILDING IN-
mortgage credit. Time after time, the com-
required to enable the achievement of this
DUSTRY
mittee recommended and the Senate passed
minimum number of starts."
bills designed to relieve critical shortages of
This reconmendation was subsequently
Mr. FULBRIGHT. Mr. President, I am
pleased to note that title XIV of S. 3497
mortgage money. Today we are in the midst
expressed in bill form-S. 3379 of 1960-and,
of another such crisis.
in modified form was included in the
requires the President to submit to Con-
I intend to support the committee recom-
omnibus housing bill of 1960-S. 3670, Senate
gress annual reports upon progress in
mendations, and I urge other Senators to do
Report No. 1575. During debate on S. 3670, on
achieving our national goal of "a decent
likewise. I believe that the time has come,
June 16, 1960, the provision to require an
home and a suitable living environment
however, to treat the cause of this recurring
annual housing goal was deleted from the bill
for every American family." This has
ailment rather than to continue ministering
by a vote of 44 to 37. It is interesting to note,
been our goal since the enactment of
doses of aspirin and antihistamines, which
Mr. President, that the proposal for an an-
the Housing Act of 1949.
merely relieve the unpleasant symptoms.
nual housing goal was supported by the late
Mr. President, the drastic curtailment of
President Kennedy, by President Johnson,
The requirements of title XIV are quite
homebuilding-described in the committee
and by Vice President HUMPHREY. In fact, a
similar to a bill which I introduced on
report-is a result of national fiscal and
total of 50 Senators voted for or were an-
August 11, 1966. The purpose of my bill-
monetary policies. But the effects of these
nounced in favor of the proposal, and only
S. 3714, 89th Congress, second session-
policies on homebuilding are never publicly
47 Senators voted or were announced in
was to require public debate of economic
debated until they have been implemented
opposition.
policies which affect the homebuilding
and their damaging effects have begun to
Mr. President, I submit that if section 101
industry.
reverberate throughout the economy. We
of S. 3670 had been enacted into law in 1960,
can no longer afford the waste and sacrifice
we would not today be debating emergency
I support title XIV wholeheartedly,
inevitable in a cycle of boom and bust in
measures to relieve a critical depression in
and I hope that it may result in a na-
homebuilding. Roller coasters are for amuse-
homebuilding. If section 101 had been en-
tional effort to achieve stability and ex-
ment parks and should not be characteristic
acted, the Congress would have deliberated
pansion in the production of housing by
of an economic system capable of relative
the economic plans of the President in 1961,
the thousands of private businessmen
stability.
1962, 1963, 1964, 1965, and 1966 as they spe-
engaged in homebuilding.
Even a cursory review of the effects of fis-
cifically related to the supply of home mort-
Mr. President, I ask unanimous con-
cal and monetary policies over the last 20
gage credit, and there would have been ap-
sent to have printed in the RECORD: First,
years will reveal the circumstances under
propriate action to maintain stability in this
which home mortgage credit will be plentiful
vital economic commodity.
the text of my bill, S. 3714; second, ex-
or will be scarce. Decisions made by the
So far as I know, the need for better plan-
cerpts from my remarks in the Senate
Federal Reserve Board, by the Treasury De-
ning has not attracted attention since 1960.
on August 11, 1966; third, a letter which
partment, by the Bureau of the Budget, by
This is because 1966 is the first crisis year
I wrote to the President of the National
the Department of Housing and Urban De-
since that time-but it will not be the last
Association of Home Builders on Octo-
velopment, and by the Federal Home Loan
such crisis, if we continue to let homebuild-
ber 19, 1966; fourth, an excerpt from the
Bank Board, turn the volume of homebuild-
ing be the primary deflator of an overheated
NAHB statement of policy for 1967; and,
ing up or down like water from a faucet.
economy.
But these policies are never discussed or
fifth, an excerpt from pages 119 and 120
Mr. President, it has been our practice to
debated in specific terms until the home-
rely upon economic policies which periodi-
of the report (No. 1123) of the Senate
building industry is drowning in a sea of
cally victimize the homebuilding industry. I
Committee on Banking and Currency on
tight money and going down for the third
propose that we devise economic policies
S. 3497.
time. The present crisis has been foreseeable
which promise greater stability in allocating
There being no objection, the items
for many months. Each time that the dis-
public and private savings to satisfy the
were ordered to be printed in the REC-
count rate is raised, each time that com-
growing shelter needs of the Nation.
ORD, as follows:
petition for savings causes a rise in yields of-
I considered offering an amendment to the
S. 3714
fered to investors, each time that rates to
pending bill, but have decided instead to in-
borrowers are raised, the ultimate effect upon
Be it enacted by the Senate and House of
troduce a separate bill which may be studied
the supply and price of home mortgage cred-
Representatives of the United States of
prior to the next session of Congress. If
it becomes clearer and more certain. But
America in Congress assembled, That the
there is no evidence of improvement in our
this effect of monetary and fiscal policies is
program of the President as expressed in his
national economic planning in the Economic
never discussed specifically in terms of the
annual message to the Congress shall include
Report of the President next January, the
homebuilding industry.
statements and recommendations concerning
Congress should give prompt attention to the
This unhealthy state of affairs was re-
a residential construction goal. In further-
enactment of appropriate legislation.
cognized by the Committee on Banking and
ance of the realization of this goal the Presi-
dent shall transmit to the Senate and the
Currency in 1960. In that year the commit-
OCTOBER 19, 1966.
tee concluded a 2-year study of home mort-
House of Representatives, after the beginning
Mr. LARRY BLACKMON,
gage credit needs anticipated for the present
of each session of the Congress, but not later
President, National Association of Home
decade. The first recommendation made by
than January 20, a report which shall include
Builders, Washington, D.C.
the following: (1) a statement indicating the
the committee was addressed to the problem
DEAR MR. BLACKMON: Thank you for your
I am discussing. The committee recognized
minimum number of housing units which
letter of October 13 and for your kind re-
should be started during the then current
that fluctuations in home building do not
occur by accident.
marks concerning my support of housing
calendar year, or such year and the next fol-
legislation. I agree with you that action
lowing calendar year, in order to be consist-
The committee realized that these fluctua-
should be taken to relieve the alarming re-
ent with the program of the President, (2) an
tions are foreseeable and are a result of
duction in residential construction, but I am
indication of the manner in which the law
planned monetary and fiscal policies. To
not very hopeful about the prospect for
will be administered by the executive agen-
oversimplify, these policies require home
meaningful action in the near future.
cies to achieve the number of housing units
building to quickly take up the slack when
It seems clear to me that decisions made
specified under clause (1), and (3) any rec-
the economy is sagging, and to take it in
by the Treasury, the Bureau of the Budget,
ommendations for legislative action that the
the neck when the economy is booming.
and the Federal Reserve Board, throughout
President determines are necessary or desira-
Mr. President, we can plan better than we
1966, have been made with knowledge that
ble in order that the construction of such
have been doing, and the time has come for
a reduced volume of homebuilding would
specified number of housing units may be
the Congress to insist upon better planning.
be an inevitable result. In other words, ef-
started.
Recommendations No. 1 of the Subcom-
forts to defiate an overheated economy have
S 6404
CONGRESSIONAL RECORD - SENATE
May 24, 1968
affected homebuilding in greater proportion
This statement and finding by Congress
it stand in adjournment until 12 noon
than other segments of the economy, and
would be in furtherance of the policy de-
on Monday next.
this consequence was foreseeable.
clared in 1949 and would bring it more into
The PRESIDING OFFICER. Without
Unfortunately, these decisions were made
current focus by stressing the need for hous-
without any public debate of their effect
ing goals in the immediate future as well as
objection, it is so ordered.
upon homebuilding, and without any public
for a plan by which they may be brought to
discussion of alternative deflationary ac-
public realization. Such a legislative pro-
tions. The tremendous cost of the war in
nouncement would also be in line with the
THE VIETNAMESE PEACE NEGOTI-
Vietnam-now engaging U.S. forces in a
recent proposal by the President to construct
ATIONS
dimension exceeded in our history only by
6 million federally assisted housing units for
Mr. JAVITS. Mr. President, I speak to-
WW I and WW II-demands reduced eco-
low and moderate income families over the
nomic activity in non-war related pursuits.
next 10 years.
day because I feel a conscientious duty
Otherwise, the value of the dollar would
toward our two Ambassadors in Paris,
Report outlining plan
erode at a faster rate than we are now ex-
Ambassadors Harriman and Vance, with
periencing.
Section 1402 of the bill would require the
Perhaps it would have been wiser to have
President to make a report to Congress on
whom I talked at some length in Paris
or before January 15, 1969, setting forth a
Tuesday night. I promised them I would
imposed general wage and price controls, or
10-year plan covering the period June 30,
make some observations in the Senate
restricted auto production, or deferred high-
1968, to June 30, 1978. This plan would con-
based on our talks.
way construction, the space program, and
public works projects, or to have chosen a
tain the number of units anticipated in both
I have just returned from presiding
combination of these and other alterna-
the Government-assisted and the conven-
over a meeting of the Political Commit-
tives. The fact of the matter is, however,
tional markets for each of the 10 years, to-
tee of the North Atlantic Assembly in
that none of these alternatives were chosen,
gether with a statement of what reduction
and homebuilding is bearing a greater bur-
in substandard units is expected, an estimate
Brussels, and from conferring in Paris
of costs in the various Federal programs for
with Ambassadors Harriman and Vance
den as a result.
I suggest, therfore, that it would be more
legislative action. The report would also in-
about Vietnam negotiations. Also, I had
prudent, and certainly more democratic, to
clude an estimate of residential mortgage
the great privilege of an audience with
discus and debate national economic policies
market needs, including availability and flow
His Holiness Pope Paul who has been
prior to their adoption and implementation.
of mortgage funds, for the coming year, and
such a respected and persuasive advocate
It is for this reason that I introduced S.
such other data and recommendations as are
of peace in Vietnam.
3714, about which we corresponded several
deemed pertinent.
There are certain observations and
months ago.
Periodic reports
recommendations on Vietnam which
Based upon present estimates of the course
Section 1403 of the bill would require an-
these experiences have induced me to
of the war in Vietnam, its demand upon our
nual reports by the President on January 15
economy will not diminish in 1967. Con-
make, and I hope they will be of use to
of each year, which reports would compare
sequently, some hard decisions must be
the results for the previous year with the
my colleagues and to our Nation.
made with respect to continuing efforts to
goals set forth in the plan for that year.
I found a somewhat more sympathetic
maintain national economic stability next
These annual reports would be required to
attitude in Europe regarding the Viet-
year.
give reasons for not meeting objectives, if
nam war. While we were being roundly
If the annual Economic Report to the
that be the case, and would also set forth
condemned before by many, European
Congress were to address itself specifically
any revised objectives as would be necessary,
to prospects for homebuilding as estimated
criticism is being muted. However, I see
together with an estimate of the availability
to be affected by Federal fiscal and monetary
and flow of mortgage funds. The annual re-
no real prospect of material support for
policies, it is possible that courses of action
ports would also provide an analysis of the
our efforts in the war.
might be chosen which would lessen the
monetary and fiscal policies for the coming
There is, however, relief and a sense of
burden upon your industry. If not, oppor-
calendar year required to carry out the ob-
confidence in Europe that a beginning
tunity would have been afforded to face the
jectives of the plan, and could contain such
has been made to attain the peace. In
issue squarely prior to adoption and imple-
further legislative recommendations as
short, there is an attitude of sympathy
mentation of policies predictably depressing
deemed appropriate by the President.
to homebuilding.
in Europe as we carry on the negotia-
Final report
If you are reluctant to support S. 3714 in
tions.
its present form, I would be pleased to re-
Section 1404 of the bill would provide for a
As to the negotiations themselves, our
ceive your recommendations for modifica-
final report by the President on January 15,
negotiators are Ambassadors of the
tion.
1979 showing in detail the success or fail-
highest character and proven skill. They
With best wishes, I am,
ure of the plan and an analysis of the rea-
sons therefor.
are, of course, bound by their brief from
Sincerely yours,
J. W. FULBRIGHT.
The committee believes that there should
Washington and their efforts are sub-
be unification toward national housing ob-
ject to what is happening in the war it-
[Excerpt from NAHB statement of policy
jectives among the several departments and
self so long as it continues. It is about
for 1967]
agencies of the Federal Government. While
this especially that I wish to speak.
the Department of Housing and Urban De-
IV. NATIONAL HOUSING GOALS
For, we must have a clear idea of
velopment is primarily involved in this sub-
what we want to attain to be able to
The events of the past year emphasize the
ject, both the Department of Agriculture and
need for a statement of specific National
the Veterans' Administration have direct con-
attain it. Also, we must be prepared to
Housing Goals to minimize the danger of
tact with the public regarding it. The opera-
hear the other side uttering the abrasive
constant change in the direction of housing
tions of the Federal Reserve Board respecting
words so typical of the Communists. All
without the kind of orderly national debate
the flow of credit and the volume of borrow-
the while, the threat of a walkout hangs
which should precede any major shift in
ings permitted through the Federal Home
over the heads of all, as well as the use
important public policy.
Loan Bank Board, as well as the marketing
of the talks for propaganda purposes.
NAHB will take the lead to establish such
and purchasing prices and policies of the
This is standard operating procedure for
goals and to obtain recognition of them by
Federal National Mortgage Association should
all appropriate Federal, state, and local gov-
not be determined or conducted without a
the Communists. Therefore, we must
view toward achieving some minimum vol-
have a basic concept from which we can-
ernments. We will seek the cooperation of all
groups in home building and residential fi-
ume of housing production consistent with
not depart even though there is always
nance and all others concerned with hous-
the need for both housing and general eco-
the risk that negotiations may break
ing opportunity for all.
nomic stability.
off for a time as a result. At the same
It is the view of the committee that the
time, this concept must be of such a
[Excerpt from S. Rept. 1123 on S. 3497]
stating in definite terms of annual minimum
basic nature that we are prepared to
TITLE XIV-10-YEAR HOUSING PROGRAM
housing goals with this added requirement
face a "moment of truth" with the Gov-
of giving specific reasons in case they are
Declaration of purpose
not met, can do much toward achievement
ernment of South Vietnam when we may
Section 1401 of the bill declares that the
of the volume and stability of housing pro-
feel that we are willing to make peace on
national commitment made in the Housing
duction that is so essential to the orderly
a set of agreed negotiated terms and
Act of 1949 to the goal of "a decent home and
growth of the country.
they may not. That may happen.
a suitable living environment for every Amer-
What we seek, as I understand it, is to
ican family" can best be attained through a
definite plan providing for the effective uti-
ORDER FOR ADJOURNMENT
end the war by transferring the struggle
lization of available resources and capabili-
to the political forum. Also, that we in-
ties existing in both the public and private
Mr. BYRD of West Virginia. Mr. Presi-
tend that the political resolution be on
sectors of the economy over a fixed period
dent, I ask unanimous consent that when
a one-man, one-vote basis. In other
of 10 years.
the Senate completes its business today,
words, the political forum must be gen-
5856
CONGRESSIONAL RECORD - HOUSE
July 1, 1968
Mr. ROGERS of Colorado. Mr. Speak-
gress will toss this $3.5 billion subsidy
I do believe, however, that the bill con-
er, Secretary of Interior Stewart Udall
bill in the "legislative wastebasket."
tains a great deal that is good and use-
was recently scheduled to speak at the
A month ago, the Rules Committee
ful, and that it has benefited greatly
June commencement of my alma mater,
failed to report the legislation to the
from the ideas of the minority. There is
the University of Denver. Senator Ken-
floor of the House, but on June 18 it was
a new emphasis on homeownership for
nedy's tragic death prevented Mr. Udall
reported for consideration on the floor of
lower-income families, improvement in
from going to Denver. He sent, by wire,
the House. Evidently the sponsors are
the rent certificate or leased public hous-
the following eloquent remarks, which
planning on passing this bill in the clos-
ing program, a tightening of provisions
Chancellor Maurice B. Mitchell read to
ing days of the session when, by reason of
requiring residential urban renewal to
the graduates.
absentees and confusion in the final
serve the housing needs of low- and
I include these inspiring words in the
hours they might succeed in passing the
moderate-income Americans, increased
RECORD, as I think they have value for
same and extending the farm subsidy
authorizations for the water and sewer
us all during these difficult times:
through 1970. Every Member should be
program which is of benefit to every con-
MESSAGE FROM STEWART UDALL
on the alert against this contingency.
gressional district in the country, and
(Read by Chancellor Maurice B. Mitchell of
I am herewith enclosing with my re-
renewed efforts at establishing an effec-
University of Denver at Commencement on
marks a letter received from Mr. Charles
tive flood insurance program. All of these
June 7, 1968)
B. Shuman, president of the American
provisions reflect original efforts on the
If ever there was a time I would like to
Farm Bureau Federation. The same
party of the minority, as does the rec-
be with young people, it is now. If ever there
speaks for itself.
ognition by the committee of the need to
was a moment when youth-in a world it did
AMERICAN FARMER BUREAU FEDERATION,
cut through the redtape and bureau-
not make-requires an encouragement of its
Washington, D.C., June 25, 1968.
energies and talents and capacities to remake
cratic delays that so often accompany
Hon. RAY J. MADDEN,
the world, it is now. If ever there was a time
attempts to utilize existing programs.
U.S. House of Representatives,
when tragedy must yield to hope and rea-
To describe some of these efforts, I
Washington, D.C.
son, instead of despair and frustration, it
DEAR CONGRESSMAN MADDEN: The House of
would like to include at this point my
is now.
I can not be with you because Robert F.
Representatives will soon consider H.R. 17126,
supplemental views to the committee re-
Kennedy was a man I loved and whose pro-
a bill to extend the Food and Agriculture Act
port. I would also urge every Member of
fessional and personal life I shared. I had
of 1965 for one year-to December 31, 1970.
this body to carefully study the majority
to be with his family.
Passage of this bill would be unnecessary
and minority views in House Report No.
and unwise.
One searches for words on an occasion
1585. The bill, H.R. 17989, as well as the
when rhetoric itself is totally inadequate.
It is unnecessary to act in 1968. The pres-
report, is of considerable size. It repre-
The opening words of Dickens' A Tale of Two
ent legislation does not expire until Decem-
sents a major undertaking and, despite
Cities have more appropriateness and poig-
ber 31, 1969. Rejection of this bill would per-
nancy than any I could frame: "It was the
mit Congress to develop an alternative pro-
its length and complexity, should have
best of times, it was the worst of time, it was
gram next year.
the fullest consideration that can be
the age of wisdom, it was the age of foolish-
It is unwise to act because the Act of 1965
achieved in an informed debate.
ness, it was the epoch of belief, it was the
is a failure. It has failed:
My supplemental views follow:
epoch of incredulity, it was the season of
To stabilize the food costs of consumers.
SUPPLEMENTAL VIEWS OF REPRESENTATIVE
Light, it was the season of Darkness, it was
To expand farmers' export and domestic
WILLIAM B. WIDNALL TO BANKING AND
markets.
the spring of Hope, it was the winter of
CURRENCY COMMITTEE REPORT ON HOUSING
Despair; we had everything before us, we
To improve-or even maintain-the in-
ACT OF 1968
had nothing before us, we were all going di-
comes of farm families.
In supporting H.R. 17989, I am not unmind-
rect to Heaven, we were all going direct the
The farm parity ratio stood at 81 when the
other way."
Act of 1965 became effective. Now when we
ful of the fact that reasonable men may differ
But these words-as any words-can only
are less than half-way through the third year
over certain provisions, or that new programs
frame a question. The answer which must be
of the program, it stands at 73. Farmers want
authorized or old ones extended by the meas-
something better than to be locked into the
ure are open to constructive criticism relat-
the ultimate victory of reason over madness
is for you-and all youth-to provide. This is
present low-price situation. And, while farm-
ing to conception and execution. On balance,
increasingly your world-both by the
ers have suffered a drop in their prices, the
however, I believe the bill is both necessary
strength of your numbers and the power of
federal government's costs for wheat, feed
and worthwhile. It has benefited from ideas
grain, and cotton programs have steadily in-
and proposals offered by the minority, and I
your concern and commtiment.
creased and now total over $3 billion annu-
think it is appropriate to call particular at-
There is an end to a man's life; there need
to be no end to the things he stood for and
ally.
tention to this fact.
aspired for all men, everywhere. Those
With Congress having passed a 10-percent
Foremost among these minority sugges-
things-to which John F. Kennedy and Mar-
tax increase and a requirement that the
tions has been the concept of fostering on a
tin Luther King and Robert F. Kennedy dedi-
President reduce budgeted expenditures $6
major scale homeownership among low- and
cated their careers, and for which they gave
billion in the next fiscal year, it is incredible
moderate-income citizens. Homeownership
their lives, are in your hands. The power to
that Congress would even consider extend-
as a desirable goal is an idea deeply rooted
ing legislation which has proved to be so
in American tradition. For the low- and mod-
create is greater than the power to destroy.
Indeed, that power is in your hands-and
costly and ineffective.
erate-income citizen, particularly the minor-
hearts.
We respectfully urge you to vote against
ity group citizen, this has become increas-
H.R. 17126.
ingly the impossible dream. Statistics show
Sincerely yours,
that the percentage of existing one-family
FARM SUBSIDY RAID ON U.S.
CHARLES B. SHUMAN,
homes insured by FHA for families with in-
TAXPAYER
comes less than $4,000 fell from 42.8 percent
President.
of the total in 1950 to 1.3 percent in 1966.
(Mr. MADDEN asked and was given
For new homes, the drop was from 56 percent
permission to address the House for 1
to 1 percent in the same period.
minute, to revise and extend his remarks,
THE OMNIBUS HOUSING BILL CON-
In order to reverse this trend, I introduced
and to include extraneous matter.)
TAINS MANY PROPOSALS SPON-
H.R. 8820, the National Home Ownership
Mr. MADDEN. Mr. Speaker, the Agri-
SORED BY THE MINORITY
Foundation Act on April 20, 1967. One hun-
culture Committee of the House of
dred thirteen other House Members, includ-
(Mr. WIDNALL asked and was given
ing eight members of the minority of the
Representatives presented H.R. 17126, a
permission to address the House for 1
Banking and Currency Committee, joined in
bill to extend the Food and Agriculture
minute, to revise and extend his remarks,
offering a similar bill at that time.
Act of 1965 for 1 year.
and to include extraneous matter.)
The proposal had as its basic goals the
Although the pending bill has a year
Mr. WIDNALL. Mr. Speaker, the
enlargement of housing opportunities and
and a half before it expires on December
Housing and Urban Development Act of
choice for our lower income families, both
31, 1969, the recipients of annual sub-
rural and urban. We proposed to tap private
1968 has been voted out of the House
caiptal, private management and technical
sidies to thousands of farmers and farm
Banking and Currency Committee and
experience, and private, community-oriented
corporations all over the Nation are
granted a rule for floor action in the near
initiative. The Government role was to be
pressuring the Congress for another year
future. As I stated in my supplemental
limited to one of stimulus and reinforce-
continuance of this "boondoggle," SO that
views to the committee report, I am not
ment, rather than execution and control.
it can carry through the year 1970.
unaware that reasonable men may differ
FEATURES OF THE NHOF BILL
Evidently these recipients of a "guar-
over certain provisions, or that new or
The National Home Ownership Foundation
anteed annual income" from the Ameri-
old programs deserve careful scrutiny
Act proposal, besides its basic change in
can taxpayers are afraid the next Con-
and constructive criticism.
policy advocating homeownership in contrast
July 1, 1968
CONGRESSIONAL RECORD - HOUSE
5857
to traditional federally assisted renter-
within the American public appear to have
The Secretary is directed to report back
oriented projects, contained a number of
changed the administration's mind. The
within 6 months on his actions. This provi-
innovative features. In summary they were
cumulative result can be seen in H.R. 17989.
sion was secured in the bill despite the ob-
as follows:
In summary, the similarities between the
jections of the Department of Housing and
1. The establishment of the National Home
committee bill and the proposal outlined
Urban Development, objections which, in
Ownership Foundation, a congressionally au-
above are as follows:
turn, persisted, despite the evidence that
thorized nonprofit corporation, with a board
1. The committee bill establishes, In title
such a plan was necessary and capable
of directors drawn from the private sector.
I, section 107, a National Home Ownership
of being established, and despite a favorable
Besides making mortgage capital available,
Foundation. Its purposes follow those sug-
report in the early 1960's, commissioned by
the Foundation was to conduct a technical
gested for the technical assistance service
the Housing and Home Finance Agency, fore-
assistance service to aid in the development
under the minority's NHOF bill of last year.
runner of HUD.
and formation of low- and moderate-income
The Foundation is directed to encourage and
6. The committee bill, in section 405,
homeownership program, including interim
assist public and private bodies at the na-
amends the urban renewal law to permit
planning loans, and the conduct of support-
tional, community, and neighborhood levels
land to be sold to qualified low-income mort-
ing programs in such fields as training, em-
in initiating, developing, and conducting
gagors and nonprofit sponsors of homeown-
ployment, credit counseling, and budget
programs to expand low-income homeowner-
ership program and, by an amendment I of-
management to enable lower income families
ship and housing opportunities. This in-
fered, private homebuilders acquiring land
to assume the privileges and responsibilities
cludes arrangements for technical and man-
for subsequent resale to low- and moderate-
of homeownership.
agerial assistance and training, aid in find-
income home buyers.
2. Authority to the Foundation to raise
ing mortgage financing, insurance, and the
7. By an amendment which I offered, sec-
$2 billion in mortgage loan funds through the
like, encouraging research and innovation,
tion 3 was added to H.R. 17989 which re-
sale of its debentures, guaranteed by the
collecting and distributing information, and
quires, to the greatest extent feasible, the
Federal Government to supplement available
assistance in expanding job opportunities.
employment of lower income residents from
moneys from existing mortgage lending in-
The Foundation may make loans or grants
the area served not only by homeownership
stitutions. The object was to bring together
to cover organizational or administrative ex-
activity but other federally assisted housing
in one coordinated effort, and one pool of
penses for homeownership programs, neces-
projects as well, in jobs created by these
funds, sufficient capital to carry out a major
sary preconstruction costs including land op-
projects. The possibility of the home buyer
lower income homeownership program. It was
tions, architectural fees, and similar items,
contributing his own labor toward the cost
expected that the federally guaranteed bonds,
and the costs of providing counseling to
of his housing has also been recognized in
carrying a market rate of return, would at-
lower income families in budget manage-
section 2 and in title I.
tract new capital, for the mortgage market,
ment, home maintenance, and home man-
CAN HUD CARRY OUT THE PROGRAM?
from such sources as union pension funds.
agement. The bill authorizes $10 million in
3. A market-interest rate mortgage, with a
appropriations.
One of the purposes behind establishing
direct subsidy paid by the Treasury to the
2. The committee bill, in title VII, au-
the National Home Ownership Foundation
holder of the mortgage, thus lowering the in-
thorizes the new Government National Mort-
in the minds of its cosponsors last year, was
terest rate and monthly payments for the
gage Association to guarantee securities is-
to provide a quasi-public alternative to direct
home buyer. The purpose was to avoid the
sued by FNMA or other private issuers,
Federal bureaucratic control by the Depart-
major budget impact that accompanies the
backed by a pool of FHA and VA loans or
ment of Housing and Urban Development.
use of the below-market-interest rate mort-
mortgages. The purpose is the same as that
The sponsors of the NHOF bill were not
gage program involving Federal National
of the NHOF-guaranteed debentures sug-
alone in questioning the capacity or will of
Mortgage Association purchase of these
gested by the minority; namely, to increase
the Department to carry out an expanded
mortgages utilizing special assistance funds.
the supply of mortgage funds and tap new
program of housing for low-in.come citizens.
Thus, each Federal dollar would have a mul-
sources such as pension funds. It is permis-
This presents a considerable challenge to
tiplier effect many times greater than the
sive only, limited in scope, the funds raised
the Department, in carrying out the proposals
authorized in H.R. 17989.
BMIR mortgage purchase dollar, a major ac-
would not be limited to use for lower in-
complishment in a time of expenditure cur-
come homeownership. The Department, in
While the Department's testimony before
tailment. The interest subsidy would be re-
the hearings, admitted to not knowing what
our committee has been reassuring. the con-
paid into a revolving fund, if and as the buy-
amount of additional funds this approach
tinued opposition of HUD to my 1966 amend-
er reached an adequate income level, pre-
might attract.
ment requiring a substantial number of low-
scribed as 70 percent of existing 221 (d) (3)
As a result, it is unlikely that the massive
and moderate-income housing in each pre-
program income limits.
attraction of new funds for lower income
dominently residential urban renewal project
4. Maximum utilization of community-
homeownership envisioned by the sponsors
has had the opposite effect. As the committee
based or neighborhood non profit corpora-
of the National Home Ownership Foundation
report notes, the definition of substantial as
tions, including technical assistance for their
Act last year will occur under this bill. The
only 20 percent of the project units is hardly
development and operation of lower income
FHA insurance provisions in title I also
in keeping with the dramatic need for more
homeownership programs. This would also
depend upon existing lenders and mortgage
and better housing for our underprivileged
provide an opportunity for the prospective
money supply. This makes all the more im-
citizens. The change contemplated by sec-
home buyers in the area to have a voice in
portant the direction in section 107(f) (2) to
tion 413 of this bill increases this percentage
the conduct of the program. It would also
the Foundation to report to the Congress
to 51 or better for the aggregate number of
enlist the aid, expertise, and financial back-
whenever insufficient funding is available for
units in approved projects within a com-
ing of local community leaders in Govern-
lower income homeownership purposes. The
munity; that is, projects which have had
ment, business, labor, civic organizations,
Foundation is also directed to make recom-
their plans approved by the Department, not
the professions and the like, to build a part-
mendations for alternate means of securing
those which are only in the planning stage.
nership within the private sector at the na-
adequate financing.
The new amendment, worked out in conjunc-
tional and local levels.
3. The committee bill, in title VIII, au-
tion with Representative Henry Reuss, of
5. Authority to develop a program of mort-
thorizes the establishment of a private cor-
Wisconsin, as a bipartisan statement of con-
gage equity payment insurance, to protect
poration for profit which is designed to
gressional intent, also contains a 20-percent
the home buyer from losses of income due to
encourage a partnership approach among
minimum aggregate for low-income housing
illness, death, unemployment, and other
interests in the private sector at the na-
suggested by Representative William Brock,
causes not within the home buyer's control.
tional and local level, in order to encourage
of Tennessee. It is perhaps the best example I
To the greatest extend possible, the Founda-
low-income housing. Part of the purpose of
know of in the bill of bipartisan. congres-
tion was directed to work out the program
the National Home Ownership Foundation
sional initiative in the legislative field. Cer-
with the private insurance industry, and re-
authorized by the bill is also to encourage
tainly, all of the other low-cost housing pro-
port back to Congress.
private involvement, including the develop-
grams will come to naught if land or struc-
6. Utilization of the urban renewal pro-
ment of neighborhood organizations inter-
tures are not assembled and made available
gram as a means of obtaining land and build-
ested in homeownership programs, which
at low cost, which is is the major benefit of
ings at reasonable prices to lower the cost of
would involve the citizens themselves from
urban renewal use.
construction, rehabilitation, or the use of
the area. Maximum utilization of area resi-
Two other amendments which I offered
existing housing for the homeownership pro-
dents or the lower income families to be
and which have been accepted in title I de-
gram.
served by the program is not pronounced as
serve mention, if only because of the opposi-
7. Increase employment opportunities and
a major goal in the committee bill, however,
tion by HUD to their inclusion. The first
the use of self-help for area low-income resi-
in contrast to the NHOF proposal last year.
opens the homeownership sections up to
dents and prospective home buyers.
5. By amendment to title I (sec. 109)
utilization of existing housing, as well as
offered by Representative Garry Brown, of
housing involving new construction or sub-
SIMILARITIES WITH THE PRESENT BILL
Michigan, the minority obtained inclusion
stantial rehabilitation. A survey made by my
Although the Department of Housing and
in the bill of an authorization to the Sec-
office among District of Columbia real estate
Urban Development greeted the NHOF pro-
retary of HUD to develop, in cooperation with
agencies indicated the availability of houses
posal last year with skepticism both for its
the private insurance industry, a plan of
selling for under $18,000 and needing little
technical provisions and its goal of lower
insurance to help homeowners meet mort-
repair, if any. It also uncovered the poten-
income homeownership, sufficient support
gage payments in times of personal economic
tial availability of many more renter-oc-
from a variety of groups and individuals
adversity.
cupied houses, which would come on the mar-
5858
CONGRESSIONAL RECORD HOUSE
July 1, 1968
ket if these very same renters had access to
Committee. This in the face of applications
The promise it holds for the future of
mortgage funds. Negro real estate brokers
from needy communities which numbered
human association is due in no small
were particularly conscious of this opportu-
over $4 billion. There is to my knowledge
not a single congressional district that does
measure to President Johnson, whose
nity. The use of existing housing will also
mean, as the U.S. Civil Rights Commission
not have an application for water-and-sewer
faith in such an agreement never fal-
has pointed out, the immediate implementa-
funds and many are most desperate. Under
tered and whose encouragement and
tion of the new homeownership program.
the circumstances, I think the increase I
support provided a constant stimulus
Certainly in this time of tension and trouble
have suggested is most modest and I know
and inspiration over 4 long years of ar-
within our cities, any tool that can provide
it is badly needed.
duous negotiations.
an immediate impact, and thus new hope
NATIONAL FLOOD INSURANCE
The importance of the treaty lies not
to the less fortunate, should be welcomed.
It was with a deep sense of personal satis-
only in the hopeful pause it offers in the
Will the Department of Housing and Urban
faction to me that the Committee on Bank-
reckless race toward nuclear armament.
Development heed this opportunity? Only
ing and Currency adopted my amendment,
time will tell.
It lies equally in its significance as an
Another amendment makes nonprofit
in the form of a proposed title XI, National
example of the ability of humankind to
Flood Insurance.
groups eligible for inclusion in the pro-
Members of the House will recall that the
agree on major issues affecting its wel-
gram for homeownership financing that
wish to use existing housing instead of tak-
proposed national flood insurance legisla-
fare. It is a tribute to reason which SO
tion passed the House-H.R. 11197-and the
often founders when the passions and
ing on the task of rehabilitation in a multi-
Senate in 1967 but because of far-reaching
the ambitions of men are stirred.
unit project. It is my expectation that as
these nonprofit groups, whether church or
changes made by a House floor amendment
The world looks brighter today, despite
labor union, or civic association sponsors,
in the financing mechanism in the House
the turmoil and the turbulence that be-
bill efforts to resolve the differences between
gain in confidence and experience, they will
sets it. The Treaty for the Nonprolifera-
the House and Senate versions in conference
move on to the more demanding but no less
tion of Nuclear Weapons has already
important task of increasing the supply of
have been abandoned. In short, prior to in-
standard housing for homeownership pur-
clusion of title XI in H.R. 17989, most ob-
opened the way to further progress in
servers conceded that flood insurance legis-
the stated willingness of the United
poses.
THE RENT CERTIFICATE PROGRAM
lation had little if any chance of enactment
States and the U.S.S.R. to examine the
in the 90th Congress.
possibility of limitations on strategic nu-
In 1964, I, with other members of the Re-
As an original cosponsor of a national
clear delivery vehicles.
publican minority introduced the rent cer-
flood insurance program, the events leading
tificate plan. It became legislation in 1965,
There is indeed reason to rejoice.
up to the current legislative statement are
and has since made a great record for some-
My congratulations go out to this ad-
indeed regrettable. Within the past month,
thing that was opposed by the administra-
ministration and to the men whose
the State of New Jersey experienced its worst
tion and generally not promoted by them.
natural disaster of the 20th century, sus-
abundant good will, skill, and patience
To date, it has far outstripped its companion
taining more than $150 million in flood dam-
produced this splendid new hope for the
legislation, rent supplements, in terms of
age to private and public property. Having
future of mankind.
people housed, having provided shelter for
personally witnessed the human tragedy and
over 16,000 families while the rent supple-
widescale property damage in the wake of
ment total is just over 2,500. This means
these devastating floods, my belief in the
THE TAX-EXEMPT FOUNDATION: A
that the rent certificate program is respon-
urgency of a national flood insurance pro-
sible for placing over 60,000 people in de-
NEW MAJOR THREAT TO CLEAN
gram was further sustained.
cent, safe, and sanitary housing that they
POLITICS
When the House last November rejected
did not have previously.
the proposed financing through Treasury
The SPEAKER pro tempore (Mr. PAT-
In the present bill there are three sec-
borrowing authority contained in the flood
TEN). Under previous order of the House
tions, 208, 209, and 210 which are perfect-
insurance bill, the circumstances surround-
ing amendments that I introduced to facili-
the gentleman from New York [Mr.
ing that action were far different than those
tate the operation of the program.
ROONEY] is recognized for 60 minutes.
Where the Secretary had previously re-
which prevail today. I refer to title X of the
Mr. ROONEY of New York. Mr.
stricted the program in certain localities to
proposed housing bill where the Congress is
rehabilitated housing, on the completely
being asked to approve Treasury borrowing
Speaker, I want to address you briefly
authority in order to finance a national pro-
on what I consider to be a grave and
unjustified claim that it would cause rents
to rise, section 208 makes clear that he can
gram of riot reinsurance. While I support
largely unnoticed peril to the election
title X, I think it would be uncharacteris-
process in this country. It has to do with
no longer impose such regulations unless
it is specifically SO provided in the act.
tically inconsistent for a majority of the
one of the most delicately sensitive
Where HUD had taken the position that
House of Representatives to support Treasury
areas; namely, the financing of elections.
1t could not use the program unless in quan-
borrowing authority for riot insurance,
Although some Members of the Con-
tities of 10 or more units, section 209 makes
while rejecting this form of financing for a
gress have an income from business or
clear that it can.
national flood insurance program of far more
In section 210, we have acted to enable
modest proportions.
some other profession, most of us think
In this regard, we should keep in mind
of ourselves primarily as politicians. All
tenants to become purchasers of the homes
they occupy through the medium of the
that flood insurance proposals have been
of us are proud to be SO designated. Like
local housing authority. This innovation was
before the Congress for more than 10 years,
medicine and law, politics is a profes-
prompted by spontaneous offers from build-
long before any thought whatsoever was
sion with a sacred trust.
ers in all parts of the country, attracted by
being given to the need for a Federal pro-
I think virtually all Members of the
the economics of the operation, to build for
gram of riot insurance.
Congress want fervently to keep their
leasing purposes.
Stated in its most candid terms, if the
profession clean, to keep it ethical, to
Now where the housing authority deems
Congress of the United States can see its way
clear to underwrite insurance protection
keep it closely responsive to the people,
it advisable, it may include in its lease an
option to purchase to be exercised when de-
against lawlessness in our cities, it can ill
and to keep it operating within certain
sirable in behalf of the tenant.
afford to turn a cold shoulder on the personal
statutory boundaries.
This latter provision could be used even
grief and tragedy of those of our law-abiding,
And that is why I think it important
in multi-family structures where tenants, so
taxpaying citizens who experience huge prop-
to call to your attention what I have
desiring to act, occupy units having more
erty losses caused by floods, or by what are
had to overcome in winning the Demo-
than 80 percent of the total value of the
said to be "acts of God."
cratic renomination in my district. The
structure.
fact that I did win does not lessen my
WATER AND SEWER GRANTS
TREATY FOR NONPROLIFERATION
duty to tell you about a device that was
Section 505 ups the matching sewer and
OF NUCLEAR WEAPONS
used by one of my opponents. For, if the
water grants from $200 million annually to
same device is used extensievly over the
$500 million annually. I do not particularly
(Mr. MORGAN asked and was given
country, I think it will truly endanger
like to increase authorizations beyond de-
permission to address the House for 1
the democratic process by destroying the
partmental recommendations. In the case of
minute and to revise and extend his re-
rules that now govern the financing of
this program, however, I am quite ready to
marks and include extraneous matter.)
elections.
make an exception. This is a vital program.
Mr. MORGAN. Mr. Speaker, this ad-
To put it bluntly-and I address my-
Upon it have depended at times, the question
ministration may well congratulate itself
self personally to every Member of this
of whether or not a city would have to im-
port water for drinking purposes.
upon the tremendous achievement rep-
Congress-unless you are a wealthy per-
The administration has not only given this
resented by the Treaty for the Non-
son or unless you have wealthy support-
program a low priority. It has asked for only
proliferation of Nuclear Weapons. It is
ers who can help you fight back, you
half the funds which Congress authorized
indeed the most significant development
may find yourself in some future elec-
when appearing before the Appropriations
since the advent of nuclear power itself.
tion being overwhelmed by a deluge of
APRIL 5, 1968 / VOLUME 7, NUMBER 6
HERE'S THE ISSUE
Published every other week while Congress is in session by the Legislative Department, Chamber of Commerce of the United States,
Washington, D. C. Subscriptions: $2.50 per year to members of the National Chamber; $3.50 per year to non-members. Rates for multiple
subscriptions or bulk orders available on request. Material in this bulletin may be reproduced with or without credit. Editor: Wallace Davies
The Housing and Urban Development Act
President Johnson, in a Special Message to Congress,
requested in the bill for programs running for one to four
outlined plans for achieving a formidable housing goal-
years beyond fiscal year 1969 are about $10 billion.
the construction of 26.2 million new housing units in the
But bigger Federal spending is only part of the proposal.
next 10 years.
Also included are:
Some perspective on the dimensions of this goal is gained
from the fact that we built only 14.4 million in the last 10
New approaches to the way in which housing-subsidies
are provided for low and moderate income families.
years.
The President's plans were embodied in the Housing and
Additional efforts to tap the resources and skills of
Urban Development Act of 1968 (S. 3029, H. R. 15624).
private industry.
As Congressional hearings opened on this proposal, Robert
In essence, these new approaches and additional efforts
C. Weaver, Secretary of Housing and Urban Development,
are designed to result in 300,000 publicly-financed housing
said:
starts in fiscal 1969-triple the present rate-through (1)
The specific housing and community development pro-
a new program of homeownership; (2) modifications and
gram which we are presenting has many unique features.
extensions of existing Federal programs in rental and co-
But most significant, I believe, is the fact that this total new
operative housing; and (3) the authorization of a National
effort is aimed primarily at achieving a single, specific and
Housing Partnership program, as recommended by the
unified national goal-the building and rebuilding in 10
President's Committee on Urban Housing, chaired by Edgar
years of enough good housing to permit the replacement of
substantially all substandard dwellings.
F. Kaiser. These partnerships, operating on a national scale,
would combine private capital with business and organiza-
As befits such a formidable goal, the bill embodying the
tion skills to construct and operate housing for low and
plans for achieving it is also a formidable document. In-
moderate income families.
cluded in its 154 pages are 11 major titles and 90 sections,
ranging from grants for model cities to urban mass trans-
Homeownership
portation grants to urban planning.
Until now, Federal housing assistance for low and mod-
Important proposals would make changes in the oper-
erate income families has been directed almost entirely to
ations of the Federal National Mortgage Association
rental housing. A limited, experimental program was au-
(FNMA), and remove the statutory six-percent ceiling on
thorized in 1966, which authorizes insured mortgages at
FHA-insured mortgages. Recognition of a market-rate in-
3 percent interest to non-profit organizations for the pur-
terest principle is expected to have beneficial effects
chase and rehabilitation of substandard homes for sub-
throughout the housing industry.
sequent resale, with 3 percent mortgages, to low-income
Much of the bill, however, deals specifically with pro-
families.
posals to stimulate construction and rehabilitation of hous-
This experimental program would be incorporated in a
ing for moderate and low income families.
new section, which, essentially, is designed to promote
Out of the 26 million new housing units envisioned,
homeownership by providing a Federal subsidy for inter-
it is proposed that public assistance be provided for the
est payments.
construction of 4,000,000, compared to 500,000 in the
It is patterned after provisions approved last year by the
last decade.
Senate Banking and Currency Committee, but opposed by
It is also proposed that public assistance be provided
the Administration. This year, the Administration has en-
for the rehabilitation of 2,000,000 existing units in the
dorsed the principle.
It would work, this way:
next decade, compared to 25,000 in the past decade.
A family would pay 20 percent of its monthly income
As usual, part of the stimulation to the new construction
to principal repayment, interest, taxes, insurance and mort-
and rehabilitation of publicly-assisted units is to come from
gage insurance premiums. (In computing the monthly in-
the appropriations of bigger sums.
come, $200 could be deducted for each dependent child.)
It is estimated that appropriations and authorizations
If the 20 percent did not cover the cost of the mortgage
payment, the subsidy would cover enough of the interest
tary of HUD to provide technical assistance 80 percent
cost to result in the home purchaser paying the equivalent
interest free loans for pre-construction costs of non-profit
of one percent interest.
sponsors of low or moderate income housing undertakings.
A mortgage limit of $15,000 ($17,500 in high cost
In explaining the provision, HUD spokesmen said:
areas) would be imposed, except for a family of five or
Much of the Federal housing policy for low and moderate
more persons where the limits could be $17,500 and
family income families has been geared to the use of the
$20,000 respectively.
nonprofit sponsor. However, the experience so far has not
What this could mean specifically is that the average
been satisfactory. Except in rare instances, nonprofit spon-
cost of $125 to $130 a month on a $15,000 mortgage
sors have been lacking in experience and technical capacity
could be brought down to $71 a month.
to develop housing.
The provision of loans to cover
certain preconstruction costs is essential if nonprofit orga-
Unlike the experimental plan, which depends on direct
nizations are to have a significant role in the expanded low
Federal lending from the special assistance funds of Fed-
and moderate income housing program.
eral National Mortgage Association (FNMA) to support
its three percent mortgages, this program will rely on the
Rental Housing
private mortgage market to finance it.
The bill establishes a new program of interest subsidies,
Because the base figure is 20 percent of income, obvious-
similar to the home ownership proposal, which is designed
ly the amount of subsidy will vary according to the income
to aid low and moderate income families in rented or co-
of the homeowner, and could decrease as income rises. The
operative housing.
bill provides that the family's income be recertified every
Under this plan, a non-profit organization or cooperative
two years and appropriate changes be made in the assist-
which operates rental housing would receive subsidies from
ance payment.
the Federal Government for the difference between a one
Assistance under this program will generally be limited
percent interest rate on the money which was borrowed to
to new or substantially rehabilitated housing, although a
construct or rehabilitate housing and the actual interest it
family displaced, for example, as the result of an urban
had to pay to borrow the funds.
renewal project could buy an existing home. Also author-
The subsidy would permit the nonprofit operator to
ized for assistance are those families purchasing their dwell-
charge lower rents. Tenants would pay either a basic rental
ing unit in a rental project.
charge or 25 percent of their average monthly income un-
Liberalization of FHA Requirements. Homeownership
der the plan.
would also be facilitated by making FHA mortgage insur-
The program is intended to replace a present three-
ance available for families who have heretofore been un-
percent loan program, as well as the program of direct
able to meet requirements because of their credit histories
three percent loans for the elderly and the handicapped.
or irregular family income patterns, and by extending FHA
To provide authorization to assist in the construction or
insurance to properties in older declining areas that do not
rehabilitation of about 1.4 million units of rental housing
meet the standards of more stable areas.
for low and moderate income families, $75 million in au-
The HUD Secretary would be authorized to provide
thority is asked prior to July 1, 1969, $125 million, for
counseling services on such things as budgets, debt man-
1970, $150 million for 1971, and $150 million for 1972.
agement to persons who had been turned down previously
Rent Supplements. The bill would make available an
as bad credit risks.
additional $40 million in contract authority for rent supple-
A new "special risk insurance fund," not intended to be
ment payments in fiscal 1970, plus an additional $100 mil-
actuarily sound, would be established to cover the Home-
lion in contract authority in each of the fiscal years 1971,
ownership program, and the credit assistance above, as
1972, and 1973.
well as some parts of the rental and cooperative housing
Under the rent supplement program, the Government
program.
pays the difference between 25 percent of a family's in-
Condominium and Cooperative Ownership. Another
come and the actual cost of rent in a privately-owned
mechanism to permit low and moderate income families to
dwelling.
attain an ownership interest in their dwellings is also pro-
The $340 million in new contract authority, HUD offi-
posed. This plan would allow them to purchase an individ-
cials say, will start the construction or rehabilitation of 2.35
ual family unit in a multi-unit project which has been
million units through fiscal 1973.
constructed with Federal funds at below-market-rate in-
Public Housing. The bill proposes a sharp increase in
terest-if the project is converted into a cooperative or
public housing,over the next five years-to 775,000 units.
condominium. At least a 3 percent down-payment would
Presently, there are now in operation 680,000 units, with
be required, and the purchase could be financed by a 40-
another 55,000 units under construction.
year mortgage, at below-market interest rates.
HUD officials say this authorization is "a key element
Interest-Free Loans. The bill would authorize the Secre-
in the President's program of providing six million low and
moderate income housing units over the next 10 years."
Other changes include: grants to local housing authori-
They say that major emphasis will be placed on produc-
ties to assist them in upgrading their management activities
tion under the Turnkey method, with about half of the
and providing additional tenant services, as well as the
units expected to be so provided.
broadening of existing law to permit local authorities to
Under the Turnkey method, private developers can con-
sell low-rent housing units to tenants in public housing
tract to build housing or rehabilitate property for eventual
developments.
sale to a local housing agency.
Under Turnkey, which cuts red-tape, a low-rent project
National Housing Partnerships
can be constructed in less than half the time traditionally
Administration experts have concluded that one reason
required for public housing. The Turnkey concept is also
why big firms and institutional investors, such as insurance
being extended to permit private industry to manage public
companies and pension funds have shied away from invest-
housing developments, as well as build them.
ment in low and moderate income housing projects is that
The authorization will also be used to lease or buy exist-
a single project is too big a risk.
ing housing, and to provide funds for the extensive mod-
To spread the risk, the President asked Congress to au-
ernization of older, existing public housing.
thorize National Housing Partnerships.
Other Proposals
The bill would authorize an additional $350 million
In addition to the proposals for expanding home
to be earmarked for model cities programs and an addi-
ownership (Title I); rental housing (Title II); and
tional $1.4 billion for fiscal 1970, including funds for
the creation of a National Housing Partnership (Title
future model cities programs.
IX), discussed in this publication, the bill would make
The maximum rehabilitation grant to a low income
many other changes in present housing and urban
homeowner in an urban renewal or code enforcement
development programs. For example:
area would be increased from the present $1,500 to
FHA Insurance Operations. The statutory ceiling on
$2,500, and the three-percent direct loans to rehabilitate
FHA insured mortgages would be removed, and the Sec-
property in such areas would be extended to June 30,
retary of HUD would be authorized to set rates as he
1973. (Title V.)
finds necessary to meet the mortgage market.
Urban Planning and Facilities. The program of supple-
Among other things, the maximum FHA-insured prop-
mental grants for public areas which currently are made
erty improvement loan would be raised from $3,500 to
only in metropolitan areas would be extended to rural
$5,000 and the maximum maturity would be increased
areas and the existing program of comprehensive plan-
from five years to seven years. (Title III.)
ning grants would be extended to State agencies for rural
New Communities. The Secretary of HUD would be
and other non-metropolitan areas. (Title VI.)
authorized to guarantee up to $50 million in bonds, notes,
Mass Transportation. $190 million would be author-
debentures, and other obligations issued by the developer
ized for all mass transportation grants in fiscal 1970 and
who is building an entirely new community. The total
the definition of urban mass transportation would be
authorized amount of the loan guarantees would be $500
broadened to permit grants for a greater variety of ex-
million. (Title IV.)
perimental programs. (Title VII.)
Urban Renewal. Under a new approach, projects, in
FNMA. The Federal National Mortgage Association's
effect, would be divided into annual increments and the
secondary market operations would be transferred to a
Federal commitment at any given time would be limited
Government-chartered private corporation. Two other
to the net costs in the coming year. Under a "Neighbor-
functions of the FNMA-special assistance, and man-
hood Development Program," a community could re-
agement of liquidation, would be reconstituted as the
ceive assistance to carry out urban renewal activities in
Government National Mortgage Association within
one or more urban renewal areas through annual grants
HUD. (Title VIII.)
for two-thirds (or three-fourths in smaller communities
Rural Housing. Direct and indirect insured loans to
and economic redevelopment areas) of the net cost of
low and moderate income families in rural areas which
the year's activities. The principal difference from the
could not otherwise qualify for Federal housing assist-
present system would be that each year the community
ance would be authorized. (Title X.)
would request assistance for specific activities it pro-
Demonstration Projects. Federal payment of the full
posed to carry out that year, rather than having all the
cost of urban renewal demonstration projects is among
funds tied up for a number of years as now happens in
a number of miscellaneous changes in housing law pro-
large projects.
posed in Title XI.
Under the plan, a Federally chartered corporation would
It appears, too, that the annual income eligibility scale
be set up as a limited partnership. Big companies would be
of about $3,800 to $7,200 per family, as approved in
encouraged to invest in the partnership and buy stock in
S. 2700 last year, will prevail, at least in the Senate Com-
the national corporations.
mittee, as compared to the Administration's proposed scale
The National partnership would then become partners
that would subsidize housing for families of five or six
with builders in a "whole host of housing developments"
with annual incomes as high as $10,000.
for low and moderate income families.
The eligibility income scale for homeownership and
The National Partnership would be limited to providing
rental programs continues, in fact, to be one of contro-
25 percent of the equity in any individual project, with the
versy. Despite strong political pressures to include as many
rest coming from the local areas.
people as possible, there is a strong case for concentrat-
Presidential Assistant Joseph Califano has estimated that
ing such Federal programs on the truly low-income seg-
as the depreciation on these projects for income tax pur-
ments of our society, rather than dissipating funds through
poses "passed through" the national partnership back to
a larger range.
the investors, the after-tax return could be from 13 to 20
The Republican members of the Senate Subcommittee
percent on equity.
believe firmly that the upper level of the income scale
Generally Approved
should be lowered as much as possible so that families with
Although there are criticisms of details and mecha-
annual incomes in the $3,000-$5,000 range will benefit
nisms, the principles of home ownership, a bigger role
the most from the rental and home ownership program.
for private industry, and more realistic interest rates are
In a recent speech, Senator Tower of Texas, pointed
being generally approved.
out that subsidizing families with incomes up to $10,000
Especially important is the shift from the principle of
annually would encompass 70 percent of all families. He
direct Federal lending to private enterprise markets.
added:
Harvey G. Hallenbeck, Jr., Secretary of the Chamber's
We should reach out to assist those who but for such
Urban Affairs Committee, reminded the House Housing
assistance could not decently house themselves. We should
Subcommittee that "in the past, Federal efforts to foster
resist the philosophy which urges us to reach out and sub-
better housing frequently took the course of attempting to
sidize higher incomes, and we should demand that hous-
reduce housing prices (monthly mortgages or rentals) by
ing produced with direct Government assistance be de-
establishing artificial interest rates that were below market
voted to true low-income housing. There is no such em-
rates." As a result, the Government had to lend the money
phasis in the Administration's proposals.
directly and then raise it either by taxing or borrowing.
Mr. Hallenbeck also attacked the public housing pro-
He said:
gram on the grounds that the "families whose incomes are
In this way, an elaborate apparatus of transactions and
the very lowest, and who have the least potential for in-
administrative devices is erected through which Govern-
creasing their incomes are being largely ignored.
ment subsidizes housing by, in effect, losing money on its
"The low-rent public housing program, with the changes
lending-and-borrowing and by incurring Government ad-
contemplated in this bill will not meet the housing needs
ministrative costs in developing and managing a mortgage
of the poorest people. It never has met those needs."
portfolio and floating its own issues.
Not only does this system of direct government lending
He recommended that the program be re-directed to
tend "to produce disrupting effects in capital markets,"
meeting these needs.
he emphasized, "it also results in the irregular, off-again,
In a recent talk, Chairman John Sparkman (D-Ala.),
on-again flow of funds that makes planning for the future
of the Senate Banking and Currency Committee, declared:
difficult for builders who want to provide shelter and for
Some people believe the only answer to slums and city
families of modest means who would like to buy or rent
problems is money. They point the finger at Washington
adequate homes."
and the Congress and denounce them for failing to appro-
Problems
priate huge sums of money to save our cities.
Those of you who are familiar with my stand on hous-
General approval of the new approaches does not mean,
ing know how persistently I work for Federal assistance
of course, that there are no problems.
for housing. However, I disagree strongly with the attitude
For one thing, there is the problem of cost at a time
of some who constantly look to the mote in the eyes of
of extreme financial urgency.
Congress rather than to the beam in their own eyes.
As a result, it is considered likely that Congress will
All of the money in the Federal Treasury would not
cut down the proposed five-year authorization to a two-
solve the problems of our cities. I believe that these prob-
or possibly three-year authorization.
lems will only be solved when our nation and all of us
It is also considered likely that the proposed subsidy
are willing to utilize to the fullest extent possible all of our
to bring the interest rate down to one percent for both
available resources.
homeowners and rental housing programs may be limited
One of our biggest resources, he said, is the efficiency
to a two percent rate.
of our private enterprise system.
IN CONGRESS
CONGRESS
including provisions imposing a 10 percent
Members of Congress generally agree
tax surcharge and a mandatory $6 billion
that the President's decision not to seek
reduction in Federal spending.
re-election will have substantial repercus-
Included were changes in Social Security
sions in Congress, but there is less agree-
welfare payments, a two-year extension of the
ment on how it will affect specific bills.
time in which States could decide whether
Although Chairman Wilbur D. Mills (D-
to permit welfare recipients to participate
Ark.) is non-committal, most Members seem to
in the voluntary part of Medicare, a freeze
believe that the President's action coupled
on Federal employment, quotas on certain
with his renewal request for a tax boost may
textile imports, the restoration of a tax
have brightened prospects for that legisla-
exemption for advertising revenues of publi-
tion.
cations issued by non-profit groups, and
House Appropriations Committee Chairman
revocation of a tax exemption for State and
Mahon (D-Tex.), for example, said that a
local industrial bonds, and others.
break in the tax-spending deadlock was prob-
How many, if any, of these amendments
ably in the works anyway and might now come
will survive the conference is debatable;
soon. He, and others, apparently reason that
the House has always proved to be jealous of
as a non-candidate, the President will find
its tax-initiating authority.
it easier to abandon some of his spending
ANNUAL RATE CREDIT
requests, and thus meet Congressional demands
for spending cuts before a tax boost is en-
After months of delay, the
acted.
first meetings of conferees on the Annual
Rate Credit bill (S.5) are now scheduled for
House Speaker McCormack refused to com-
ment on the effect of the President's
April 9-10. The Conference Committee seems
to be somewhat weighted in favor of the more
announcement on specific legislative propos-
severe House version of the bill.
als, but many of the lawmakers obviously
agree with the views of Rep. Patman (D-Tex.),
ANTI-CRIME
who doubts that any further significant act-
The Senate Judiciary Committee is
ions will be taken by the 90th Congress.
expected to order reported the Safe Streets
"Congress is practically over for this ses-
and Crime Control Act (S. 917) within the
sion," he said, "in the belief that the
next few days. The Senate bill includes
legislators will now want to wait and hear
many features not contained in the House-
the views of the new President-elect."
passed bill (H.R. 5037), such as provisions
Senate Majority Leader Mansfield (D-
permitting wiretapping under court orders.
Mont.) said the President's speech opens up
An amendment, offered in Committee by Sen.
the possibility that"we may clean up our
Roman L. Hruska (R-Neb.), to approve a House
program and adjourn around August 1."
provision, which would allocate 90 percent
Most experienced observers believe that
of the funds in block grants to the States,
the net over-all impact will be the passage
was defeated 8-7.
of "must" legislation, such as appropria-
TRAVEL TAX
tions, but that most new proposals involv-
A travel tax proposal (H.R. 16241),
ing large expenditures will remain on the
which is sharply curtailed from the Adminis-
shelf.
tration's request, has been overwhelmingly
TAXES
approved by the House. After debate in which
Although conferees started work immed-
no opposition was voiced, the House voted to
iately, few people were willing to predict
put a 5 percent ticket tax on all overseas
how long it would take them to resolve the
airline flights, similar to the one now
substantial differences in the Senate and
imposed on domestic flights. The bill also
House versions of H.R. 15414. The bill was
reduces from $100 to $10 the amount of duty-
approved by the House as a comparatively
free goods that travelers abroad can bring
simple extension of present excise taxes on
home.
automobiles and telephone services and a
Not included was the Administration's
speedup in corporate income tax payments.
original, and highly-controversial, request
The Senate added more than a dozen tax changes,
that a graduated tax be placed on virtually
all overseas tourists outside the Western
hemisphere who spend more than $7 a day.
OTHER DEVELOPMENTS
A new bill (H.R. 16363) governing in-
The House Judiciary Committee has filed
spection of poultry processing plants has
its. report on a new holiday measure (H.R.
been agreed to by the House Agriculture Com-
15951, McClory, R-I11.). The bill would
mittee. The bill generally follows the
establish Monday observance of four holidays:
principles of the meat inspection law passed
Washington's Birthday, to be observed on the
last year. It would give States two years
third Monday in February; Memorial Day, the
to implement their own inspection systems
last Monday in May; Columbus Day, the second
and exempts intra-state plants doing less
Monday in October; and Veterans' Day, the
than $15,000 business annually.
***
fourth Monday in October.
***
A spokesmen for the National Chamber,
The House Select Subcommittee on Labor
testifying in support of S. 3065, has asked
that the bill be clarified before enactment.
now tentatively plans to start markup sessions
The measure authorizes the Federal Trade Com-
of the Occupational Safety and Health Act
(H.R. 14816) the week of April 8. It is
mission to seek preliminary injunctions a-
reliably reported that the bill will be ex-
gainst any person it believes to be engaged
tensively revised.
in unfair practices against a consumer. The
***
Chamber urged that the bill make clear the
The Agriculture Fair Practices Act (S.
court has unquestioned authority to exercise
109) has gone to the White. House for signa-
"sound discretion" before granting the in-
ture, following approval by the Senate of
junction.
***
House amendments. The bill is designed to
Sen. Ellender (D-La.), Chairman of the
prôtect the right of an agricultural producer
House Agriculture Committee, has taken the
to decide, free from improper pressures,
whether he wishes to belong to a marketing or
unusual step of asking the House to defeat
or modify a bill approved by his Committee.
bargaining association.
***
The bill, S. 1975, forbids the import. of
The Senate Banking and Currency Committee
long-staple cotton from any nation severing
hopes to order reported its omnibus housing
diplomatic relations with the U.S.; i.e.
bill (S. 3029) by the Easter recess, and is
Egypt and the Sudan. Senator Ellender says
scheduled to hold executive sessions on the
the bill is unnecessary.
***
measure on April 8,9, and 10. Observers
doubt that work on the complicated measure
The House Commerce Committee has approv-
can be completed in three days.
ed H. J. Res. 958, providing a $2 million
***
study of the Nation's automobile insurance
A new vocational education bill (H.R.
system. The Senate Commerce Committee has
16460) has been introduced in the House by
also approved a similar bill.... Meanwhile,
the Communications and Power Subcommittee of
Rep. Meeds (D-Wash.) and 35 other House mem-
bers. The bill would boost the Administra-
the House Commerce Committee, has approved
tion's request for $290 million in fiscal
an amended version of the Senate-passed bill,
1969 to $785 million, and provide annual in-
S. 1166, which provides Federal safety regu-
creases to a level of $2 billion by 1972.
lation of natural gas pipelines. The Sub-
The bill contemplates a major overhaul of
committee excluded some 63,000 miles of dis-
vocational education in the Nation's schools,
tribution lines and lessened the proposed
so that every high school graduate would be
penalties for offenses.
***
equipped with a skill.
***
A close battle is expected in the House
Rules Committee over granting a rule for H.R.
16014, which would bring farm laborers under
coverage of the National Labor Relations Act.
***
HERE'S THE ISSUE
The Housing and Urban Development Act
APRIL 5, 1968
DIFFERENCES BETWEEN RENT CERTIFICATE PROGRAM (GOP) &
RENT SUPPLEMENT PROGRAM (DEM.)
There has been considerable confusion between the Rent Supplement Program sponsored
by the Administration and the Republican-sponsored Rent Certificate Program.
The Rent Certificate Program (which makes use of privately-owned, privately-operated,
housing units paying full taxes) is a part of the Public Housing program and is not
only fully funded but already in operation. The Rent Supplement Program has taken
some time to get into operation. Current figures (8/31/68) as to people housed are:
Rent Certificates - 26,000 units (100,000+ people) Rent Supplements - 3,000 units
(10,000+ people).
Basically, the differences between the two programs which point up the advantages
which the Rent Certificate Program has are listed below:
1. The Rent Certificate Program can and is immediately available because it
uses existing housing that is "decent, safe, and sanitary." The Rent
Supplement Program, on the other hand, is one to two years away from full
operation if it achieves that. Even though it is now funded, it cannot
be used to house people now chiefly because its program is restricted to
newly constructed or major rehabilitated housing. It cannot use existing
housing except for the 231 and 202 elderly housing programs which by law
split 5 percent of the authorization although at present (9/1/68) they
account for 60 percent plus of the units that are rent supplemented, all
of which could have been utilized under the Rent Certificate Program at
less cost to both the government and the tenant.
2. The Rent Certificate Program will cost less than either Rent Supplements
or present public housing. Subsidy payments for Rent Certificates are
restricted to that which can be paid for comparable units in the regular
public housing program. Such a limitation was included in the original
Rent Supplement Program, but stricken by Democratic action, because they
knew they could not stay within the bounds set. Also, the Rent Certifi-
cate Program will not carry many of the administrative and construction
costs of the regular public housing program.
3. The Rent Certificate Program will not require the creation of a parallel
bureaucracy as it is specifically tied to the present housing program
and the officials managing it. Rent Supplements will be paid out through
the Federal Housing Administration, which is not set up to screen ap-
plicants and has neither the personnel nor the offices (76 FHA offices
as against over 1,700 local housing authority offices) to operate an
efficient, large program.
4. The Rent Certificate program has a high measure of local control in-
herently and also must be approved by the local governing body of its
area. The Administration is continuously seeking to avoid this control
for Rent Supplements and succeeded in avoiding it in the basic legis-
lation. The Appropriations Committee attached the control as a con-
dition precedent to granting the program funds.
5. Rent Certificate units must be voluntarily offered. Tenant selection
is centered in the owner of the privately operated units. Rent Sup-
plements have something of this, but Lent Supplement tenants will OC-
cupy 90 to 100 percent of their structures. In the Rent Certificate
Program only 10 percent of the available units in all but the smaller
buildings can be used by Rent Certificate tenants, without specific
waiver.
6. The Rent Certificate Program is limited to one to five year leases
that can be renewed. The Rent Supplement Program contracts run ir-
revocably for 40 years. Thus, the Rent Certificates permits a con-
siderable amount of flexibility with which to deal with whatever
experience is encountered. Rent Supplements do not. You contract
for 40 years.
Both the Rent Certificate and the Rent Supplement programs will be paying full taxes
on the quarters subsidized. In either case, this would be more than public housing
pays through its system of Payments In Lieu of Taxes (Pilot).
WILLIAM A. BARRETT, PA., CHAIRMAN
WILLIAM B. WIDNALL, N.J.
LEONOR K. SULLIVAN, MO.
PAUL A. FINO, N.Y.
THOMAS L. ASHLEY, OHIO
FLORENCE P. DWYER, N.J.
WILLIAM S. MOORHEAD, PA.
DEL CLAWSON, CALIF.
ROBERT G. STEPHENS, JR., GA.
HOUSE OF REPRESENTATIVES
GARRY BROWN, MICH.
FERNAND J. ST GERMAIN, R.I.
HENRY B. GONZALEZ, TEX.
J. J. MCEWAN, JR., STAFF DIRECTOR
HENRY S. REUSS, WIS.
KENNETH W. BURROWS
SUBCOMMITTEE ON HOUSING
DEPUTY STAFF DIRECTOR
OF THE
CASEY IRELAND
MINORITY STAFF MEMBER
COMMITTEE ON BANKING AND CURRENCY
NINETIETH CONGRESS
WASHINGTON, D.C.
23 September 1968
CONFIDENTIAL
TO: The Honorable William B. Widnall
FROM: Casey Ireland, Minority Staff Member
RE: Presidential Instructions to HUD to More Than Double
Production of Low Income (Public Housing) Units.
In 1964, Congress raised the annual subsidy level at which
public housing could be supported from $336 million to $366 mil-
lion, authorising an additional 37,500 housing starts. In 1965,
it increased the support level by $188 million to $554 million,
supposedly providing the HAA with an additional capability of
60,000 more units annually for the ensuing four years.
Despite this, the annual number of units placed under manage-
ment rocked along at approximately 30,000. It has been at this
figure - a little above it or a little below - for years. Present
support payments have only recently gone above $200 million. so
despite the Administration's citation of figures proving the need
for the program, their production to meet this need remained at
just about what it had been during the Eisenhover years. Then....
On September 12, 1967, Secretary Robert C. Neaver of HUD and Presi-
dential Special Assistant Joseph A. Califano held a press confer-
ence in the press secretary's office in the White House.
Mr. Califano opened the conference by saying:
"Early in August the President asked Secretary Neaver to
see if he could double the number of low income housing units
that would be available for occupancy in the next year. Secre-
tary Weaver has been working on this for the past several weeks.
He reported to the President that he would be able to achieve
this."
-continued-
- 2 -
Secretary Weaver continued, saying:
"That means whereas currently we are producing some 35,000
such units annually, we will be able to produce 70,000 units for
the next 12 months. Translated into people, that means increas-
ing the mumber of low income families housed from 150,000 to
about 300,000."
I am attaching a full copy of the published transcript of
that conference which centains the above quotes. Further on,
on page two, you will note a passing reference to "our leasing
program" which you first proposed as legislation in 1964 and
which was adopted by the Congress in 1965 despite HUD's bitter
opposition. (The latter can be found together with your rebuttal
on pages 210-211, and 217 of the 1964 Housing hearings of the
House of Representatives.)
The Housing Acts of 1964 and 1965 increased the authorise-
tion subsidy for public housing sufficiently so that HUD esti-
mated that the Department would be able to preduce 277,500 more
units for addition to the program. (The authorisation is expressed
in dollars in the law, but the Department publicly speaks of
units.) The dollar increases were $30,250,000 by the Housing
Act of 1964 and $188,000,000 by the Housing Act of 1965.
Despite these large contract authorizations in the two years
mentioned, the units placed under management-those available for
occupancy-still hovered,aprevioualy stated, at around the 30,000
figure annually. The new contract authority, HUD said, would -
able the Department to produce at twice the level previously. It
never came cless.
I believe the MID press conference of a year age was called
to cover up the Department's failure to raise production after
being authorized to do so. Not having reached their announced
goals, and no longer being able to blame Congress for refusing to
increase an authorization they had been unable to implement, HUD
used publicity to cover up their production failure and to propare
the way for its 1968 request for even a greater authorization.
-continued
- 3 -
Since they had to strain mightily to produce 35,000 units
in the 12 month period prior to the press conference, the
question arose as to just how in a year's time they expected to
double to an annual production of 70,000. The following quote
from page 7 of the transcript of the press conference indicates
their publicised thinking:
"Secretary Neaver: No. we don't know. I can tell you that
the vast majority will be in new construction. Maybe 10 or 15 per-
cent will be rehabilitation and about 10 percent leasing, roughly.
'Q. And the new construction will be mostly Turnkey?
'Secretary Weaver: Yes."
Stange as it some, the Administration, although it is a
little past a year in time from the announcement of its press
conference, is close to realizing its goal. Its "turnkey" opera-
tion has not, however, been the answer as the Secretary predicted
it would be.
What has turned the trick for them - they have presently
bagged about 62,500 of the 70,000 unit goal - has been the scerned
(because it was a GOP proposed innovation) rent certificate leas-
ing program. Their normal annual preduction has rocked along as
usual, roughly the 30,000 unit level. The leasing program, how-
ever, has shot up into the high 20 thousand level and continues
to grow in popularity. The balance is accounted for by acquisi-
tions of existing structures and projects, an implementation of
the leasing program's principle of using existing housing.
I am bringing this to your attention because of my consider-
able suspicion that the Administration intends to call public at-
tention to its "momentous" achievement as soon as the goal of
70,000 units is reached. I further suspect that they will at-
tempt to make use of it in the campaign. The foregoing facts are
made available for you for such rebuttal as you may wish to make.
-continued-
- 4 -
The point simply is that the Administration was able to
reach the goal it did, not through redoubling its efforts, but
through the use of a program which you and the GOP minority
originally proposed, which they fought in 1964, add which was
enacted in 1965 at the same time as the much touted rent supple-
ment program. Today, the rent certificate-leasing program is
sheltering over 100,000 people in its 26,000+ units, and is mere
than eight times as large as the rent supplements' 3,000+ units.
It is also giving about ten times as many people decent, safe,
and sanitary homes.
I am sending a copy of this memorandum to Don Webster, who
is on the staff of former Vice President Mixon's Key Issues Com-
mittee, operating here in Washington, against the possibility
that the matter may enter into the National Campaign.
As a final note, the level of subsidy at which public hous-
ing can now be supported has been raised by the 1968 Housing Act
from $554 million 250 thousand, to $954 million 250 thousand -
a $400 million increase. Present payment amounts to $350 million
annually. At present rates of progress, it could be a long time
before HUD needs to come back for additional authorisation, even
though most of the authorization is eaten up by inflation and the
inability of the agency to really produce. The $400 million in-
crease referred to above should produce-at present costa-150,000
homes. BUT WHEN?
FOR IMMEDIATE RELEASE
SEPTEMBER 12, 1967
OFFICE OF THE WHITE HOUSE PRESS SECRETARY
THE WHITE HOUSE
PRESS CONFERENCE OF HON. ROBERT
p50mg
C. WEAVER, SECRETARY, HOUSING AND
cut
URBAN DEVELOPMENT; AND JOSEPH
A. CALIFANO, JR., SPECIAL ASSISTANT
TO THE PRESIDENT
THE PRESS SECRETARY'S OFFICE
AT 12:35 P.M. EDT
MR. CALIFANO: The President met this morning for
about 30 minutes with Secretary of Housing and Urban Develop-
ment Weaver.
Early in August the President asked Secretary
Weaver to see if he could double the number of low income
housing units that would be available for occupancy in the
next year. Secretary Weaver has been working on this for the
past several weeks. He reported to the President that he would
be able to achieve this.
I will let the Secretary take over and tell you
what he is going to do.
SECRETARY WEAVER: By revising our procedures,
we will be able -- as the President requested -- to double the
number of low rent housing units that will be occupied by
families over the next 12 months.
That means whereas currently we are producing some
35,000 such units annually, we will be able to produce 70,000
units for the next 12 months. Translated into people, that
means increasing the number of low income families housed
from 150,000 to about 300,000.
This is a continuation of the effort which we started
some time ago -- again at the President's request -- in order
to make changes, to upgrade, and to make more effective and
efficient the public housing program.
First, there was the Turnkey approach to construc-
tion. As you know, this is the approach which involves a
private bidder who acquires a site, and does the planning in
accordance with the requirements of the local housing authority.
He hires the architect, completes the building, and turns the
key over to the local housing authority when the building is
complete. This effects great savings in time -- cutting time
sometimes over more than a half and also gives significant
economies in cost.
Second, a fortnight ago we announced --- at the
President's request -- the utilization of private management
in operation of the projects which are being built under the
Turnkey method in public housing.
MORE
- 2 -
Finally, we have a revision of priorities in the
processing of these projects. Briefly, what we are going to
do is this:
First, we are having every local housing authority
look at its inventory of projects that it has in the pipeline.
These may be in planning. They may be in just preliminary
planning. We are asking them to identify every one of these
projects which can be put under construction in the next 9
months.
We will then give priority to those projects which
can then be started within the next 9 months.
As a result of the utilization of our leasing
program and the rehabilitation program, we will be able to
double the number of units that will be in occupancy in the
next 12 months.
Briefly, this is what we are going to do and how
we are going to do it. If you have any questions, I will
take them.
2
Mr. Weaver, you cited an increase in the number
of low income families that could be housed?
SECRETARY WEAVER: Yes.
Q
You mean an increase in the number of additional
ones to be housed?
SECRETARY WEAVER: Yes.
2
Were 35,000 units a year the number you would
need to house 150,000 people, not families?
SECRETARY WEAVER: Yes. The figures that I gave,
35,000 and 70,000, are dwelling units. 150,000 and 300,000
are individuals.
I
Mr. Secretary, how will this affect the cash out-
flow from HUD? Will this increase the costs of the various
programs?
SECRETARY WEAVER: This will be done under our
present authorizations. It will simply accelerate the program
which we already have authority for.
Q
Can you tell us what that present authorization
is, Mr. Secretary?
SECRETARY WEAVER: We have an authorization which goes
back over many years, but have 240,000 units of public housing
in the last omnibus bill. This will be within that authoriza-
tion. You see in this program, you authorize a number of units
rather than a dollar amount.
Q
240,000 is not an annual figure, is it?
SECRETARY WEAVER: No.
MORE
- 3 -
I
A figure since the Housing Act of '58, or
whatever?
SECRETARY WEAVER: Over a period of four years.
2
Mr. Secretary, will this cost the Government
any additional money?
SECRETARY WEAVER: No. The only difference here
will be the time when the annual contributions -- which is the
cost to the Government -- will be paid may be somewhat more
rapid than it would otherwise have been, but there will be
no additional authorization or appropriations needed to carry
out this program.
Q
Will it cost more money in fiscal year 1968
than it otherwise would have cost?
SECRETARY WEAVER: Not in '68, no.
a
How about '69?
SECRETARY WEAVER: In '69, it will accelerate the time
it begins so your outlay will be greater in that year.
a
Mr. Secretary, what kind of programs will have
to be delayed in order to give priority to these?
SECRETARY WEAVER: The programs that would be delayed
will be those developments which are now not sufficiently
advanced so that they can be put into construction quickly.
They will be pushed back in the pipeline.
Those that can be will be pushed up in the pipeline.
Q
Mr. Secretary, will this in effect be a one-shot
effort, or will you be able to sustain this double pace in
future years?
SECRETARY WEAVER: We will be able to sustain it for a
couple of years. By that time, we will have caught up with
the pipeline.
You cannot continue to do this. What you are
really doing is pushing up in the processing in time those
things which would normally be perhaps two years from now --
putting it up in a year's time.
When you do that a couple of years, you about
run out.
Q
The yardstick for pushing things up is the
impact of speeding up processing, not the social need of one
project against another?
SECRETARY WEAVER: The social needs are about equal.
They all are for low income people, displaced and in need
of housing. All of them have a high incidence of social need
to be included in the first place.
As between one degree of social need which is high,
and another a little higher, the answer would be yes. But
they all qualify so far as social need is concerned.
- 4 -
I
There is no idea the Federal Government is
going to target those cities where there have been civil
disorders?
SECRETARY WEAVER: No, there is no connection
between that and this program.
2
Mr. Secretary, we have been dealing with this
figure of 35,000. Has that been a limit, a congressional
limit, or an informally set goal?
Where has this figure come from?
SECRETARY WEAVER: There are two figures that set a
limit on us. First is the amount of annual contributions,
which is the subsidy with which we can enter the contracts.
That is around 60,000 units a year.
The second is the number of units that are produced
within that limitation. That has been running around 35,000.
We are now going to exceed both because we have a backlog.
So we will double 35,000 and come up with the 70,000.
We can do this for a couple of years under the existing
authorization until we catch up with the backlog.
2
Is this Turnkey method of construction more
expensive?
SECRETARY WEAVER: No. It is less expensive.
Q
Why is that, sir?
SECRETARY WEAVER: In the first place, time is
money in building. Where a project is in development and
planning for two or three years, you have extremely great
expenses of overhead, of operations, of tax estimates if it
isn't purchased, and of upkeep and maintenance, and so forth.
Secondly, by the Turnkey method because you don't
go out and advertise for bids, because the developer himself
has his own planning and architects -- the architectural paper
work and amount of plans necessary is much smaller than it would
be otherwise.
Under a government-owned-and-operated construction,
you have to have a great deal of inspection which would be done
by the architect for a private builder. He would be inspecting
for himself because he has to get the product in order so that
it meets the specifications to get it accepted.
Therefore, you get these economies. But, I think time
is the greatest of the economies.
Q
Mr. Secretary, how many families now live in low
rent, federally subsidized housing?
SECRETARY WEAVER: Over 600,000.
MORE
- 5 -
0
So this is an increment to that figure?
SECRETARY WEAVER: Yes.
0
Six hundred thousand families or individuals?
SECRETARY WEAVER: Families.
0
When you talked about going from 150,000 to
300,000, you are talking about individuals?
SECRETARY WEAVER: Yes. But when I talked about units,
I went from 35,000 to 70,000.
0
What would be the impact of delaying projects
not as far along in the pipeline? Will work stop in architects
and engineers offices? Will contracts not be let that might
otherwise be let?
SECRETARY WEAVER: No. By and large, where you have
architects and engineers that have progressed to the point
where they have made a significant contribution, there will
be a tendency to continue that and bring it to fruition.
Where they have not progressed very far and the
amount of expenditure is minimal, we will cut it off and save
money and time.
0
Mr. Secretary, do you have the names of cities
where you have projects that are far enough along so they can
be identified?
SECRETARY WEAVER: We sent the instructions out on
this yesterday. We had a meeting of our regional people on
Friday. We have worked pretty fast, but not that fast.
0
Mr. Secretary, why couldn't this have been
done before?
SECRETARY WEAVER: It couldn't have been done before
last year, because we didn't have the Turnkey method before
last year. It took some time to get the new method understood
by the local housing authorities and to where they can use it.
It has taken about a year's experience for many of
them to become convinced that it is workable and to accept it.
Remember, this is done by local authorities and not directly
by us.
Secondly, it took us about 12 months to revise our
regulations under Turnkey to make it most effective and
efficient.
0
Mr. Secretary, do you think most of these 70,000
units will be built under Turnkey?
SECRETARY WEAVER: I would say not all, but the vast
majority.
C
Can you put any dollar figure on this?
MORE
- 6 -
SECRETARY WEAVER: What sort of dollar figure?
a
Can you tell us what they would have otherwise
been in '68, but there will be an increase in payout during '69?
SECRETARY WEAVER: No, I can't, because it depends
on the nature of the project. I couldn't give you an exact
figure.
0
Generally speaking, what is the value of the
low-rent housing?
SECRETARY WEAVER: If you mean the value as far as
construction is concerned, these average around about probably
$14,000 or $15,000 a unit. This is including the land and
the construction costs.
C
How much of that will be Federal money? All
of it?
SECRETARY WEAVER: None of it.
O
Where does the subsidy come in?
SECRETARY WEAVER: That has nothing to do with that.
That is the construction cost.
The way public housing is financed is that there
are local bonds issued by the local public agency which is the
local authority. These are guaranteed by the Federal Govern-
ment and they are sold as tax-exempt local bonds. Therefore,
you get a very relatively -- low rate of interest.
The cost to the government on this is not there, be-
cause the bonds are paid back out of annual contributions.
The annual contributions are the figures which cost the
government. Each unit of housing, in public housing, now
averages around $700 a unit in subsidy.
0
Your annual costs, Mr. Secretary, your annual
contributions, are the difference between the revenue that
the local people get from the project and the costs of retiring
bonds? The government makes up that difference through annual
contributions?
SECRETARY WEAVER: No. There are two costs involved,
of course. There are the costs of the operation of the pro-
ject, management, repair, upkeep, etcetera. Then there are
the costs of the retirement of the bonds and the interest
on the bonds.
Annual contributions are used to retire and to pay
the interest on the bonds.
0
For the entire retirement and interest of the
bonds from the Federal Government?
SECRETARY WEAVER: Except sometimes there are
residual receipts.
Q
By and large, the receipts cover only the
operating costs of the project?
MORE
- 7 -
SECRETARY WEAVER: That is right.
Q
Will this, in effect, double the construction
work, the brick and mortar construction work, that would have
been done under this program; and when will that impact begin
to be felt, from the contractors' point of view?
SECRETARY WEAVER: within the next month and it will
certainly achieve that purpose during the year. All of it will
not be doubled construction, because in some instances the
leasing program is utilized. But most of it is new construction
or rehabilitation of existing units.
Q
Can you give us a breakdown of the 70,000 units?
SECRETARY WEAVER: No, we don't know. I can tell
you that the vast majority will be in new construction. Maybe
10 or 15 percent will be rehabilitation and about 10 percent
leasing, roughly.
Q
And the new construction will be mostly Turnkey?
SECRETARY WEAVER: Yes.
0
Mr. Secretary, can you tell us how long the
regional commissioners have to sort out this program? Do
they have a deadline?
SECRETARY WEAVER: We expect to get the information
in within 30 days.
0
Will the various projects be announced locally
or in Washington?
SECRETARY WEAVER: Locally.
a
You will then have to speed up your processing?
SECRETARY WEAVER: We have already done that. We
did that before we announced the program, before we got our
people in, SO we would be prepared to meet the new program.
O If an authority in the mid-West sends a new list
to Chicago, theoretically they should be able to get approval
right away: no time lag?
SECRETARY WEAVER: Nothing happens right away, but
they should get it with a minimum of delay. Obviously, we
are going to have to process real quickly in order to meet
this goal.
0
Mr. Secretary, did the possibility of doing all
this come to the President and then he suggested that you go
ahead and do it, or did you just pick out of the air, "Let's
see if you can double it"?
SECRETARY WEAVER: This evolved as we went along in
this. The President has been pressing on this, as I said,
over the last year. Fach new step has come out of the others
and each time he set a higher goal for us to meet. So far,
we have been able to meet them.
THE PRESS: Thank you, sir.
END
AT 12:50 P.M. EDT
tomorrow's transportation
air
7150
CONGRESSIONAL RECORD SENATE
June 13, 1968
S. 3641-AIRPORT DEVELOPMENT
As was done when highway user taxes
FEDERAL AIRPORT DEVELOPMENT ACT OF 1968
ACT OF 1968 INTRODUCED
were imposed, we should provide that
OUTLINE OF PROVISIONS
URGENT NEED FOR TRUST FUND
aviation user taxes be deposited in and
1. Establishes an Airport Development
CITED
administered under the trust fund ar-
Trust Fund administered by the Secretary
Mr. RANDOLPH. Mr. President, on
rangement to serve the purposes for
of Transportation.
behalf of myself and Mr. Moss, I have
which levied and collected.
2. Fund would be supported by special
taxes of 2% on domestic passenger tickets
introduced for appropriate reference a
The administration has proposed a
and $2 per passenger in foreign air trans-
bill, the Federal Airport Development
program predicated on user taxes for
portation. While the trust-funded program
Act of 1968.
airport and airways development, but
would function without general tax revenues,
The dominant features of the measure
without a trust fund arrangement. That
it does not preclude such appropriations.
would establish an airport development
proposal is in legislative form and is
3. Fund would be used:
trust fund which would be supported by
scheduled for consideration in hearings
(a) primarily for contracts of up to 40
special taxes of 2 percent on domestic
beginning June 18 in the Commerce
years in length by the Secretary of Trans-
portation with local airport sponsors to pay
air passenger tickets and $2 per passenger
Committee's Aviation Subcommittee,
up to 75% of the principal and interest of
in foreign air transportation on flights
under the chairmanship of the distin-
local airport bonds for airfield and terminal
originating at U.S. airports. Although
guished senior Senator from Oklahoma
projects; and/or,
the trust-funded program would func-
[Mr. MONRONEY]: That subcommittee
(b) to guarantee the full amount of such
held hearings last fall on the airports
local bonds; and/or,
tion without general tax revenues, the
and airways problems and issued tenta-
(c) to purchase local airport bonds for re-
legislation does not preclude such ap-
propriations. in fact, the measure con-
tive recommendations that a system of
sale; and,
user taxes and a trust fund arrange-
(d) to make short-term loans for advance
templates continuation of the existing
planning and land acquisition.
Federal-aid airport program with some
ment be established by law as the core
4. Funds would be available to:
expenditure authorizations. But I visu-
of a program for solution of the critical
(a) all airports served by air carriers;
alize the FAAP-general treasury fi-
airports and airways situation.
(b) general aviation airports designed to
nanced-as being limited essentially to
I believe in the validity of that tenta-
relieve congestion at major airports.
aid for small economic development air-
tive report issued by the Aviation Sub-
5. Contemplates continuation and exten-
sion of authorization of FAAP program con-
ports. The proposed trust-funded pro-
committee earlier this year on the basis
tinuance for small economic development air-
gram® would be for the development of
of its findings during the 1967 hearings.
ports and for general aviation airports.
a better air carrier and general purpose
The air carrier industry is almost unani-
6. Tax revenues of $109 million could be
airport system.
mous, I am told in endorsing most of
realized in FY 1969 and would support issu-
Congress has been asked to recognize
the recommendations of the subcom-
ance of $1,950,000,000 in local airport bonds
that the existing system of air carrier
mittee. Through the Air Transport As-
the first year, if enacted promptly.
and public use airports and airport
sociation, the scheduled carriers are on
7. Congress each year, through appropria-
tion acts covering FY 1969 and the four suc-
terminal and access facilities within the
the record with their views, as are most
ceeding fiscal years, would authorize the Sec-
United States is rapidly becoming inade-
other segments of the aviation industry.
retary of Transportation to make the ex-
quate to meet the present and future
Spokesmen for the administration like-
penditures to meet the obligations incurred.
needs for civil aviation operations.
wise are on the record of the general
The program is proposed as a means of
Congress also should declare that the
hearings. But now there is to be a round
generating large amounts of capital to meet
Federal Government has a responsibility
of hearings on specific legislation.
the nation's most immediate major airport
to plan, encourage, and assist in the de-
construction requirements without any bur-
Frankly, Mr. President, I believe the
den on the general taxpayer and without
velopment of a system of airports ade-
best specific recommendations for a pro-
unduly burdening airline passengers. The
quate to meet our civil aviation, postal
gram of airport development through
provision in Sec. 3(b) for federal contracts
service, and national defense needs.
the user tax-trust fund arrangement
to pay a portion of local debt service costs is
There seems to us to be ample evidence
have been those proposed on behalf of
based on Sec. 10 of the U.S. Housing Act of
that Congress should realize that finan-
the air carrier industry by Stuart G. Tip-
1937, as amended (42 U.S.C. 1410). The trust
cial assistance beyond that provided un-
ton, president of the Air Transport As-
fund feature is patterned in part on the
der existing laws is necessary to assure an
Highway Trust Fund. (see 23 U.S.C. 120,
sociation. Those recommendations are
note)
adequate system of air carrier and public
well represented in the provisions of the
use airports and air terminals and related
measure introduced today, but include
Mr. LAUSCHE. Mr. President, will the
facilities.
provisions also recommended by numer-
Senate yield for a question?
To those ends, we propose that the
ous other competent sources.
Mr. RANDOLPH. I yield.
costs of providing and maintaining such
It is our feeling that the ideas for
Mr. LAUSCHE. Do I correctly under-
airports and facilities should, insofar as
legislation embraced in this measure
stand that the bill just submitted by the
is practicable, be borne in the main by
should be available to the Aviation Sub-
Senator from West Virginia contem-
airport operators and the users of such
plates establishing a trust fund, similar
committee and the full Commerce Com-
airports. Thus, the base of financing
to the trust fund under which highways
mittee at the time of the hearings. They
would shift from Treasury general funds
are built, for the construction of airport
merit consideration, as do the admin-
to reliance principally on user tax in-
expansion and new facilities?
istration proposals and numerous cogent
come and trust fund management.
Mr. RANDOLPH. The understanding
and pertinent concepts espoused by the
I emphasize that the term "air car-
of the Senator from Ohio is correct.
chairmen and members of both the sub-
rier airport," as used in our proposed
Mr. LAUSCHE. And what is the tax
committee and the full committee.
legislation, means any air traffic hub or
that would be imposed upon the cost of
nonhub receiving scheduled service by
I have confidence that there will
the ticket?
an air carrier or air carriers certificated
emerge from the subcommittee chaired
Mr. RANDOLPH. Two percent on
by the Civil Aeronautics Board. The term
by the able Senator from Oklahoma [Mr.
domestic passenger tickets and $2 per
does not contemplate or imply segrega-
MONRONEY] and the parent Commerce
passenger on foreign air transportation
tion of any public use. Federal-aided
Committee headed by the distinguished
at airports where the passenger would
airport for air carrier utilization only.
senior Senator from Washington [Mr.
originate his trip in the United States.
Mr. President, I do not believe in total
MAGNUSON] a comprehensive legislative
Mr. LAUSCHE. I assume that the
reliance on annual appropriations from
solution to the serious airports and air-
Senator anticipates that the future will
the Treasury general fund for Federal
ways system problems.
demand larger airports and more air-
aid to airport development, other than
Mr. President, I ask unanimous con-
ports, and that instead of paying for
for the small so-called community eco-
sent to have printed in the RECORD at
their construction out of the general
nomic development airfields. And, cer-
this point a brief outline of the provisions
fund, the users of the airports should
tainly, I am opposed to levying new
of the proposed Federal Airport Devel-
share the major part of the cost.
aviation user taxes predicated on their
opment Act of 1968, introduced today.
Mr. RANDOLPH. The Senator from
use for airports and airways develop-
There being no objection, the outline
Ohio is correct.
ment purposes, only to have them com-
was ordered to be printed in the RECORD,
In the earlier days of our highway pro-
mingled in the Treasury general funds.
as follows:
gram in this country, we had no trust
June 13, 1968
CONGRESSIONAL RECORD
S7151
fund. We came, of course, to 1956, when
ful purposes. Conceivably an individual
Boyd to the Vice President transmitting
we needed an interstate system, and we
could even acquire a nuclear weapon
this proposed bill, together with a sec-
went to the trust fund for our road de-
under SO broad a provision.
tion-by-section analysis of the provisions
velopment.
Mr. President, I fail to see any con-
contained in the bill.
The same situation now exists with re-
vincing reason for permitting the sale of
The ACTING PRESIDENT pro tem-
spect to airports. Our airports are inade-
such weapons to private parties.
pore. The bill will be received and ap-
quate and antiquated, and we need a very
Destructive devices have no reasonable
propriately referred; and, without ob-
dynamic program; and I believe the users
use for sport or recreation. They are en-
jection, the letter and section-by-section
should pay the major portion of it.
tirely inappropriate to household protec-
analysis will be printed in the RECORD.
Mr. LAUSCHE. Will the Senator al-
tion. They should simply be removed from
The bill (S. 3645) to authorize the Sec-
low me to become a cosponsor of the
the market. Therefore, in anticipation
retary of Transportation to plan and
measure?
that the recently passed title IV will be-
provide financial assistance for airport
Mr. RANDOLPH. I am gratified to
come law, I introduce again today a bill
development, and other purposes, intro-
have the cosponsorship of the Senator
to prohibit the sale of destructive devices
duced by Mr. MONRONEY, by request, was
from Ohio.
to individuals. I hope and believe that
received, read twice by its title, and
The ACTING PRESIDENT pro tem-
when the Senate has had a fuller oppor-
referred to the Committee on Commerce.
pore. The bill will be received and ap-
tunity to consider the merits of this pro-
The letter and section-by-section
propriately referred.
posal it will receive the strong endorse-
analysis, presented by Mr. MONRONEY,
The bill (S. 3641) to provide additional
ment of this body and the House of
are as follows:
Federal assistance in connection with the
Representatives.
THE SECRETARY OF TRANSPORTATION,
construction, alteration, or improvement
I sent the bill to the desk and ask that
Washington, D.C.
of air carrier and general purpose air-
it be printed in full at this point in the
Hon. HUBERT H. HUMPHREY,
ports, airport terminals, and related fac-
RECORD.
President of the Senate,
ilities, and for other purposes, introduced
Washington, D.C.
The PRESIDING OFFICER. The bill
DEAR MR. PRESIDENT: There is transmitted
by Mr. RANDOLPH (for himself and other
will be received and appropriately re-
herewith a proposed bill "To authorize the
Senators), was received, read twice by
ferred; and, without objection, the bill
Secretary of Transportation to plan and pro-
its title, and referred to the Committee
will be printed in the RECORD.
vide financial assistance for airport develop-
on Commerce.
The bill (S. 3643) to amend title 18,
ment, and other purposes", together with a
United States Code, to prohibit the sale
section-by-section analysis.
This proposed bill would chart a new
S. 3643-INTRODUCTION OF BILL
and delivery of destructive devices,
course for Federal assistance to airport de-
TO PROHIBIT THE SALE AND
machineguns, short-barreled shotguns,
velopment. It would authorize direct loans
DELIVERY OF DESTRUCTIVE DE-
and short-barreled rifles, introduced by
for development of airports which are po-
VICES, MACHINEGUNS, SHORT-
Mr. BROOKE, for himself and Mr. HART,
tentially viable but for which loans in the
BARRELED
SHOTGUNS,
AND
was received, read twice by its title, re-
private market cannot be obtained on reason-
SHORT-BARRELED RIFLES
ferred to the Committee on the Judici-
able terms. The loans outstanding at any one
ary, and ordered to be printed in the
time would be limited to $1,000,000,000.
Mr. BROOKE. Mr. President, yester-
To assist development of airports served
RECORD.
day I introduced a bill to provide for na-
by local service carriers receiving operating
S. 3643
tional registration of firearms. The
subsidy from the Civil Aeronautics Board,
Be it enacted by the Senate and House of
the bill would authorize grants up to 50 per-
measure was designed to supplement and
Representatives of the United States of
cent of the cost of projects attributable to
strengthen both our existing gun control
America in Congress assembled, That the
service by the subsidized carrier. As a condi-
laws and the recently passed legislation
Congress hereby finds that destructive de-
tion to a grant, the Secretary would have to
awaiting the signature of the President,
vices (as defined in title 18, United States
find, after consultation with the Board, that
as well as the additional legislation I hope
Code), machineguns, short-barreled shot-
the cost of the project did not exceed the
we will soon approve.
guns, and short-barreled riffes are primarily
value of the service to be provided.
With the same sense of urgency, I rise
weapons of war which have no appropriate
All of the proposed Federal assistance
use as instruments of sport, recreation or
today to offer on behalf of myself and
would be available only for development
personal defense; that intrastate commerce
Senator HART a bill to prohibit the sale
projects related to landing areas and safety
in such devices and weapons affects the flow
facilities. It would not be available for ter-
to private parties of destructive devices,
of interstate and foreign commerce in such
minal, hangar, parking, and other passenger
machineguns, short-barreled shotguns,
devices and weapons; and that therefore it
service or industrial purposes.
and short-barreled rifles. There is no
is necessary to regulate all commerce in such
The bill would require the Secretary to pre-
conceivable reason why such weapons
devices and weapons.
pare, within two years, and revise at least
should be sold to private parties. Destruc-
SEC. 2. (a) section 922(b) (4) of title 18,
every two years thereafter, a plan for the Na-
tive devices have been defined to include
Unted States Code, is amended to read as
tional Airport System. The plan must set
follows:
"any explosive, incendiary, or poison gas
forth for at least a ten-year period the type
"(4) to any person any destructive device,
bombs, grenade, mine, rocket, or similar
and estimated cost of all airport development
machinegun (as defined in section 5848 of
device; and any type of weapon which
required to meet the needs for airport facil-
the Internal Revenue Code of 1954), short-
ities in locations served by air carriers, for
will or is designed to or may readily be
barreled shotgun, or short-barreled rifle."
the national defense and postal service, and
converted to expel a projectile by the ac-
(b) Section 922(b) of such title is amend-
for the economic development objectives of
tion of any explosive and having any
ed by adding at the end thereof the follow-
the States and their subdivisions.
barrel with a bore of one-half inch or
ing new sentence: "Paragraph (4) of this
The growth in aviation activity, both air
more in diameter." They are obviously
subsection shall not apply to any research
carrier and general aviation, will continue
organization designated by the Secretary."
weapons of war, not suitable for personal
to create a demand for expanded -airport
SEC. 3. The amendments made by this Act
facilities. The Federal Government has a
use.
shall become effective 30 days after the date
At the present time, weapons of this
substantial interest in the orderly develop-
of its enactment.
ment of our Nation's airports, but this Fed-
description can be purchased by a private
eral interest should not be considered over-
citizen with no significant controls what-
riding. Our civil airports are owned and
soever, and with no effective provision
S. 3645-INTRODUCTION OF BILL TO
operated by State and local governments or
that the purchase be reported to the ap-
BE KNOWN AS THE AIRPORT DE-
by private individuals. They are used by pri-
propriate law-enforcement officers.
VELOPMENT ACT OF 1968-NOTICE
vately-owned common carriers, by private
The omnibus crime control bill, which
OF HEARINGS
corporations, and by private individuals.
They are financed largely by these users and
was recently considered by this body and
Mr. MONRONEY. Mr. President, I
by the communities served. The interests and
which is now awaiting the President's
introduce, by request and for appropriate
responsibilities of these groups must be
signature, provides that destructive de-
reference, a bill to authorize the Secre-
recognized in our policies and our planning.
vices can be sold to anyone who obtains
tary of Transportation to plan and pro-
The aviation industry has reached a new
a sworn statement from his local law-
vide financial assistance for airport de-
stage of maturity. The evidence is clear that
enforcement officer that there is no law
velopment and other purposes. I ask
Federal grant assistance is no longer re-
against his possession of such weapons,
unanimous consent that there be printed
quired at most airports. With few excep-
and that there is no reason to believe
tions, the direct users of an airport are finan-
in the RECORD at this point a letter from
cially capable of bearing the full costs of
that the weapon will be used for unlaw-
Secretary of Transportation Alan S.
development and operation. Certainly, the
S7152
CONGRESSIONAL RECORD SENATE
June 13, 1968
unsubsidized airlines are capable as a regu-
tein which extends for at least ten years; in-
authority, because the authorizing pro-
lated industry, of bearing the full costs of
cludes all types of development required for
their operations. Today, less than 2 per-
visions contained the geographical de-
cargo, passenger, and aircraft handling; and
cent of the expenses of the scheduled airlines
covers all airport development needed in lo-
scription of "a Territory or possession of
are attributable to airport landing fees.
cations served by air carriers, for the special
the United States," and, therefore, ex-
Very few general aviation airports charge
needs of national defense and the postal
cluded Alaska and Hawaii when they
any landing fee at all. The impact of a
service, and to carry out the economic de-
became States. The purpose of this pro-
inodest fee sufficient to develop and support
velopment objectives of State and local gov-
posed legislation is to restore applicabil-
these airports would be negligible in most
ernments.
ity to employees dying in those two
cases.
Section 7. Separate Fund. This section es-
States.
A reasonable system of charges should pro-
tablishes a separate fund in the Treasury for
I ask unanimous consent that the let-
vide communities sufficient revenues to at-
the purpose of financing the loan program
tract private financing of needed airport de-
authorized by section 3. The initial capitali-
ter dated May 13, 1968, to the President
velopment. There are, however, special cases
zation of the fund will be made by appropri-
of the Senate from the Secretary of
where Federal financial assistance must be
ations. The Federal National Mortgage As-
Transportation be printed in the RECORD
continued and the proposed bill would do
sociation Charter Act is ainended to author-
at this point, as a part of my remarks.
this.
ize the Secretary to establish trusts with the
The PRESIDING OFFICER. The bill
The Bureau of the Budget has advised
FNMA for the resale of obligations acquired
will be received and appropriately re-
that enactment of this proposed legislation
under the loan program. All expenses associ-
ferred; and, without objection the letter
would be in accord with the President's
ated with the administration of section 3 will
will be printed in the RECORD.
program.
be paid from the fund.
Sincerely,
Section 8. Definitions. This section defines
The bill (S. 3648) to authorize the
ALAN S. BOYD.
the terms "landing areas", "public agency",
payment of the expense of preparing
and "Secretary" for the purpose of their
and transporting to his home or place of
SECTION-BY-SECTION ANALYSIS OF A BILL To
use in the Act.
interment the remains of a Federal em-
AUTHORIZE THE SECRETARY OF TRANSPORTA-
Section 9. Appropriations. This section au-
ployee who dies while performing official
TION To PLAN AND PROVIDE FINANCIAL As-
thorizes appropriations necessary to carry out
duties in Alaska or Hawaii, and for other
SISTANCE FOR AIRPORT DEVELOPMENT, AND
the Act.
purposes introduced by Mr. GRUENING,
OTHER PURPOSES
Section 10. Effective Date. The Act is to be-
Section 1. Short Title. This section cites
come effective July 1, 1969.
was received, read twice by its title and
referred to the Committee on Govern-
the Act as the "Airport Development Act of
Mr. MONRONEY. Mr. President, the
ment Operations.
1968".
bill would authorize direct loans for
Section 2. Declaration of Purpose. This sec-
The letter, presented by Mr. GRUENING,
tion sets forth the finding of Congress that,
landing area and safety facility develop-
is as follows:
while most airport development can be ac-
ment in an amount not to exceed $1 bil-
THE SECRETARY OF TRANSPORTATION,
complished through private financing, there
lion. In addition there would be author-
Washington, D.C., May 13, 1968.
is a need for more extensive planning for
ized $100 million for 50-percent match-
Hon. HUBERT H. HUMPHREY,
future airport facilities and the provision of
ing grants at those airports served ex-
President of the Senate,
Federal financial assistance where private
clusively by local service carriers.
Washington, D.C.
capital is not available on reasonable terms.
DEAR MR. PRESIDENT: Enclosed is a draft
The need for a new Federal airport as-
Section 3. Airport Loans. This section au-
of a bill "To authorize the payment of the
thorizes the Secretary to purchase securities
sistance program is unquestioned and is
expenses of preparing and transporting to
or make loans for projects for the construc-
amply documented not only by the Sec-
his home or place of interment the remains
tion of landing areas and other facilities and
retary's letter, but also by the interim
of a Federal employee who dies while per-
interests in land necessary to the operation
report issued by the Aviation Subcom-
forming official duties in Alaska or Hawaii,
of aircraft. The loans are subject to certain
mittee of the Committee on Commerce
and for other purposes."
findings, the most important of which, is
last January. I introduce this bill SO that
It is recommended that it be enacted by
that the project cannot be financed on rea-
it can be considered, along with other
the Congress.
sonable terms without Federal assistance. It
Up until the time that Alaska and Hawaii
proposals for airport development dur-
is contemplated that loans would be made for
became States, the Act of July 8, 1940 (now
all or part of the project costs, depending
ing the hearings I have scheduled for
codified in Title 5 of the United States Code
upon whether private financing or grants
Tuesday, June 18.
as section 5742) authorized payment of the
were available for any part of the costs. Se-
expenses of preparing and transporting to
curities purchased or loans made could not
his former home or place of interment the
exceed 30 years maturity, and would bear in-
S. 3648-INTRODUCTION OF BILL TO
remains of a Federal employee who died
terest at current Treasury rates. Total loans
AUTHORIZE THE PAYMENT OF
while performing official duties in Alaska
outstanding could not exceed $1 billion.
EXPENSES OF TRANSPORTING
and Hawaii, and the expenses of transport-
Section 4. Grants to Airports Served by
BODIES OF FEDERAL EMPLOYEES
ing his family and household effects to his
Local Service Carriers. This section author-
FROM ALASKA AND HAWAII TO
former home. However, the change in po-
izes the Secretary to make grants for air-
litical status of Alaska and Hawaii from Ter-
THEIR FORMER HOMES
port development at those airports at which
ritories to States had the effect of canceling
the only certificated service is provided by
Mr. GRUENING. Mr. President, I in-
the authority, because the authorizing pro-
airlines receiving operating subsidy from the
troduce, for appropriate reference, a bill
visions contained the geographical descrip-
Civil Aeronautics Board. Grants may be made
tion of "a Territory or possession of the
to authorize the payment of the expenses
only for projects attributable to the opera-
United States", and, therefore, excluded
of preparing and transporting to his
tions of the certificated carrier, and only
Alaska and Hawaii when they became States.
home or place of interment the remains
where the Secretary finds, after consultation
The purpose of this proposal is to restore ap-
with the Board, that the cost of the project
of a Federal employee who dies while
plicability to employees dying in those two
does no substantially exceed the value of
performing official duties in Alaska or
States.
the service to be provided by the carrier. The
Hawaii, and for other purposes.
The authority to pay a third category of
Federal share may not exceed 50 percent of
This bill is introduced at the request
expenses, transportation of the remains of
the project cost. The total grant authoriza-
of the Secretary of Transportation. The
dependents of employees stationed in Alaska
tion is $100 million. If the demand exceeds
or Hawaii to their former home, was added to
Secretary has indicated in his request
funds available, the Secretary must appor-
the 1940 Act by section 7(b) of the Act of
to the President of the Senate that up
tion funds, taking into consideration the
July 15, 1954. This authority was not affected
until the time that Alaska and Hawaii
relative effect of each project on the air
when Alaska and Hawaii became States, be-
transportation service available to the locality
became States, the act of July 8, 1940-
cause the 1954 amendment contained the
served, and the need to develop a balanced
now codified in title 5 of the United
geographical description of "a place outside
airport system.
States Code at section 5742-authorized
the continental United States or in Alaska".
Section 5. Advances of Funds. This section
payment of the expenses of preparing
Thus, since enactment of the Act of July 15,
authorizes the Secretary to advance funds
1954, we have had the inconsistent situation
and transporting to his former home or
to an airport eligible for assistance under
where the remains of a dependent of an em-
place of interment the remains of a Fed-
ployee stationed in Alaska or Hawaii can be
sections 3 or 4 for the purpose of preparing
eral employee who died while performing
plans and specifications, and taking other ac-
returned at Government expense, but the re-
official duties in Alaska or Hawaii, and
mains of the employee cannot be.
tions preliminary to construction, including
the acquisition of land and interests therein.
the expenses of transporting his family
This bill is motivated by geography not
Section 6. National Airport System Plan-
and household effects to his former home.
political status. It does not involve special
ning. This section directs the Secretary to
However, the change in political status
legislative treatment for Alaska and Hawaii.
of Alaska and Hawaii from territories to
It does involve recognition of geographical
prepare, periodically revise, and report prog-
factors which the conferring of political
ress on a plan for the National Airport Sys-
States had the effect of canceling the
status could not change and which pose
Transportation
I4520
CONGRESSIONAL RECORD
MARITIME June
cal jackals smelling the blood of the old lion
2. Informing one's self on issues and
chairman, contends the latest report is-
in the presidential palace.
candidates.
sued by the Department of Agriculture
The union leaders, especially communists,
3. Contributing to the party of your
shows our farmers sinking further into
started out after bread-and-butter issues
choice.
while many young workers wanted a new
4. Voting in political elections.
the economic quicksand with each pass-
society. Now it appears the leaders have
Moreover, employees are free to express
ing year. The April farm income situa-
learned from their troops and also seek to
their opinions regardless of where they stand
tion as published by the Economic Re-
overthrow the government.
on political issues. In instances where an
search Service of the Department shows
employee is asked to speak for the Corpora-
specifically farm production expenses on
tion on a matter on which he personally
the increase. In fact the report tells us
GENERAL ACCEPTANCE CORP.
holds views contrary to the company posi-
that farm production expenses this year
AND GOVERNMENT
tion, he is free to decline to speak.
The Corporation believes that if all em-
may run up to $11/2 billion higher than
(Mr. ROONEY of Pennsylvania asked
ployees inform themselves of the major pub-
last year's Agriculture Department esti-
and was given permission to address the
lic issues and problems at the National,
mate. This only reflects the effect of in-
House for 1 minute and to revise and ex-
State, and local levels, they will be able to
creasing inflation on the American
tend his remarks and include extraneous
participate more effectively as individuals
farmer.
matter.)
in civic, business and political affairs.
PER ACRE STATISTICS ALARMING
Mr. ROONEY of Pennsylvania. Mr.
STATEMENT OF S. H. WILLS, PRESIDENT AND
The task force was particularly
Speaker, ever since I first entered public
CHAIRMAN OF THE BOARD
alarmed at the rise in capital expendi-
life I have tried to encourage maximum
There has long been a need for business
tures, taxes and interest payments as
participation in the many facets of pub-
people to speak out and act in support of
calculated by the Department on a per-
lic policymaking from the private costors
their convictions. By the same token, sound
acre basis. Capital expenditures, includ-
of our Nation.
business policies for this Corporation can
ing farm buildings, vehicles and other
Tt is my conviction every franchised
be developed only with a full understanding
machinery and equipment, have risen 55
citizen should exercise his voice and his
of the influence that various other interests
percent since 1960, according to the re-
vote in the best interests of his Nation,
exert at the Federal, State, and local levels.
port. This same situation report shows
his State, his community, and himself.
With these realities in mind, we recognize
Not only does he have the right to be
one of the basic requirements of a true
that taxes payable per acre also rose 110
democracy is that all of its components be
percent during the same period. Com-
heard in the affairs of the public, but
articulate in their own best interests, con-
pare such increases with the much
also he has a very definite responsibility
sistent with the best interests of our society
smaller 5.7 percent increase in the per
to participate.
as a whole.
acre index on prices received for all com-
In the past, I have observed with dis-
Therefore, with a strong desire for GAC
modities as reported in USDA's agricul-
tubing regularity efforts by some em-
to portray a positive business image, dedi-
ture statistics publication, and you can
ployers in the private sector to discour-
cated to fostering the principles of the free
age their employees from engaging in
enterprise system and Constitutional gov-
readily understand why our farmers feel
ernment. the Corporation intends to partici-
the ever-increasing pressures of the cur-
community, civic, or governmental af-
pate actively in significant public relations
rent pinch. There is a limit on how much
fairs. Whenever possible, I have urged
and civic affairs programs. The Corporation
a farmer can squeeze out of an acre of
reevaluation of such policies because
has an obligation to respond to unfavorable
land in income, but there seems to be no
they are totally inconsistent with the
and unsound political, social, and economic
limit on where his per-acre expenses can
basic principles of our democratic so-
stimuli on behalf of its owner-shareholders,
go under current administration policies.
ciety.
its employees, its customers and its
This week, a statement of policy is-
neighbors.
It is evident that the policies developed
sued by the General Acceptance Corp.,
In the following policy statement we urge
during the past 7 years in Washington
based in my congressional district, came
each employee, as a private citizen, to as-
need a transfusion of new ideas that will
sume this essential role, as GAC intends as a
be responsive to the economic needs of
to my attention. Because it is an extraor-
corporate citizen.
our farmers and rural America. We must
dinarily positive policy which recog-
nizes fully the importance of responsible
not forget these polices led to a drop of
$1.9 billion in realized net farm income
citizen participaton in public affairs, I
(Mr. SIKES asked and was given per-
am pleased to be able to bring this policy
this past year and threatens to perpet-
mission to extend his remarks at this
uate the condition.
to the attention of my colleagues.
point in the RECORD and to include ex-
It includes both a statement of GAC's
traneous matter.)
We need a change in Washington that
will result in the immediate reversal of
resolve to fulfill its role as a corporate
[Mr. SIKES' remarks will appear here-
citizen, by Mr. S. H. Wills, president and
these deplorable conditions and I would
after in the Extensions of Remarks.]
chairman of the board, and a policy
be less than candid to suggest any other
statement encouraging employee ac-
course than to get to the root of the
tivity:
problem by changing the leadership that
(Mr. EDMONDSON asked and was
PUBLIC RELATIONS POLICY
has brought rural America so far down
given permission to extend his remarks
The lives and future welfare of GAC em-
the road to ruin.
at this point in the RECORD and to in-
ployees and their families have been and
clude extraneous matter.)
will continue to be greatly influenced by
public affairs. Public policy as developed by
[Mr. EDMONDSON'S remarks will ap-
LOTS OF LUCK
community, civic and governmental activi-
pear hereafter in the Extensions of Re-
MAILLIARD asked an was
ties covers a wide area, bearing directly on
marks.]
the future status of free competitive enter-
given permission to extend his remarks
prise in this complex society. If we are to
at this point in the RECORD and to in-
have a voice in the formation of that policy,
(Mr. EDMONDSON asked and was
clude extraneous matter.)
we must take an active interest.
given permission to extend his remarks
Mr. MAILLIARD. Mr. Speaker, on
The employees of the GAC Corporation
at this point in the RECORD and to in-
May 22-National Maritime Day, 1968-
and its subsidiaries should express informed
clude extraneous matter.)
the distinguished chairman of our Com-
interest and actively participate in public
affairs. In doing so, they will assist in ful-
[Mr. EDMONDSON'S remarks will ap-
mittee on Merchant Marine and Fish-
filling the objectives of keeping our Nation
pear hereafter in the Extensions of Re-
eries wrote to the President pointing up
strong and our social and our economic in-
marks.]
the needs of the American maritime in-
stitutions viable. GAC employees are urged
dustry and concluding that only he, the
to seek out those cultural, governmental, or
President of the United States, could
community service activities suited to their
NEW STATISTICS SHOW FARMER
right the neglect and wrong our Mer-
particular talents, interests, and preferences.
SINKING FURTHER INTO ECO-
chant Marine has felt for so many years.
In addition, the Corporation encourages
NOMIC QUICKSAND
To the gentleman from Maryland, I
all employees to support the political parties
(Mr. LANGEN asked and was given
say, "Lots of luck." Two years ago on a
of their choice with their time and talents
permission to extend his remarks at this
similar occasion-National Maritime
and whenever possible, to take an active part
in the bi-partisan processes of government
point in the RECORD and to include ex-
Day, 1966-I addressed an open letter
in the communities where they live. This
traneous matter.)
to the President, expressing a similar
should include:
Mr. LANGEN. Mr. Speaker, the House
alarm over the deterioration of our mari-
1. Registering with a lawful political
Republican Agriculture Task Force, of
time posture and suggesting certain
party.
which I have the privilege of being
areas for immediate action. Unfortu-
June 4, 1968
CONGRESSIONAL RECORD - HOUSE
4521
nately, my expression of concern appar-
present decrepit state. You recognized mari-
may be taken to revitalize the industry. With
ently fell upon deaf ears. For the sake of
time industry's vital trade and defense role
more than 80% of our present merchant fleet
the American Merchant Marine, I only
which will continue to be demanded of it
reaching the end of its economic life within
and which demands it has always met in the
hope my colleague fares better than I.
the next five years, we can no longer afford
past.
further pursuit of this dilatory and most un-
The full text of my open letter to
That need continues at this very moment
profitable course.
L. B. J. on Maritime Day, 1966 and the
but no progress is as yet in sight. Instead,
"We had hoped that the 'new' maritime
letter of the chairman of our Merchant
we are treated to a few examples of lack of
policy which you promised in your State of
Marine and Fisheries Committee to the
concern-perhaps even worse.
the Union Message in January 1965 would
President follows:
In these critical times, it is essential that
resolve this conflict. However, more than six-
COMMITTEE ON
positive and constructive declarations on our
teen months have now elapsed, and we still
MERCHANT MARINE AND FISHERIES,
merchant marine come from you as our na-
have no new maritime policy. Instead, we
Washington, D.C., May 22, 1968.
tional leader. This is a pressing need. We in
have two additional and conflicting reports
The PRESIDENT,
Congress can then seek to legislate your
on what should be done. We have received
maritime wishes. We must not, however, be
The White House,
also a bill to create a new Department of
Washington, D.C.
placed in a position of being both slighted
Transportation, in which the Maritime Ad-
DEAR MR. PRESIDENT: Only as a last resort
and ignored. The Administration's spokesman
ministration will be submerged much in the
at the departmental level must not be the
do I write you, knowing full well your pre-
same manner it now is within the Depart-
head of an agency who has been denied this
ment of Commerce. None of these events has
occupation with many vital matters of na-
authority by the Congress itself.
tional concern. Few can appreciate more
served to abate the conflict. Rather they have
Hopefully, it is not already too late, but I
than you the responsibilities of the Congress
served to increase its severity, raising fur-
in effectuating and/or initiating programs
fear only you can right the neglect and wrong
ther doubt over the role of the government
our merchant marine has felt for too many
in maritime affairs and the future course of
and policies of our government. Certainly, I
cannot add to your knowledge anything on
years.
the American Merchant Marine.
Sincerely,
"So confused has this matter become that
the essentiality of creating ocoperative atti-
EDWARD A. GARMATZ,
tudes and relationship. between the White
today we are unable even to get agreement
Chairman.
House and the Congress.
on the existing condition of the merchant
In recent days, I personally, as Chairman
marine, much less on a new policy. We have,
AN OPEN LETTER TO L. B. J. ON MARITIME DAY
of the House Committee on Merchant Marine
for example, the Maritime Administrator
and Fisheries, and my colleagues, have been
For more than a year now, I have been
stating that, and I quote: 'Our present fleet
prodding agencies of the Executive, attempt-
is, for the most part, physically obsolete.'
treated to a rare indignity which we col-
lectively feel hs been most offensive.
ing to stir them into taking constructive ac-
The Deputy Maritime Administrator states,
tion on the problems of the American Mer-
and I quote: I, for one, fail to find that
On April 23, 1968, our Committee com-
menced hearings on legislation to formulate,
chant Marine. I have made public speeches.
our merchant marine is in a disastrous situ-
I have spoken on the floor of the House. I
ation.' Finally, we have the Secretary of
modify and improve our merchant marine
through a national policy. We recognized
have appeared before Congressional Commit-
Defense, to whom a considerable amount of
tees. I have communicated with the Mari-
responsibility for the industry appears to
that it was impossible to delay much longer
initiating mechanisms to rectify the many
time Administrator, the Under-Secretary of
have been abdicated contrary to existing law,
Commerce for Transportation, the Secretary
stating that the American Merchant Marine
things wrong with our maritime industry.
We invited the Secretary of Commerce, in
of Commerce, various members of the De-
is 'adequate.' Yet high-ranking professional
whose department the Maritime Administra-
partment of Defense, and yes, even the Sec-
Naval officers frequently have stated that it
tion operates, to appear. In response, I was
retary of Defense himself. I stand before you.
is not adequate.
this evening, feeling like a 20th Century Paul
"Mr. President, this current confusion is
advised that all transportation functions
Revere whose cries of alarm have fallen upon
simply a manifestation of my worst fears
were placed by you in charge of the Secre-
deaf ears.
entertained in 1961 when the Maritime Ad-
tary of Transportation. This, in spite of the
fact that the Congress in approving the crea-
Let us not, therefore, delude ourselves any
ministration was placed within the Depart-
ment of Coinmerce. In a word. we are bank-
tion of the Department of Transportation,
further. You know and I know there is but
specifically excluded from that department
one man today who can remedy the current
rupt-bankrupt in federal maritime leader-
maritime functions.
inadequacies of the government's role in
ship; and because of it we find ourselves in
Moreover, this year the House agreed to
maritime affairs. That one man is the Presi-
this present deplorable state of affairs. Only
dent of the United States. For no matter how
you, Mr. President, can bring some sem-
establish an independent Maritime Admin-
blance of order out of this chaos.
istration outside of any specific established
arduously Congress may labor to bring about
government department.
a constructive maritime program, success or
"I respectfully suggest that there are
For the Secretary of Commerce, with mari-
failure is wholly dependent upon Executive
answers to the current problems facing the
American Merchant Marine. The situation is
time authority under him, to decline our in-
implementation. Therefore, this evening I
not incapable of solution, but we must get
vitation and, in fact, delegate it to the Sec-
will make my presentation to you in the
retary of Transportation who has been denied
form of an open letter to the President of
on with a realistic ship construction pro-
such custody, creates confusion for all of us
the United States.
gram.
"In your proclamation setting aside this
and, even worse, denotes a total rejection of
"DEAR MR. PRESIDENT: It seems appropriate
day as National Maritime Day, you stated
the expressed will of Congress.
that, since you have set aside this day, May
that, and I quote: we will continue to
We all realize that our merchant marine
23, 1966, for the 34th annual celebration of
need ships-fast, modern descendants of the
program is largely contingent upon the scope
National Maritime Day, I should address you
famous "Clippers"-to carry our products to
of Federal appropriations therefor. While we
on this occasion, expressing my sincere and
the far corners of the earth.' I fear that
are in the midst of prolonged and basic hear-
prefound personal concern over the ever-
under existing conditions these ships will
ings on this vital subject, we were kept un-
deepening crisis developing in the American
never be constructed. The subsidized ship
aware of the Administration's thinking on
Merchant Marine. I unfortunately find little
replacement program today is more than 90
the amount of appropriations that might
cause for celebration on this festive occasion,
ships behind schedule. Yet the Congress has
be requested in the future. Instead, we
since it is my personal belief as a private
before it your budget request for fiscal year
learned of the Administration's point of view
citizen, as a Naval officer, and as a Member
1967, which will allow the construction of
in this regard from the public press on May 9.
of Congress that, because of the present atti-
only 9 to 11 ships. I respectfully suggest
On that day, the Baltimore Sun reported, and
tude of the federal government, the American
that this level of federal expenditures for
Secretary Boyd has confirmed the reliability
merchant marine today is being steered along
ship construction is totally inadequate. We
of that report, to the effect that if the Ad-
a course to disaster. If we hope to preserve
are, for example, scrapping ships from our
ministration is required to seek reductions
the American merchant marine as a useful
National Defense Reserve Fleet at ten times
in Federal expenditures, one of the vehicles
and effective national asset, we must come to
the rate of construction provided for under
chosen would in effect decimate even the very
grips with its problems without further de-
this current request.
limited appropriations earlier requested.
lay. Conditions have been allowed. to dete-
"I believe you will find upon examination
This, Mr. President, is the equivalent of
riorate to such an extent that now, Mr. Pres-
of budget requests over the last several years
ending new merchant construction for at
ident, you and you alone can rescue the
that the allocation of our national resources
least a full year, perhaps longer. This step
American Merchant Marine from the arena
to maritime affairs is becoming progres-
was apparently taken within the Adminis-
of endless academic debate.
sively smaller, while the problems of the in-
tration without prior consultation with re-
"We have endured patiently at least five
dustry are getting progressively larger and
sponsible Congressional leaders of your own
years of extensive study of the ills of the
larger. Even compared with last year's in-
Party. You can, I am sure, appreciate my
American Merchant Marine by various groups
adequate federal budget for ship construc-
shock, not only at the substantive sugges-
sponsored by the Executive. Each group has
tion, this year's request represents a sub-
tion but at being advised thereof by the
published its respective recommendations.
stantial reduction, a cut of about one-third
press.
None have been disposed of, either through
in both dollars and numbers of ships. It is
Last fall, Mr. President, you indicated to
Congressional or Administrative action. To
one-half the amount of federal funds re-
me and others of the House and Senate your
the contrary, each and every study has served
quested for ship construction in fiscal 1959
desire to move forward with an improved
only to provide additional material for de-
at a time when the total federal budget was
modernized merchant marine in light of its
bate over alternative courses of action which
only about 60% of that being requested
Transportation
June 4, 1968
TO:
MR. LON WOODBURY
FROM: ERNEST J. CORRADO, LEGISLATIVE ASSISTANT,
AMERICAN MERCHANT MARINE INSTITUTE, INC.
SUBJECT: REASONS FOR MR. NIXON'S SUPPORT OF A
POSITIVE AND CREATIVE MARITIME POLICY
AND PROGRAM
I. Because such a policy and program are in the national interest
A. Our merchant fleet is declining both in quality and
quantity.
1. We have declined from first to sixth place in
fleet size, and from first to sixteenth in ship-
building output.
2. Of the 965 (as against 1300 fifteen years ago)
privately-owned vessels in the fleet today, 682,
or about 70%, are 20 years old or older. Even the
subsidized operators currently have 158 vessels,
or 49% of their fleet in the over-age category.
3. On the other hand, 80% of the ships in the Russian fleet
are less than 10 years of age.
4. Russia will become a dominant maritime power by
1970. She is producing approximately 125 ships per
year or one million deadweight tons. By the end of
1970 she will have a fleet of some 15 million dead-
weight tons.
5. Russia had 556 large me rchant vessels under construction
in 1966 totaling 4.5 million deadweight tons.
6. In 1965 she spent over $600 million for construction
of merchant ships while the United States spent under
$150 million.
7. Deliveries of new ships are running about 8 to 1 in
Russia's favor. Ships under construction are running
11 to 1 in tonnage.
Mr. Lon Woodbury - 2.
8. Over the past 16 year period Russia gained approximately
1,000 in total number of ships, while the United States
decreased by 900 ships.
9. She transports 75 percent of her own foreign commerce
in Russian bottoms while the United States carries
only 5.7 percent in U.S. flag merchant ships.
10. The Russian shipbuilding program expends between
$600 million to $700 million annually against
approximately $100 million in the United States.
11. The real danger in this Russian fleet build-up will
be their capacity to disrupt and control international
trade.
B. In spite of its deterioration, the American-flag merchant
fleet contributes significantly to the nation's commerce
and is the fourth arm of defense.
1. The private fleet's value to the military and its performance
in World Wars I and II, Korea, and Vietnam are well
known.
2. Despite the statements of Secretary of Defense
McNamara in 1962 to the effect that almost all military
personnel would be in the future transported by air,
the merchant fleet with its overage ships has carried
approximately 65% of the military personnel and 96%
of the materiel to Vietnam.
3. The American-flag merchant fleet contributes approximately
$900 million annually toward the improvement of our
national balance-of-payments account.
4. This impressive contribution is amassed on the carriage
of only about 5.7% of our trade in American bottoms.
5. If the American-flag fleet were to carry about 30%
of our foreign trade there would not be any balance-
of-payments problem.
II. There is great potential political benefit to be gained from such
support.
A. The large number of voters involved.
Mr. Lon Woodbury - 3.
1. The SIU (AFL-CIO Maritime Trade Department)
has a six million man membership.
2. The NMU (AFL-CIO Maritime Committee - NMEBA,
ARA, ILA, MM&P, I.U. of Marine and Shipbuilding
Workers) numbers about 350-400 thousand voters.
3. Numerous other unionized employees connected with
supplying components to ships such as the steel
workers, the iron workers and the electricians.
4. The large numbers of employees connected with the
management side of the maritime industry.
B. Considerable industry political activity on Capitol Hill
and elsewhere,
1. Paul Hall's Maritime Trades Department is a powerful
lobby. Apparently they delivered the deciding vote to
break the Senate filibuster on P.L. 90-284, the Civil
Rights Act.
2. These unions mentioned above make heavy political
contributions.
III. The maritime industry is particularly susceptible at this time
to a change.
1. The Administration promised a new maritime program
in the 1965 State of the Union Message.
2. For three years the Administration reneged on this
promise.
3. The antagonism between the industry and Secretary of
Transportation Boyd.
4. The Administration's long-awaited Maritime Program
presented by Secretary Boyd on May 20, 1968, which
is completely unacceptable to the industry.
5. Congressman Gerald Ford's suggestion at a Maritime Trades
Department luncheon in December 1967 to the effect that if
the Republicans win in November 1968 the maritime industry
can expect better things.
Mr. Lon Woodbury - 4.
6. Congressman Pelly's (R-Calif) recent statement that the Republican
Platform would have a plank devoted to an improved maritime
policy and program.
7. The Democrats are particularly vulnerable on this issue.
8. It is inconceivable that the Government, in the last analysis,
will allow the American merchant fleet to disappear. Thus,
Mr. Nixon may as well get the credit for its salvation.
Document source description
This file contains:
Memo from Ken Khachigian to Key Issues Committee concerning housing. 5 pgs. [Memo], 10/22/1968
The Relocation and Assistance Act of 1968 in the Congressional Record- House. 2 pgs. [Report], 5/29/1968
A Plan for Urban Home Ownership from the Republican Coordinating Committee. 2 pgs. [Report], 12/11/1967
Housing and Urban Development Act of 1968 in the Congressional Record-Senate. 19 pgs. [Report], 5/24/1968
The Omnibus Housing Bill Contains Many Proposals Sponsored by the Minority in the Congressional Record-House. 3 pgs. [Report], 7/1/1968
Here's the Issue Volume 7, Number 6. The Housing and Urban Development Act. 6 pgs. [Newsletter], 4/5/1968
Differences Between Rent Certificate Program (GOP) and Rent Supplemental Program (Dem.). 1 pg. [Report], n.d.
Memo from Casey Ireland, Minority Staff Member, to William Widnall. RE: Presidential Instructions to HUD to More Than Double Production of Low Income (Public Housing) Units. 4 pgs. [Memo], 9/23/1968
Press conference transcript of Robert Weaver, Secretary, Housing and Urban Development and Joseph Califano, Assistant to the Pressident. 7 pgs. [Report], 9/12/1967
Tomorrow's Transportation. Department of Housing and Urban Development. 100 pgs. Only cover scanned. [Book], 1968
Airport Development Act of 1968 in the Congressional Record- Senate. 3 pgs. [Report], 6/13/1968
Lots of Luck in the Congressional Record-House. 2 pgs. [Report], 6/4/1968
Memo from Ernest Corrado, American Merchant Marine Institute to Lon Woodbury. Subject: Reasons for Mr. Nixon's Support of Positive and Creative Maritime Policy and Program. 4 pgs. [Memo], 6/4/1968
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"ocrText": "Richard Nixon Presidential Library\nWhite House Special Files Collection\nFolder List\nBox Number\nFolder Number\nDocument Date\nDocument Type\nDocument Description\n17\n10\n10/22/1968\nMemo\nMemo from Ken Khachigian to Key Issues\nCommittee concerning housing. 5 pgs.\n17\n10\n05/29/1968\nReport\nThe Relocation and Assistance Act of 1968\nin the Congressional Record- House. 2 pgs.\n17\n10\n12/11/1967\nReport\nA Plan for Urban Home Ownership from the\nRepublican Coordinating Committee. 2 pgs.\n17\n10\n05/24/1968\nReport\nHousing and Urban Development Act of\n1968 in the Congressional Record-Senate. 19\npgs.\n17\n10\n07/01/1968\nReport\nThe Omnibus Housing Bill Contains Many\nProposals Sponsored by the Minority in the\nCongressional Record-House. 3 pgs.\n17\n10\n04/05/1968\nNewsletter\nHere's the Issue Volume 7, Number 6. The\nHousing and Urban Development Act. 6 pgs.\nFriday, May 22, 2009\nPage 1 of 2\nBox Number Folder Number\nDocument Date\nDocument Type\nDocument Description\n17\n10\nn.d.\nReport\nDifferences Between Rent Certificate\nProgram (GOP) and Rent Supplemental\nProgram (Dem.). 1 pg.\n17\n10\n09/23/1968\nMemo\nMemo from Casey Ireland, Minority Staff\nMember, to William Widnall. RE:\nPresidential Instructions to HUD to More\nThan Double Production of Low Income\n(Public Housing) Units. 4 pgs.\n17\n10\n09/12/1967\nReport\nPress conference transcript of Robert\nWeaver, Secretary, Housing and Urban\nDevelopment and Joseph Califano, Assistant\nto the Pressident. 7 pgs.\n17\n10\n1968\nBook\nTomorrow's Transportation. Department of\nHousing and Urban Development. 100 pgs.\nOnly cover scanned.\n17\n10\n06/13/1968\nReport\nAirport Development Act of 1968 in the\nCongressional Record- Senate. 3 pgs.\n17\n10\n06/04/1968\nReport\nLots of Luck in the Congressional Record-\nHouse. 2 pgs.\n17\n10\n06/04/1968\nMemo\nMemo from Ernest Corrado, American\nMerchant Marine Institute to Lon Woodbury.\nSubject: Reasons for Mr. Nixon's Support of\nPositive and Creative Maritime Policy and\nProgram. 4 pgs.\nFriday, May 22, 2009\nPage 2 of 2\n1000:\nOUEX\nONLY\nTO: KEY ISSUES COMMITTEE -- ATTENTION JERRY FRIEDHEIM AND CHUCK COLSON\nFROM: KEN KHACHIGIAN -- OCTOBER 22, 1968\nHERE IS THE HOUSING STATEMENT. THERE IS A RUSH ORDER ON\nTHIS, AND IT HAS ALREADY GONE OUT TO THE RN TOUR. I WOULD APPRE-\nCIATE IT IF KIC COULD GIVE IT QUICK SUBSTANTIVE REVIEW FOR ANY\nPOSSIBLE ERRORS. IT HAS BEEN CLEARED THROUGH ALL PARTIES ON THIS\nEND.\nEARLIER THIS YEAR, IN A NATIONWIDE RADIO ADDRESS, I TALKED ABOUT\nSTEPS WHICH COULD BE TAKEN TO ATTACK THE PROBLEMS OF SLUM HOUSING.\nRATHER THAN SPENDING HUNDREDS OF MILLIONS TO CLEAR MORE SLUM ACHES,\nTO DISPLACE MORE FAMILIES, AND TO BUILD MORE PUBLIC HOUSING, I\nOUTLINED IMAGINATIVE ENLISTMENT OF THE PRIVATE AND THE INDEPENDENT\nSECTORS, ENCOURAGEMENT OF PRIVATE OWNERSHIP, AND DEVELOPMENT OF THE\nPRIDE THAT CAN ONLY COME FROM INDEPENDENCE.\nTODAY, I WANT TO EXPAND UPON THAT DISCUSSION AND PROPOSE A PROC\nWHEREBY AE CAN, BEGIN THE TASK OF REBUILDING THE CENTER OF THE AMERI-\nCAN CITY\nTHE CONTINUED DETERIORATION OF AMERICAN CITIES, THE ENTRAPMENT OF\nDISADVANTAGED AMERICANS IN UGLY GHETTOS AND THE CIVIL DISORDERS OF\nRECENT YEARS UNDERSCORE THE FAILURE OF THE OLD WAYS. THE JOHNSON-\nHUMPHREY ADMINISTRATION HAS MADE PROMISES WHICH HAVE NOT--AND IN\nMANY CASES COULD NOT--BE KEPT. MY ADMINISTRATION WILL END THE GAP\nBETWEEN PROMISE AND PERFORMANCE.\nDESPITE THE VOLUMINOUS AMOUNT OF HOUSING LEGISLATION ENACTED INTO\nLAW OVER THE YEARS, THERE HAS BEEN RELATIVELY LITTLE PROGRESS TOWARD\nA TRUE WORKING PARTNERSHIP BETWEEN THE GOVERNMENT AND PRIVATE INDUS-\nTRY IN THIS AREA. OUR PRESENT NEED, THEREFORE, IS FOR A GREATER\nVOLUME OF HOUSING PRODUCTION UNDER EXISTING LAWS RATHER THAN A\nVOLUME OF NEW LEGISLATION.\nTHE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, THOUGH CHARGED WITH\nENCOURAGING THE MAXIMUM CONTRIBUTION OF PRIVATE CONSTRUCTION AND\nFINANCE TOWARD URBAN PROBLEM-SOLVING, HAS BECOME ENTANGLED IN AD-\nMINISTRATIVE CHAOS. ITS POLICIES AND ATTITUDES HAVE DI SCOURAGED,\nRATHER THAN ENCOURAGED, THE FULL INVOLVEMENT OF PRIVATE ENTERPRISE\nIN OUR URBAN HOUSING PROGRAMS.\nMY ADMINISTRATION WILL APPROACH THIS PROBLEM ON TWO BROAD FRONTS.\nFIRST, WE WILL BEGIN BY REVIEWING AND EVALUATING EXISTING FROGRAMS\nAND THEN ALLOCATE PRIORITIES TO THOSE PROGRAMS WHICH HAVE THE GREAT-\nEST POTENTIAL FOR PRODUCING THE HOUSING THAT IS SO URGENTLY NEEDED IN TE\nBLIGHTED NEIGHBORHOODS OF OUR CITIES. AVAILABLE FUNDS MUST BE\nCONCENTRATED ON THE PROGRAMS THAT WILL PRODUCE THIS HOUSING. THE\nDEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WILL HAVE A MANDATE\nMY ADMINISTRATION TO ACHIEVE THIS GOAL.\nSECOND, MY ADMINISTRATION WILL ACT TO IMPROVE COMMUNICATION AND\nUNDERSTANDING BETWEEN THE PRIVATE HOMEBUILDING INDUSTRY AND HUD.\nINCENTIVE-DESTROYING RED TAPE AND THE PRESENT BOREAUCRATIC OBSESSION\nFOR MAKING EVERY DECISION AT THE FEDERAL LEVEL WILL BE ELIMINATIO.\nWILL\n1\"\nAMOUNT\nwas\nCOPY\nXERO\nOBEX\n[083X\nBE LOOKED TO TO DEMONSTRATE HOW THE JOB CAN BEST BE DONE. THE\nIMPLEMENTATION OF THESE PROGRAMS WILL REFLECT AN AWARENESS THAT THE\nGREAT MAJORITY OF LOCAL PROBLEMS ARE BEST APPROACHED THROUGH LOCAL\nINITIATIVE, WITH ONLY SUCH INVOLVEMENT OF THE FEDERAL GOVERNMENT\nIN THE FREE ENTERPRISE PROCESS AS PROVES ABSOLUTELY NECESSARY.\n1\nKNOW, ALSO, IF FREE ENTERPRISE IS TO REALIZE ITS FULL POTENTIAL,\nTHERE MUST BE THE OPPORTUNITY FOR REASONABLE, HONEST PROFIT. TANSIBLE\nOINVOLVEMENT OF PRIVATE INVESTMENT AND PRIVATE INDUSTRY IN OUR ORBAN\nPROBLEMS WILL RESULT IF THE OPPORTUNITY FOR SUCH PROFIT IS MADE\nPOSSIBLE BY AN UNDERSTANDING GOVERNMENT. MOREOVER, THE STRUCTURE\nOF HUD AND ITE REGULATORY PROCEDURES MUST BE SIMPLIFIED IF OUR ORMAN\nPROGRAMS ARE TO BE TRULY WORKABLE. THE OVERLAPPING OF AUTHORITY\nFOR PROGRAM ADMINISTRATION MUST BE CORRECTED\nTHE ULTIMATE MEASURE OF SUCCESS IN OUR EFFORTS TO REBUILD OUR NATION'S\nDETERIORATED NEIGHBORHOODS AND TO PRODUCE THE HOUSING THAT SO MANY\nOF OUR CITIZENS URGENTLY NEED RESTS NOT ON LAWS ALONE. RATHER, IT\nDEPENDS HEAVILY ON THE EXTENT TO WHICH WE BRING ABOUT THE FULL\nINVOLVEMENT OF OUR NATION'S PRIVATE SECTOR AND ALL OF ITS PROVEN\nINITIATIVE AND MASSIVE RESOURCES IN SEEKING TO ACHIEVE OUR NATIONAL\nGOAL OF URBAN BETTERMENT.\nAS 1 HAVE INDICATED, THE FAILURE OF EXISTING PROGRAMS LIES IN THE\nLACK OF ALLOCATING PRIORITIES TO THOSE PROGRAMS WHICH HAVE THE\nGREATEST POTENTIAL FOR REBUILDING THE CENTER CITIS. ONE OF THE\nPRIORITIES OF A NIXON ADMINISTRATION WILL BE TO EMPHASIZE PRIVATE\nBOMEOWNERSHIP IN THE BLIGHTED AREAS OF OUR COUNTRY IT IS MY GOAL\nTO PROVIDE THE OPPORTUNITY THROUGH A COMBINATION OF PUBLIC AND\nPRIVATE EFFORT FOR MILLIONS OF DISADVANTAGED AMERICANS FOR THE FIRST\nTIME TO OWN THEIR OWN HOMES.\nSENATOR EDWARD BROOK HAS SUCCINCTLY STATED THE CASE FOR HOMEOWNER-\nSHIP:\nHOMEOWNERSHIP CAN BE OF FAR GREATER BENEFIT TO THE\nPOUR THAN 4 MERE ROOF AND FOUR WALLS. HOMEOWNERSHIP CAN BE F SOURCE\nOF PRIDE AND STABILITY, INFLUENCES THAT WILL EXTEND TO THE HOME-\nOWNER'S JOB AND FAMILY LIFE.' YET, AMONG NON-WHITES, ONLY 38 PERCENT\n(15 ALL HOUSING UNITS ARE OWNER-OCCUPIED WHILE 62 PERCENT ARE RENTED.\nI AM PROUD TO NOTE THAT REPUBLICAN MEMBERS OF THE SENATE AND HOUSE\nOF HEPRESENTATIVES GAVE THE TRUE INITIATIVE TO THE HOMEOWNERSHIP\nPRINCIPLE IN OUR HOUSING LEGISLATION. AND IN MY ADMINI STRATION\nTHAT INITIATIVE WILL BE CARRIED ON TO GIVE PRIVATE HOMEOWNERSHIP A\nGREAT IMPETUS.\nTHE TECHNIQUE OF THE CURRENT ADMINISTRATION IS TO PROMISE MORE\nFEDERAL MONEY, MORE URBAN RENEWAL AND MORE PUBLIC HOUSING. BUT The\nNUMBER OF HOUSING UNITS DESTROYED BY URBAN RENEWAL IS ESTIMATED\nTO BE FOUR TIMES GREATER THAN THE NUMBER CREATED.\nFEDERAL CONSTRUC-\nTION PROGRAMS DISPLACE ABOUT 73,000 FAMILIES AND INDIVIDUALS PER\nYEAR, AND YET, IN URBAN AREAS, 14 PERCENT OF ALL HOUSING UNITS ARE\nSTILL CONSIDERED SUBSTANDARD. AN ESTIMATED TWO-THIRDS OF THOSE\nDISPLACED BY URBAN RENEWAL PROJECTS ARE MINORITY GROUPS FOR WHOM THE\nPROBLEM OF RELOCATION IS OFTEN MOST DIFFICULT.\nEUSLIC HOUSTNA BY PTSKLE 11. 201 AN EFFECTIVE AWSWEN 10 THE WASSIVE\nPROPLEMS WHICH FACE OUR CITIES AND DEPRESSED RURAL AREAS. IT SIMPLY\nCANNOT BE BUILT FAST ENOUGH AND IN SUFFICIENT QUANTITIES TO MEET 008\nNATIONAL NEEDS. MOREOVER, PUBLIC HOUSING ONLY UPGRADES THE MATERIAL\nSURROUNDINGS WITHOUT GIVING ITS RESIDENTS THE SAME SENSE OF\nRESPONSIBILITY WHICH COMES FROM PRIVATE HOMEOWNERSHIP. ONE EXPERT\n\"DURING THE LAST THIRTY-ODD YEARS THAT THE NATION\nEXERO\n(083X)\n(083X\nXFRO.\n3\nINVOLVED IN THE HOUSING BUSINESS, IT HAS ONLY BUILT A LITTLE MORE\nTHAN 600,000 UNITS. THAT MEANS JUST ONE PERCENT OF THE NATION'S\nHOUSING SUPPLY HAS BEEN BUILT FOR ACCOMMODATION BY LOW AND MODERATE\nINCOME FAMILIES.\nONE SOLUTION TO THESE PROBLEMS -- AND SOMETHING TO WHICH I WILL GIVE\nPRIORITY IN MY ADMINISTRATION -- LIES IN TAKING THE HOMEOWNERSHIP\nPRINCIPLE AND EXTENDING IT INTO THE CENTER OF OUR URBAN AREAS. 17\nGIVEN THE PRIORITY IT REQUIRES, IT WILL CONVERT TENANTS INTO HOME-\nOWNERS. IN THE MULTI-UNIT DWELLINGS WHICH DOMINATE THE HOUSING IN\nOUR CITIES, HOMEOWNERSHIP CAN BE BROUGHT ABOUT THROUGH THE USE OF\nAN AGE-OLD, BUT NEGLECTED, CONCEPT OF TENURE: THE CONDOMINIUM.\nTHE MODERN CONDOMINIUM IS AN APARTMENT HOUSE WHOSE RESIDENTS ENJOY\nEXCLUSIVE OWNERSHIP OF THEIR INDIVIDUAL APARTMENTS MUCH IN THE SAME\nMANNER AS DOES THE OWNER OF A SINGLE FAMILY DWELLING. THE GOALS OF\nCONDOMINIUM, A FORM WHICH IS SAID TO PRE-DATE CAESAR, HAVE REMAINED\nCONSTANT: TO ENABLE PEOPLE IN APARTMENT HOUSES TO ACHIEVE THE ADVAN-\nTAGES NOW AVAILABLE TO HOMEOWNERS. THE CONDOMINIUM ALSO ENCOURAGES\nDEMOCRATIC PARTICIPATION IN PLANNING THE AFFAIRS OF THE COMMUNITY.\nIT PROVIDES, AS DID OUR TOWN MEETINGS IN THE EARLY DAYS OF THE\nREPUBLIC, THE FOUNDATION FOR BROADER PARTICIPATION IN THE COMMUNITY.\nTHE CONDOMINIUM -- WHICH IS A \"HIGH-RISE HOME\" -- IS NOT ENTIRELY\nNFW AS A TOOL FOR LOW-INCOME ROMEOWNERSHIP. NOTABLE EXAMPLES OF\nTHE USE OF CONDOMINIUM EXIST IN BOSTON, CHICAGO, AND LOS ANGELES AND\nOUR OTHER MAJOR CITIES. THE EXPERIENCE IN LOS ANGELES GOES FAR\nTO SHOW HOW WE CAN BEGIN TO BREAK THE POVERTY CYCLE. THERE, PRIVATE\nINDUSTRY, WITH ASSURED FINANCING, HAS INVOLVED THE CONSTRUCTION OF\nSO-CALLED \"TOWNHOUSE CONDOMINIUMS\" IN A MODEL 10-UNIT PILOT PROJECT.\nTHE WORK AND SUCCESS OF MANY OF THESE PROJECTS SHOULD BE WIDELY\nCOPIED\nWE DO NOT NEED GREATER VOLUMES OF NEW LEGISLATION;\nWE NEED MORE\nPRODUCTIVE USE OF THE LEGISLATION WE NOW HAVE. IT IS TIME\nWE SOUGHT TO EXTRICATE OURSELVES FROM A LOW-INCOME HOUSING POLICY\nWHICH CREATES AND MAINTAINS TENANTS, AND OVERLOOKS THE INTRINSIC\nBENEFITS WHICH FLOW FROM INDIVIDUAL HOMEOWNERSHIP. AS A COMMUNITY\nLEADER IN ONE NEIGHBORHOOD OF SUBSTANDARD HOUSING IN NEW YORK CITY\nHAS STATED: \"PEOPLE MUST HAVE INCENTIVE. THEY MUST HAVE PRIDE. AND\n#ITHOUT THESE TWO THINGS, THERE IS NO REHABILITATION. I THINK THAT\nTHE GOAL SHOULD BE TO MAKE THESE PEOPLE PROPERTY OWNERS RATHER THAN\nJUST TRANSIENT TENANTS MOVING AWAY EVERY FEW WEEKS.\" MY ANSWER TO\nTHAT NEED IS A CONCERTED EMPHASIS ON THE \"HIGH-RISE HOME\" WH. CH WILL\nGO FAB TO PROVIDING THE SENSE OF PRIDE WHICH COMES FROM HOMEOWNER-\nSHIP.\nOVER 100 YEARS AGO, THE REPUBLICAN PARTY PIONEERED THE HOMESTEAD\nLAWS. THIS LEGISLATION OPENED AMERICAN FRONTIERS, NOT ONLY\nGEDGRAPHICALLY, BUT POLITICALLY AS WELL. PEOPLE MOVED WEST TO STAKE\nOUT THEIR HOMESTEAD. THEY ACQUIRED PRIVATE PROPERTY IMPROVED\nTHE PROPERTY. THEY BUILT THEIR OWN COMMUNITIES--DEVELOPED THEIR 0%9\nCOMMITY FACILITIES, SCHOOLS, HOSPITALS--AND AS PRIVATE HOMED @NPRS,\nPASY JOINED THE WAINSTREAM OF THE GREAT AMERICAN PRIVATE ECOGOMIC\nSYSTEM I SAY THAT YEARS LATER-WA MUST DO THE SAMP 1.1\nCPN DENS OF AMERICAN CITIES. WE MOST PROVICE \"HOMESTEADS\" FOR THONK\nAMERICAN FAMILIES PRESENTLY LIVING IN DEPLORABLE SUBSTANDARD CONDI-\nTIONS AND ALIENATED FROM SOCIETY.\n10001\nочзх\n(OUE)\n(OUJX\nXEDO:\n4\nAS PRIVATE HOMEOWNERS WITH A STAKE IN THEIR COMMUNITY, A PIECE OF\nTHE ACTION AND A RESPONSIBLE VIEW TOWARD THE STATE OF THEIR COUNTRY,\nTHEY WILL REBUILD THE CITIES--IT WILL BE THEIR SPIRIT. AND THEIR\nCONCERN, AS IT WAS WITH THE FRONTIERSMEN 100 YEARS AGO. THEY WILL\nREESTABLISH THE PRIDE AND THE DIGNITY OF OUR NATION'S CITIES.\nTHOMAS JEFFERSON KNEW WHAT THIS SENSE OF PRIDE MEANS: \"IT IS NOT\nTOO SOON TO PROVIDE BY EVERY POSSIBLE MEANS THAT AS FEW AS POSSIBLE\nSHALL BE WITHOUT A LITTLE PORTION OF LAND. THE SMALL LANDHOLDERS\nARE THE MOST PRECIOUS PART OF THE STATE.\nTHE CENTRAL PRINCIPLE OF A NEW FEDERAL HOUSING POLICY MUST BE TO\nHELP PEOPLE RATHER THAN JUST CONSTRUCT BUILDINGS. THE CONDOMINIUM\nIDEA EMBODIED IN \"HIGH-RISE HOMES\" CAN GO FAR TOWARD HELPING US\nACHIEVE THAT END.\nEND\nAJOJ\nOUJX\n083X\n[OUDX\nOd Jx\nRN Y\nJGT WASH\nTO: ALAN GREENSPAN\nFROM: CHUCK COLSON\nRE: MY CONVERSATION WITH KHACHIGIAN ABOUT HOUSING STATEMENT.\nKHACHIGIAN SAID THAT HE ELIMINATED ALL OF THE DETAILS ON\nTHE CONDOMINIUM PLAN BECAUSE HE THOUGHT THEY WERE TOO LONG AND\nDETAILED, BUT SUGGESTED THAT IF I COULD WRAP IT UP IN ONE PARAGRAPH\nAND ADD IT TO THE STATEMENT, I SHOULD DO SO. I THINK IT SHOULD BE\nDONE IN ORDER TO GIVE THE STATEMENT A LITTLE MORE MEAT AND SOMETHING\nNEW AND SUBSTANTIVE. ALSO IT IS IMPORTANT AS A WAY OF SHOWING\nTHAT RN HAS THOUGHT THROUGH SPECIFICALLY HOW THIS PARTICULAR\nPROPOSAL MIGHT WORK. I SUGGEST THEREFORE THE FOLLOWING PARAGRAPH.\nTHIS PARAGRAPH SHOULD COME RIGHT AFTER THE CONDOMINIUM PARAGRAPHS\nAND IMMEDIATELY BEFORE THE PARAGRAPH WITH BEGINS:\n\"WE DO NOT NEEL\nGREATER VOLUMES OF NEW LEGISLATION\n\"TO THIS END, I WILL PROPOSE THE CREATION OF A LOW COST PRIVATE\nHOMEOWNERSHIP INDEPENDENT GOVERNMENT CORPORATION TO WORK WITH\nPRIVATE BUILDERS AND DEVELOPERS AND TO ENCOURAGE THE FLOW OF\nPRIVATE CAPITAL. THE FUNCTION OF THIS CORPORATION WILL BE T)\nPROVIDE AN INTEREST DIFFERENTIAL SO THAT PRIVATE LENDERS MAY LOAN\nAT INTEREST RATES WHICH LOW INCOME FAMILIES CAN AFFORD AND T)\nGUARANTEE THE FULL AMOUNT OF LONG TERM MORTGAGES FOR ELIGIBLE\nPURCHASERS. UNDER THIS PLAN, THE PRINCIPAL REPAYMENT WOULD BE\nSPREAD OVER 25 YEARS WITH MORTGAGE PAYMENTS SPREAD OVER A FULL\n30 YEARS SO THAT IN THE LAST 5 YEARS OF THE LIFE OF THE MORTGAGE,\nTHE GOVERNMENT WOULD RECOVER A SUBSTANTIAL PORTION OF THE INTEREST\nSUBSIDY AND GUARANTEE COSTS. SUCH A PLAN WOULD PROVIDE THE OPP-\nORTUNITY FOR HOMEOWNERSHIP TO HUNDREDS OF THOUSANDS OF FAMILIES\nNOW UNABLE TO PURCHASE THEIR OWN HOMES; AND THIS COULD BE\nACCOMPLISHED AT MINIMUM COST TO THE FEDERAL TREASURY.\nBEGINNING OF THE NEXT PARAGRAPH SHOULD START: THE SOLUTION\nTO OUR PROBLEMS LIES NOT ALONE IN NEW LEGISLATION BUT IN THE MORE\nPRODUCTIVE USE OF THE LEGISLATION VE NOW HAVE.\n1101 THE WHILE. THE STATEMENT 15 A FIRST RATE JOB.\nFND.P\nMay 29, 1968\nCONGRESSIONAL RECORD HOUSE\n4451\nSo at least it was with Louis Clifford who\nTwo weeks ago Louie received from doc-\nstreets. Such a situation is not civil lib-\nfrom 1943 until his death Saturday at 61 was\ntors the sad news that he had inoperable\nerty.\ncity editor of The Press.\nheart disease. On Dec. 13 he had lost his\nAs one who often expressed admiration for\nbrother Robert, also a Press veteran, to\nAll too often have we seen the rights\nsuch a flamboyant performer as the old\nheart disease, and the word about himself\nof the criminal upheld and ringed with\nCleveland News, a man who boisterously\nshook him up.\nironclad legal protections while the\nscolded his staff, Louie was unfailing quiet\nBut he returned to work at the city desk,\nrights of the upright, the honest, and\nand considerate, even when pressures were\nto make up his inind what to do. The alter-\nthe weak are trod upon with impunity.\nmost intense.\nnatives were varied. He could have retired\nTherefore, I question the wisdom and the\nSpeaking in 1961 at the Indiana University\nto a life of ease, which he said was not at-\npropriety of statements of some Mem-\nPress Institute seminar, Louie paid his re-\ntractive. He could have taken a less de-\nbers of this body, as reported in the\nspects to Bergener in these words:\nmanding assignment.\n\"I was on the police and the criminal\n\"I'll take next week off and decide what\npress, that the Omnibus Crime Control\ncourts beats most of my four years of ap-\nI'm going to do,\" he told a close friend.\nand Safe Streets Act of 1968 will be\nprenticeship under Mr. Bergener. He was a\nHe died as he was starting that vacation.\nkilled or blocked unless certain provi-\ncussing, shouting, reporter-insulting, hard-\nsions are eliminated. If anyone ques-\nboiled individual for whom despite his\ntions those provisions, I can understand.\ncussedness, I bore a tremendous amount of\nOMNIBUS CRIME CONTROL AND\nIndeed, if anyone fights for the elimina-\nadmiration and even a trace of affection.\"\nSAFE STREETS ACT OF 1968\ntion of those provisions, I can under-\nIt was not often that Louie revealed as\nmuch as that about himself, SO it is worth\n(Mrs. KELLY asked and was given\nstand. But for anyone to arrogantly state\nnoting that he was almost the exact opposite\npermission to extend her remarks at this\nthat the entire legislative package will\nof his mentor. And after four years of such\npoint in the RECORD and to include ex-\nbe sacrificed is, to me, unacceptable.\ndriving, in spite of the nostalgia he expressed\ntraneous matter.)\nI have stood in the well of the House\nmore than three decades later, he came to\nMrs. KELLY. Mr. Speaker, it is a dis-\non many occasions to support this bill\nThe Press for his career.\ngrace to our country that crime has be-\nand other measures to provide a greater\nVery few of today's editorial staff at The\nPress have any recollection of Louie as a beat\ncome a national concern and is con-\ndegree of security to our citizens and the\nreporter or rewrite man. Those who do say\nstantly increasing. Public order should\nmeans of providing such security. I be-\nhe performed in these fundamentals with\nbe the first business of government. Law\nlieve that I speak for my constituents\ngreat skill and discrimination. He covered\nenforcement is essentially a local prob-\nwhen I say that I do not want to see\nboth police and courts during the exciting\nlem and must be dealt with locally. How-\nall of our work go for naught.\nlawlessness of prohibition.\never, when lawlessness reaches into every\nhave studied the Senate amendments\nWhen he talked at Indiana University, he\nspoke highly of the competitive days when\nsection of the country, then it becomes\nto the safe streets bill, I have listened\nThe Press and the old News were eyeball to\na national problem. Congress must heed\nto many lawyers arguing the pros and\neyeball every edition every day. Such compe-\nthe cry of all our citizens by enacting an\ncons of them and I have taken note of\ntition, he said, sharpened the staff and its\neffective anticrime program.\nthe fact that there are many distin-\nproduct by the hour.\nIt is for this reason that I view as par-\nguished members of the bar in the other\nBut he also said:\nticularly unfortunate the House's failure\nbody who supported those amendments.\n\"For the tremendous improvement in\nto complete action today on the omnibus\nHowever, I cannot support any frustra-\nnewspapers in the last 25 years I credit\ncrime control and safe streets bill. I am\ntion of the will of this House on the\nlargely two factors: The planning, prepara-\ntion and thinking ahead that go into the\nglad that the unanimous-consent request\nbasis of one's own personal constitutional\ndaily edition output, and the wide broaden-\nto send the bill to conference was re-\nviews. Such action by those who oppose\ning of the base of coverage.\"\njected by my colleagues, because it has\nthe Senate amendments are not in ac-\nLouie had a great deal to do with the\nbeen rumored in the press that such a\ncord with the democratic process.\ndevelopment of a more responsive and re-\nmove would have killed this much-\nI wish to call to the attention of this\nsponsible press. His contributions to modern\nneeded legislation. However, I had hoped\nbody some of the programs which would\njournalism have been widely recognized.\nthe House would have agreed to an im-\nEarly in his city desk career he was a\nbe eliminated by a preemptory rejection\nspeaker at the American Press Institute\nmediate discussion of the Senate amend-\nof the bill, including, first, funds to State\nat Columbia University on the training of\nments and final action before the Memo-\nand local governments for a variety of\nstaff. He returned later to lead a three-\nrial Day recess.\ntraining, study, and other programs for\nweek seminar on municipal affairs.\nAn article in the New York Times of\nthe improvement and strengthening of\nFor all his intense interest in the affairs\ntoday, May 29, 1968, reemphasized the\nlaw enforcement at the local and State\nof Cleveland, he made only infrequent and\nimmediate need for this legislation by\nlevels; second, Federal control of wire-\nhighly selective public appearances. But\nrelating that the increase of crime in\ntapping: and third, firearms control.\nquietly he accepted civic responsibility, de-\nvoting his own time and attention.\nApril in New York City alone was 27\nI think it foolhardy for this body not\nHe was a member of the Euclid Charter\npercent, as reported by the New York\nto act merely because of the intransi-\nCommission, which a few years back re-\nCity Police Department and the Federal\ngence of those who oppose certain amend-\nvamped and notably stabilized the govern-\nBureau of Investigation.\nments enacted by the other body. There-\nment of that city. He was a member for\nThe substance of the Omnibus Crime\nfore, I urge the House Judiciary Com-\nseveral years of the Euclid-Glenville Hos-\nControl and Safe Streets Act of 1968\nmittee to ponder anew the seriousness\npital Board, during its time of greatest\nis long overdue. Although legislation is\nexpansion.\nof the crime situation in this country and\nLouie also was a sentimentalist. On a\nnot always perfect, this does not give\nto expedite House debate and action on\nvacation five years ago, Louie came upon\nany one Congressman or any one com-\nthis bill. SO that the people of this coun-\nRev. Fr. Albert Schmidt in his poverty parish\nmittee the right to delay or to sacrifice\ntry can be reassured that we are interest-\nof 6000 hill people at Ponce, Puerto Rico.\nlegislation because of possible objec-\ned in their safety and security.\nLouie wrote a fistful of stories, raising sub-\ntionable features. Disregard of the will\nstantial sums for the people.\nof the people and of this body's previous\nBorn in Wabash, Ill., Louie lived most of\nactions is, to me, unacceptable.\nTHE RELOCATION AND ASSISTANCE\nhis life in this community. In 1924 he gradu-\nI have long been a devoted and active\nACT OF 1968\nated from Cathedral Latin High School and\nentered immediately upon his newspaper\nsupporter of civil rights for all persons\n(Mr. RYAN asked and was given per-\ncareer. The family home is 22561 Edgecliff\nall minorities, and all groups. Support\nmission to extend his remarks at this\nDr. Euclid.\nfor civil rights has been and is my posi-\npoint in the RECORD and to include ex-\nHe was named 1965 Man of the Year by\ntion. I think, however, that in our zeal to\ntraneous matter.)\nCathedral Latin Alumni Assn., receiving a\nsupport individual rights, we have too\nMr. RYAN. Mr. Speaker, I have intro-\nscroll that called attention to his devotion\nfrequently confused the right of the\nduced H.R. 16953, the Relocation Assist-\nto church, family and The Press.\ncriminal with the rights of the public.\nance Act of 1968, in order to assist thou-\nHis surviving family are his wife Pat and\nIt is axiomatic that two of the most\nthree children, Dr. John E., professor and\nsands of Americans who are displaced\nhead of drama at Bradley University, Peoria,\nbasic rights of any citizen are his right\nevery year from their homes and places\nIll.; Mrs. Eugene (Donna) O'Donnell, Euclid,\nto be secure in his home and to walk\nof business as a result of construction\nand Thomas S., a teacher of physics at the\nthe street in safety. When those rights\nfacilitated by Federal programs. These\nGrosse Pointe, Mich., High School. There\nare not enforced, innocent hard-working\nprograms include urban renewal and\nare 8 grandchildren. A brother, Roland, also\ncitizens quail behind barred doors and\nother housing programs, highway con-\nsurvives.\nonly the denizens of the night stalk the\nstruction, university expansion, hospital\nH 4452\nCONGRESSIONAL RECORD\nMay 29, 1968\nconstruction, Federal facilities such as\nTIME FOR CONGRESS TO LOOK\nthis point in the RECORD and to include\npost offices, and a host of other programs.\nINTO THE CONTENTION OF\nextraneous matter.)\nOnly under the urban renewal program\nMAJOR LEAGUE BASEBALL OWN-\nare Federal funds provided for reloca-\nERS THAT THEY OPERATE A\n[Mr. OTTINGER'S remarks will ap-\ntion payments. and these are rarely\nSPORT AND NOT A BUSINESS\npear hereafter in the Extensions of Re-\nmarks.]\nadequate.\nIn previous years I have introduced\n(Mr. CABELL asked and was given\nlegislation to improve the relocation ben-\npermission to extend his remarks at this\nPRESIDENT JOHN FITZGERALD\nefits under urban renewal standards and\npoint in the RECORD and to include ex-\nKENNEDY SLIEVE COILETTE\nto require that construction may not be-\ntraneous matter.)\n(MOUNTAIN OF THE WOODS)\ngin until adequate relocation has been\nMr. CABELL. Mr. Speaker, once again\nDEDICATED TODAY BY PRESI-\nprovided-H.R. 1225, H.R. 1226, H.R.\nthe time has come for Congress to look\nDENT EAMON DEVALERA OF IRE-\n1227.\ninto the contention of major league base-\nLAND AT KENNEDY ANCESTRAL\nI have also introduced legislation to\nball owners that they operate a sport\nHOME\nIN\nDUNGANSTOWN,\nprovide that recipients of loans or grants\nand not a business. For it is becoming\nCOUNTY WEXFORD, ON 51ST\nfor construction under the Higher Edu-\nall too evident that what was once our\nBIRTHDAY OF LATE PRESIDENT\ncation Facilities Act of 1963-H.R. 1248-\nnational game has now become the\nmonopolistic province of a few profit-\n(Mr. BOLAND asked and was given\nor for hospital construction under the\nhungry, selfish men.\npermission to extend his remarks at this\nPublic Health Service Act-H.R. 1246,\nI am referring particularly to the\npoint in the RECORD and to include ex-\nH.R. 1247-be required to satisfy the Fed-\neral Government that relocation bene-\nMonday decision by National League\ntraneous matter.)\nclubowners in which two additional\nMr. BOLAND. Mr. Speaker. I would\nfits, similar to those available under the\nHousing Act of 1949, be provided.\ncities, San Diego in California and\nlike to call to the attention of my col-\nMontreal in Canada, were added in the\nleagues that at this moment on a beauti-\nH.R. 16953 would establish a uniform\nlatest of several league expansion moves.\nful green hillside in County Wexford,\nFederal relocation policy to be admin-\nistered by a central Relocation Assistance\nI have no prejudice against either of\nIreland, President Eamon DeValera is\nBureau, located in the Department of\nthe two cities, though it is interesting to\ndedicating a national forest and arbore-\nnote that one of them, San Diego, is in an\ntum in memory of a former Member of\nHousing and Urban Development. The\narea already supporting two other major\nthis House and the late President of the\nbasic standard of payment would be that\nleague clubs, while Montreal is not only\nUnited States. President John Fitzgerald\nwhich is now provided for persons and\nbusiness displayed by urban renewal ac-\noutside the boundaries of this country\nKennedy, on the anniversary of his 51st\ntion in section 114 of the Housing Act of\nand has not supported professional base-\nbirthday, May 29, 1917.\n1949, amended as follows: the ceiling on\nball of any sort in almost 8 years.\nMrs. Eunice Kennedy Shriver, sister of\ncompensated moving expenses would be\nOn the other hand, the Dallas-Fort\nthe late President and wife of U.S. Am-\nremoved; tenants would be paid the dif-\nWorth area is the 12th largest radio-TV\nbassador to France Sargent Shriver, and\nmarket in the Nation and is a big league\nMrs. Joan Kennedy, wife of Senator ED-\nference between former rentals and the\narea as shown by its support of the Dallas\nWARD M. KENNEDY, of Massachusetts, are\nrental in new comparable housing for\nCowboys in professional football, two\nrepresenting the Kennedy family and\nI year; in the case of businesses, cer-\nmajor golf tournaments, and many other\nplanting trees on the site during cere-\ntain losses of profit and goodwill would\ntop sporting events. In the Texas League\nmonies dedicating the President John\nbe covered; businessmen who could not\nFitzgerald Kennedy Slieve Coilette-\nfind suitable relocation sites would be\ntoday the Dallas-Fort Worth Spurs are\ncompensated for the fair market value\nconsistently among the leaders in at-\nMountain of the Woods-comprising 450\nof their trade.\ntendance records, though Dallas and\nacres overlooking the Kennedy ancestral\nPayments would be made directly to\nFort Worth would prefer to attend the\nfarmhouse in Dunganstown, County\nbig league contests they deserve.\nWexford.\nthe relocatees by the Bureau of Reloca-\ntion Assistance.\nIn times past, baseball owners have\nPresident DeValera and Prime Minis-\nMy bill also provides that no Federal\nmet all charges of monopoly by protest-\nter Jack Lynch were hosts at a reception\nagency shall approve an application for\ning that they are operating a sport and\nfor Mrs. Shriver and Mrs. Kennedy in St.\nnot a business and that their prime\nPatrick's Hall, Dublin Castle, last night,\nloan or grant assistance, nor undertake\nmotive is to expand only into those areas\nwhere they met with many of the Irish\ndirect construction without first identify-\ning persons to be relocated, informing\nwhere fans would be given an oppor-\nGovernment officials and members of the\nthem of their rights, and providing the\ntunity to attend a sport they cannot\ndiplomatic corps who welcomed Presi-\neasily see.\ndent Kennedy on his sentimental visit to\nDirector of the Relocation Assistance Bu-\nUnder this ruling, the National\nthe land of his forebearers 5 years ago,\nreau with information sufficient to per-\nmit the computation of relocation bene-\nLeague's decision does not hold water.\nJune 26-29, 1963.\nfits. All Federal grants, direct loan and\nNot only is a vast and untapped market\nMr. Speaker, it was my privilege to\nin Dallas-Fort Worth still without major\naccompany President Kennedy during his\ndirect construction programs are cov-\nleague baseball, but the adverse decision\nvisit to Ireland, and to the farmstead at\nered.\nis to benefit only one man-Houston's\nDunganstown, from which his great-\nH.R. 16953 charges the Director of Re-\nJudge Roy Hoffheinz-who makes little\ngrandfather, Patrick Kennedy, had emi-\nlocation Assistance with the responsibil-\neffort to cover his fear that a club in\ngrated to the United States over a cen-\nity of keeping a current file on all Fed-\neral assistance and construction pro-\nDallas would cut into his badly needed\ntury ago. The President's boyish enthu-\nAstrodome revenue.\nsiasm and obvious enjoyment was infec-\ngrams and the need for relocation assis-\ntance. It also requires that he take ac-\nBaseball can exist only as it pleases a\ntious and an official occasion became a\nsports-loving public, not because it is a\nhappy Kennedy family reunion as Mrs.\ntions to insure that individuals and busi-\nproducer of revenue for an overextended\nMary Kennedy Ryan and her family\nnessmen displaced as a result of feder-\npromoter.\nserved tea on tables covered with linen\nally aided activities be fully informed of\ntheir rights and given assistance in re-\nI do not believe it is the intention of\ncloths in the concrete farmyard between\nCongress to promote or to protect such\nthe whitewashed cabin, which was Pat-\nlocating. He is further required to coor-\nindividuals and I feel it high time for\nrick Kennedy's home before his depar-\ndinate his activities with other Federal\nthis Government to break up its partner-\nture in 1848 to East Boston, and the\nagencies.\nship with them.\nnewer grey-painted farmhouse.\nThis bill will finally provide a uniform,\nconsistent Federal relocation policy, re-\nThese recent actions raise anew the\nThe former Irish Prime Minister, Sean\ngardless of the program. It will insure\nquestion of monopolistic practices among\nF. Lemass, who welcomed President Ken-\nthat federally aided construction and\nbig league owners and I shall ask the\nnedy to Ireland in June 1963, and was\nacquisition will proceed with a minimum\nHouse Judiciary Committee to reopen\nthe President's guest at the White House\nits studies of this question. It is long\nin October 1963, said of President Ken-\nof injury and dislocation to citizens.\noverdue.\nnedy after the tragic assassination:\nI urge that hearings be held by the\nNaturally John Kennedy's Irish-American\nCommittee on Banking and Currency, so\nbackground quickened our interest in his\nthat we may act on this important legis-\n(Mr. OTTINGER asked and was given\ncareer and leadership. The rise to the august\nlation as soon as possible.\npermission to extend his remarks at\nposition of President of the United States of\nThe following statement was approved by the Republican Coordinating\nCommittee meeting in Washington, D. C., December 11, 1967\nA PLAN FOR URBAN HOME OWNERSHIP\nIn America today, there is no challenge more vital, and more difficult than\nmeeting the problems of our cities and their residents. We believe that any\nstrategy designed to solve these problems must include, as key elements, programs\nto help realize the goal of \"a decent home and suitable living environment for\nevery American\" -- the national goal enunciated by Congress in the landmark Housing\nAct of 1949. Republican leadership in the development and passage of this and\nnumerous other important housing measures reflects our belief in the fundamental\nimportance of housing to the well-being of our urban residents.\nThis year a Republican plan for home ownership has been sponsored by Senator\nCharles H. Percy of Illinois and Congressman William B. Widnall of New Jersey,\nwith wide endorsement of Republicans in both Houses of Congress. The purpose of\nthis program is to upgrade the quality of the nation's housing, to make home owner-\nship available to lower-income families who have or can develop the capacity to\naccept this responsibility, and to provide needed technical assistance to local\ncommunity organizations.\nThe central element of the plan is the establishment of a private non-profit\nNational Home Ownership Foundation which would raise funds through the sale of\nFederally guaranteed bonds to private lenders. The Foundation would have two\nmajor functions:\n* It would provide mortgage funds to non-profit, community organizations\nequipped to undertake a program of rehabilitation or construction of single or\nmultiple family housing units, to be sold in turn to individual lower-income\nfamilies. In this way, private mortgage financing, private organizations, and\nlocal initiative would be mobilized to make home ownership a reality to many for\nwhom the means are unavailable today. Federal funds would be used only to provide\na partial interest subsidy to the homeowner, which would be repaid if later his\nincome increases. For each million dollars of continuing Federal interest subsidy,\nprivate home purchases of approximately $33 million could be supported.\n* It would provide, when necessary, technical assistance to the community\norganizations to enable them to undertake and manage a sound home ownership\nprogram. In addition, it would offer to help these organizations participate in\nor develop programs such as basic education, job training, credit counseling and\nother support skills for the prospective home buyer. In helping to supply these\ntools of successful home ownership, at the same time, the Foundation could provide\nthe service of aiding local organizations and individuals to find their way through\nthe present maze of government agencies and aid programs.\nAnother feature of the plan would provide for the establishment of a system\nof mortgage payment insurance through private companies, if possible, to protect\nhome buyers from foreclosures due to temporary interruption of income for causes\nbeyond their control. Also, should the owner decide to sell his property, any\ncapital gain would be his profit, after repaying the Foundation for the interest\nsupport he has received. This should encourage home improvements and proper\nmaintenance.\n(over)\n-2-\nThis new plan of action is a most imaginative and constructive approach to\nimproving the quality of our housing and the lives of lower-income families.\nUnder this plan the enormous resources, imagination, and strength of private\norganizations would be brought to bear against the problems of housing, particu-\nlarly in urban areas. The operations of the Foundation and community organizations\nwould encourage involvement of business, labor, the professions, universities,\nchurches, civic groups, and other non-profit organizations, whose talents and\nenergies for assisting in the solution of public problems have not been adequately\ntapped.\nGovernment activity would be limited to risk bearing through a Federal\nguarantee of the National Home Ownership Foundation's bonds, and limited financial\nassistance for the interest subsidy. The emphasis of government would be on these\nsupporting functions and away from direct operations and control.\nAlso, the residents of our blighted city areas would be encouraged to involve\nthemselves actively in self-help programs leading to better housing, improved\nskills, and economic advancement. Too often, present programs have failed to\ngenerate a sense of self-reliance and self-help which will permit a man to advance\nthrough his own efforts.\nCongressional hearings have evidenced a broadly based enthusiasm for this\nhome ownership measure among community organizations and private enterprise groups\nwho would be directly involved. We urge the Department of Housing and Urban\nDevelopment to withdraw its opposition; for increased home ownership deserves\nbipartisan support and early action from Congress on a broadly acceptable measure.\nThis home ownership plan typifies the innovative and imaginative approach of\nRepublicans to problems of housing and the urban environment, and demonstrates\nthe Republican Party's commitment to finding new solutions to the growing problems\nof our lower-income urban citizens. The States and cities can also demonstrate\ntheir initiative in this field. For example, the State of Pennsylvania has created\na housing agency to promote home ownership and rehabilitation to benefit the\nunderprivileged.\nThese proposals are testimony to our belief that individual dignity,\nself-help and the involvement of private organizations are indispensable\nprinciples in shaping solutions to the complex problems facing urban America.\n12/11/67\nS 6386\nCONGRESSIONAL RECORD\nHousing May 24, 1968\nvantage, or risk the danger of being trampled\nThe PRESIDING OFFICER. Is there\nbefore us today. One might say, then,\nunder the surge of unthinking feet-excited\nobjection to the present consideration of\nthat the committee has now spent some 8\nforward by careless power manipulators, peo-\nthe bill?\nmonths in bringing S. 3497 to the Senate.\nple whom I call 'militants of the absurb.'\nThe 47-year-old Negro leader said he was\nThere being no objection, the Senate\nMr. President, with the enactment of\ngoing to \"talk openly about the main sub-\nproceeded to consider the bill.\nthe National Housing Act of 1934, the\nject of private conservations since the trou-\nMr. SPARKMAN. Mr. President, before\nUnited States Housing Act of 1937, the\nble in D.C. I refuse to be 'chicken' and keep\nwe commence the debate on the Housing\nHousing Acts of 1949, of 1954, of 1961,\nmy thoughts in secret half-whispered dis-\nand Urban Development Act of 1968, S.\nthe Housing and Urban Development\ncussions.\n3497, I wish to make a brief comment.\n\"Let me tell it like it is. During the past\nAct of 1965, and the Demonstra-\nAs chairman of the Banking and Cur-\nwinter a young brown-skinned man (an ob-\ntion Cities and Metropolitan Develop-\nvious reference to militant Stokeley Car-\nrency Committee and also the Subcom-\nment Act of 1966, plus other measures,\nmichael), after a hate America trip around\nmittee on Housing and Urban Affairs, I\nthe Congress has provided many tools\nthe world, came to live in Washington,\nwish to express my appreciation to the\nwith which the American people have\nD.C. and in only a short time has really\nmembers of the committee as well as to\nbeen able to obtain decent, safe, and ade-\nshown us oldsters how to take over a city.\nthe members of the subcommittee for\nquate housing. These acts have also pro-\n\"He 'jived' many black leaders of many\ntheir cooperation and help in bringing\nvided ways and means by which our\nresponsible Negro organizations in this town,\nS. 3497 to the floor of the Senate. In this\neven some of the sweet old ladies at church.\ncities, towns, and communities have been\nconnection, Mr. President, I express my\n\"He's sympathized with our D.C. leaders'\nable and are now able to fight blight,\nfrustrations, he inflamed their resentments—\ngratitude to the members of the commit-\nslums, and urban decay.\nbut more importantly, he played up to their\ntee and the subcommittee for the won-\nIt must be remembered, however, that\negos. Then all were invited to a secret meet-\nderful cooperation they gave throughout\nthese acts taken as a whole, were never\ning. And publicly our leaders nodded agree-\nthe weeks-literally, throughout the\nintended to be the complete answer-the\nment to his plan to join forces and con-\nmonths-in considering this bill. I also\nsented to take titles of offices and to serve\nsole solution-to our national housing\nwish to express my appreciation and that\non black only committees.\"\nproblems nor to the multiplicity of prob-\nof the members of both the committee\nDr. Alexander asked where the militant\nlems we now find facing our cities. At\nand subcommittee to the staffs of the full\nleaders were \"when the time came.\"\nbest, these acts were intended to encour-\n\"None to my knowledge were seen doing\ncommittee and the subcommittee, as well\nage and contribute to private enterprise\nthe violent acts that they had earlier urged\nas to the Senate legislative counsel's\nand public efforts and initiative toward\non their poor black brothers.\"\noffice; namely, Mr. John Reynolds-for\nhelping our people to achieve the goal\nThe D.C. disturbance was a criminal action\nthe vast amount of work they did in the\nand not a riot, Dr. Alexander said, because\nexpressed in the policy of the Housing\npreparation of S. 3497 as well as in the\n\"the few percentage of blacks who took part\nAct of 1949, which is \"a decent home and\npreparation of Senate Report No. 1123 to\nput their sights more on what they saw in\nsuitable living environment for every\naccompany the bill.\nstore windows than on what Dr. Martin L.\nAmerican family.\"\nKing Jr. taught, lived and died for.\"\nI believe I can truthfully say that S.\nMr. President (Mr. GORE in the chair)\nChallenging the argument that only vio-\n3497 is the most comprehensive housing\nI shall digress long enough to say that\nlence seems to frighten the power structure\nand urban development bill our commit-\nthat housing policy was written into the\ninto turning more attention to the poor, Dr.\ntee has ever presented to the Senate. The\nAlexander said:\nact of 1949. At the time it was known as\nbill has 15 titles, with numerous sections\n\"This city or nation cannot allow the poor\nthe Taft-Ellender-Wagner Act. It was\nand subsections, which, on the one hand,\nto believe that it is necessary to burn a slum\nunder the guidance and leadership of\nestablish several new housing and urban\nhouse, the corner grocery store or clothing\nthose three distinguished pioneers in the\nstore to make Congress and the American\ndevelopment programs and, on the other\nfield of adequate housing that the goal\npublic aware that existing hunger in rat and\nhand, contain provisions amending the\nI have just quoted was established-\nroach-infested quarters is hell.\"\nmajority of housing and urban develop-\nthat there should be the opportunity to\nDr. Alexander spoke out against a racial\nment laws on the statute books today.\naspire to and hope for \"a decent home\nsplit-\"the only blacks that I know of who\nMr. President, S. 3497 is not a bill\nand suitable living environment for every\nreally want segregation are those who can't\nwhich the committee \"dreamed up\" over-\ncut the mustard in an integrated society\"-\nAmerican family.\" Of course, Senator\nnight. Quite to the contrary, S. 3497 rep-\nbut he urged that Negro men pool their\nTaft and Senator Wagner are no longer\nmoney to own stores, banks, hotels.\nresents a two-session effort on the part\nwith us, but the distinguished Senator\nof the committee. Senators will recall\n\"We have been dallying with the white\nfrom Louisiana [Mr. ELLENDER], who was\nman for years, but we can't fool him any\nthat, after some 4½ months of delibera-\nthe other member of that famous trio, is\nmore because he has woke up and gone and\ntion during the first session of the 90th\nstill one of our most active Senators and\ngiven us our civil rights. Now we must seek\nCongress, the committee reported on No-\none of our most active supporters of safe,\njustice-not generosity, not benevolence, not\nvember 28, 1967, the proposed Housing\nsanitary, and decent housing.\npity, not sympathy or handouts.\"\nand Urban Development Act 02 1967-\nUnder these acts, a great deal has been\nthat is, S. 2700. Congress, however, ad-\nachieved. Literally millions of families\njourned before S. 2700 could be consid-\nCONCLUSION OF MORNING\nhave been able to obtain decent places in\nered. As a matter of fact, S. 2700 is still\nBUSINESS\nwhich to live commensurate with their\npending on the Senate Calendar, al-\nneeds and at prices they are able to pay.\nMr. MANSFIELD. Mr. President, is\nthough it has now been outdated by S.\nIn fact, the FHA and VA housing pro-\nthere further morning business?\n3497, the bill which we commence to de-\ngrams alone have aided some 17 million\nThe PRESIDING OFFICER. Is there\nbate today.\nfamilies to obtain decent housing. Sev-\nfurther morning business? If not, morn-\nRather than proceeding to consider\neral thousand cities, towns and commu-\ning business is concluded\nS. 2700 early in the second session of the\nnities have been helped to rid themselves\nCongress, the decision was made that we\nof their worst slums and blight and have\nHOUSING AND URBAN DEVELOP\nshould hold that bill in abeyance until\nthus become better places in which to\nMENT ACT OF 1968\nthe administration submitted its pro-\nwork, play, worship, and live. One of the\nposals for 1968 housing and urban de-\nmost notable achievements has been the\nMr. MANSFIELD Mr President, I ask\nvelopment legislation.\ndevelopment of a mortgage insurance\nunanimous consent that the Senate pro-\nOn February 26, 1968, the President\nsystem with a Government guarantee and\nceed to the consideration of the un-\nsubmitted to the Congress a message on\na backup secondary mortgage market fa-\nfinished business.\nhousing and cities. Accompanying the\ncility, the results of which have largely\nThe PRESIDING OFFICER. The bill\nmessage were the administration's legis-\nbeen responsible for the rising homeown-\nwill be stated by title for the information\nlative proposals designed to implement\nership among the American people so\nof the Senate.\nthe President's message.\nthat today more than two-thirds own\nThe ASSISTANT LEGISLATIVE CLERK. A\nThe administration's proposed Hous-\ntheir own homes.\nbill (S. 3497) to assist in the provision of\ning and Urban Development Act of 1968\nHowever, from time to time serious\nhousing for low- and moderate-income\ncontained a majority of the basic ideas\ngaps have been noted in these acts. As\nfamilies, and to extend and amend laws\nthat were included in S. 2700. Therefore,\ntime went on, it was realized that many\nrelating to housing and urban develop-\nthe committee used S. 2700 as the basis\nprograms provided by these measures\nment.\nfor drafting the committee bill we have\nhave not reached down far enough to\nMay 24, 1968\nCONGRESSIONAL RECORD\nS6387\nhelp those who need housing the most.\nTITLE I-LOWER INCOME HOUSING\nrespectively, for a family with five or\nAlso, urban døvelopment programs were\nOne of the most important titles to\nmore persons.\nsometimes found lacking in the type of\nthis bill is title I which contains im-\nAuthority to enter into assistance pay-\nFederal support and assistance that was\nportant new provisions to help lower\nments contracts as approved in appropri-\nneeded at the local level to meet the fast\nincome families become homeowners.\nation acts is limited to $75 million for fis-\nchanging housing and urban develop-\nThere are nine sections to this title, the\ncal year 1969, $100 million for fiscal year\nment problems of the cities. Each time\nprovisions of which are varied but all\n1970 and $125 million for fiscal year 1971.\nthese gaps have been found or recog-\nare aimed at meeting a real need in our\nThis authority could result in contracts\nnized, steps have been taken to close\neconomy, that is, making it possible for\nfor assistance payments for a total of\nthem with either new or amended legis-\nlower income families to obtain decent\nnearly 500,000 units during the 3-year\nlation.\nhousing through homeownership. This\nperiod.\nLet me make it clear, however, that\nmatter was first considered last year and\nOther sections of this title also repre-\nwhile much success has been achieved\nfinally, after numerous conferences and\nsent significant proposals to make it\nover the last 35 years, this Nation still\nconsultations, the committee has brought\neasier for the lower income families to\nhas a long way to go in meeting total\nforth a package of legislative provisions\nbecome homeowners. One of the provi-\nhousing and urban development needs.\nwhich we confidently believe, once they\nsions would authorize the FHA to qualify\nIn the first place, our previous efforts\nare implemented, will represent another\nfor assistance a lower income family\nhave never been fully effective relative to\nmilestone in Federal assistance toward\nwho, under existing law, would be turned\nthe needs of the lower income people and,\nhelping lower income families of this\ndown because of marginal credit ex-\nsecondly, changing economic and social\nNation.\nperience or irregular income patterns but\nconditions have aggravated and worsened\nUnder existing law, the FHA and VA\nwho, it is found, is a satisfactory credit\nthe urban housing problem so that, de-\nprograms are very effective in helping\nrisk and would be capable of homeowner-\nspite existing programs, many inner city\nfamilies of moderate income obtain de-\nship with proper counseling.\nareas have deteriorated at a faster rate\ncent housing through homeownership.\nThis title also contains a provision\nthan ever before.\nIn fact, over the years, the laws have\nto authorize FHA to insure mortgages\nThe housing needs of the American\nbeen gradually liberalized SO that today\nfor families in the rundown neighbor-\npeople and the needs of the Nation's\nwe can proudly say that we are truly a\nhoods of our cities without regard to\ncities, towns, and communities are not\nnation of homeowners, largely because of\neconomic soundness requirements and\nsomething that can be defined, once and\nthe contribution made by FHA and VA.\nother limiting restrictions having in\nfor all time, at any given period. These\nHowever, as construction costs have\nmind the need for adequate housing for\nare ever-increasing needs of the low-\ngone up and interest rates have risen to\nfamilies in these areas. This would meet\nand moderate-income American family\nunprecedented heights, it has become\nthe criticism often levied at FHA on red-\nwhich must be faced almost on a day-\nmore and more difficult for families of\nby-day basis. What appeared to be a\nlining areas and its refusing insurance\nlow and moderate income to afford to buy\nsatisfactory solution to yesterday's prob-\na home of their own.\nonly because of the area.\nlem will be unacceptable today. On the\nSection 101 of this title is intended to\nA special risk fund would be estab-\nreverse side of the coin, it must be\nremedy this difficulty. Under this section,\nlished, not necessarily actuarially sound,\nrealized by all concerned that these are\nthe Federal Government would help re-\nwhich would be used to meet probable\nneeds that cannot be met on an over-\nduce the housing load on the family by\nhigher losses in the more risky insurance\nnight basis; fiscal and physical capabil-\npaying all but 1 percent of the interest\ncases that the Congress would be au-\nities are just not at hand to bring about\ncharges to finance the mortgage loan. To\nthorizing FHA to undertake.\nan immediate solution to all these prob-\nmake it fair for all, only lower income\nMr. President, I believe that it is about\nlems.\nfamilies would be eligible and each fam-\ntime the Congress realizes the dilemma\nMr. President, the President's housing\nily would pay 20 percent of its income for\nit has placed the FHA in under existing\nand cities message proposed a far-reach-\nhousing costs. Lower income families are\nlaw. On the one hand, FHA is required\ning goal to meet a massive national\ndefined as those whose incomes do not\nto run an actuarially sound operation\nneed-a program of Federal assistance\nexceed 70 percent of the income ceilings\nwith a minimum of losses while, on the\nfor the construction and rehabilitation\nestablished by the Secretary for a par-\nother hand, it gets criticized because it\nof 6 million housing units over a 10-year\nticular area in administering the FHA\nshies away from the marginal risk cases\nperiod for the low- and moderate-income\nbelow market interest rate program un-\nand from neighborhoods where private\nfamilies of this country. Such a program\nder section 221(d) (3). This income ceil-\nenterprise has indicated as \"off limits.\"\nwould replace the substandard units in\ning would vary from area to area but, in\nOur committee has taken a firm stand\nwhich it is estimated more than 20 mil-\ngeneral, it would be at the level of about\non this, both in the pending legislation\nlion Americans still live.\nthe lowest one-third of families on the\nand in the committee's report. We be-\nThe President's 1968 proposals for\nincome scale in any particular area. In\nlieve that FHA was established to take\nhousing legislation called for an initial\nmy home city of Huntsville, Ala., the in-\nrisks and to bear the burden of helping\n5-year program aimed at achieving the\ncome ceiling for families of five and six\nto provide decent housing for all but\n10-year goal of the message. The com-\npersons would be $4,900 per year. To per-\nthe poorest of our people no matter\nmittee certainly agrees that the Presi-\nmit flexibility and to make the program\nwhere they live in. We believe that each\ndent's 10-year goals are very admirable\nmore workable, some few families with\ncase should be examined on its merits\nand are necessary and the committee\nincomes above this could qualify also but,\nand, if it qualifies as a satisfactory risk,\nbelieves that these goals can be attained.\nin no instance, could more than 20 per-\nthe FHA should accept it. The Congress,\nIn order to do this, the committee is\ncent of the contracted funds be used for\nby these provisions of the bill, will be\nrecommending stepped-up activity under\nfamilies above this basic ceiling.\ncommitting itself to stand back of FHA\nexisting programs, as well as proposing\nThe committee also recommended an\nand help it truly perform the task it was\nnew programs to fill the gaps apparent\nallowance of $300 per minor child be\ncreated to do-that of providing the fi-\nunder existing programs. These programs\nmade in determining eligibility under the\nnancial backup needed to help lower\nwould be funded at levels to get a good\nincome ceilings and in determining the\nincome families obtain decent housing.\nstart toward the 10-year goal. However,\nminimum payment the family should pay\nThis title contains provisions for as-\nthe committee did not agree with the\non its own before Federal subsidy. Con-\nsistance to nonprofit sponsors SO that\nadministration's proposed 5-year pro-\nsidering the cost of raising a family these\nsuch sponsors can be effective in help-\ngram. It believes that another look\ndays, this is nothing more than an effort\ning lower income families obtain decent\nshould be taken at the progress of the\nto be fair and equitable for families with\nhousing. Also a Commission would be\nnew programs and current conditions\nchildren.\nestablished by this title to study and re-\nafter several years of experience and\nAnother feature of the interest sub-\nport back to Congress on better ways and\nthat a 3-year period would be more\nsidy provision for homeownership is the\nmeans to help house our lower income\nappropriate.\nlimitation on the maximum mortgage\nfamilies. And, finally, the title contains\nI would like now to describe in very\namount. In general, it would be limited\nauthority to establish a National Home\ngeneral terms the major highlights and\nto $15,000 but, in high cost areas, it could\nOwnership Foundation which would pro-\nproposals contained in the committee\ngo to $17,500. These ceiling amounts\nvide technical and limited financial as-\nbill.\ncould be raised to $17,500 and $20,000,\nsistance to private and public organiza-\nS6388\nCONGRESSIONAL RECORD SENATE\nMay 24, 1968\ntions desiring lower income families be-\nTITLE III-FEDERAL HOUSING ADMINISTRATION\nplicated matter, and, sooner or later,\ncome decently housed.\nINSURANCE OPERATIONS\nwhen local planning agencies get started\nTITLE II-RENTAL HOUSING FOR LOWER INCOME\nThis title contains 19 sections amend-\nin the demolition process and finally re-\nFAMILIES\ning existing law to improve and make\nmove the buildings, there is a vast\nTitle II, Mr. President, deals with\nmore effective existing FHA insurance\narea with nothing on it, and before it\nrental housing for lower income families.\nprograms. I said at the beginning that\ncan be redeveloped, many years may\nLet me say that section 201 of the title\nthe committee bill consisted of several\nhave passed. The provision we have in-\ncontains provisions similar to those\ntitles, and many provisions amending\ncluded in the committee bill would per-\nwhich I described in title I for home\nexisting law. That accounts in large part\nmit pursuing urban renewal undertak-\nownership. In other words, what we are\nfor the great volume of the bill we have\nings by smaller areas which could be\ntrying to do is to provide twin programs;\nreported. We are amending, by and large,\ndesignated as neighborhood develop-\nnamely, one for homeownership and one\nexisting legislation. Title III is one of the\nment programs. These smaller areas are\nfor rental opportunity for families of\ntitles containing many amendments to\na part of the whole which has been\nlower incomes, by having the houses\nexisting law.\nplanned but permits such areas to be\nbuilt by private enterprise with a sub-\nPerhaps the most significant action of\npursued with work and development in\nsidy going where necessary and to the\nthe committee relative to this title is its\na limited way rather than taking the\nextent necessary in order to make it pos-\nreport language outlining FHA's re-\nwhole.\nsible for the lower income families either\nsponsibility in providing housing for all\nThat, Mr. President, I may add, the\nto buy a home or to rent a unit.\neligible families of this Nation regardless\nneighborhood development programs\nwould be undertaken on an annual\nThis title is a companion title to title\nof the location of the property; also in\nI, but for rental housing rather than\nhelping to meet the need for better\nbasis. Let me cite an example right here\nhomeownership. Section 201 of this title\nfinancing provisions in the rehabilitation\nin Washington-familiar to all of us in\ncompares almost directly with section\nof existing housing in connection with\ndays not SO long past-when one of the\nurban renewal.\nworst slums in the world was right in\n101 in providing interest subsidy assist-\nance to lower income families in rental\nTITLE IV-GUARANTEES FOR FINANCING NEW\nthe shadow of the Capitol dome.\nCOMMUNITY LAND DEVELOPMENT\nI referred, of course, to the Southwest\nprojects. However, the renter would pay\nWashington area. I have been down\n25 percent of his income for housing\nThis title would establish a new Gov-\ncosts before receiving a subsidy. It is be-\nthere. I remember being in a little alley\nernment bond insurance system to help\nlieved that the 20 percent for a home-\nand looking up, and there was the great,\nfinance the acquisition and development\nmagnificent Capitol dome. It seemed\nowner would be equivalent to 25 percent\nof new communities. Under existing law,\nfor a renter because the homeowner has\nthe most ironic thing in the world that\nFHA is authorized to insure mortgage\nother costs which the renter does not\nright in the shadow of the dome of the\nloans used for this purpose. This au-\nhave, such as heat and maintenance. The\nCapitol of the mightiest nation in the\nthority was given in its present form in\nworld we had slums that were absolutely\nauthorization for assistance payments\n1966 but no mortgage has yet been in-\nincredible.\nwould be he same under this section as\nsured under it. The bond financing de-\nunder the section 101 homeownership\nFinally, the slum clearance program\nvice would be a much superior method\nunder old title I of the Act of 1949 was\nprovision. It has been estimated that ap-\nand should produce the financing at\nset up. I guess the urban renewal pro-\nproximately 700,000 units would be con-\nreasonable terms and with considerable\ngram in Southwest Washington was one\ntraced for under the moneys authorized\nflexibility to attract large private inves-\nof the earliest in the country. As I re-\nto be appropriated for this program-\ntors into this worthwhile endeavor.\nmember, the total area covered was 555\n$75 million for fiscal year 1969, $100 mil-\nTITLE V-URBAN RENEWAL\nacres. It took several years to get the\nlion for fiscal year 1970, and $125 million\nfor fiscal year 1971. These units would be\nThe most significant provision under\nbuildings torn down. In fact, it seemed\nthis title is section 501 establishing a\nlike it was going to be forever before any\nboth new construction and rehabilitated\nnew neighborhood development program\nnew buildings would be constructed in\nhousing units.\nas part of urban renewal. Under this\nthe area. Finally the buildings were\nTitle II also includes authorizations to\nprogram, an annual grant would be made\nstarted.\nextend the public housing and rent sup-\nto a city to carry out small area redevel-\nI remember saying to the director of\nplement programs through fiscal year\nopment with the intent of speeding up\nour program, \"When are we going to see\n1971. These programs are of benefit to\nthe urban renewal process and showing\nsome brick-and-mortar activity in the\nthe poorest families of our Nation whose\nvisible accomplishments in short periods\narea?\" There was always the same reply,\nincomes are so low that the new rent\nof time. This would replace much of the\nand it was logical: \"We have got to wait\nsubsidy program explained above would\nexisting program whereby large areas\nuntil we get the redevelopment plan and\nbe of little help. Under both the public\nare redeveloped over a 5- to 10-year pe-\nare ready to go.\" As we all know it took\nhousing and rent supplement programs,\nriod with no visible results until the end\nyears. Frankly, I do not know how many\nthe tenants pay a certain portion of their\nof a long planning and redevelopment\nyears passed before redevelopment was\nincome for rent-the public housing per-\nprocess.\nstarted. But today, to look at it, one would\ncentages determined locally and gen-\nAnother section of this title would\nnever dream that it was the area it was\nerally vary from 16 percent to 20 per-\ninitiate a new system of applying Fed-\nseveral years ago. There are magnificent\ncent with allowance for children; the\neral funds for interim assistance to an\nbuildings there now-new homes and\nrent supplement percentage, as set by\narea scheduled for urban renewal or code\nnew rental units replacing that old slum.\nFederal law, is 25 percent. Under each\nenforcement in the near future. By this\nAs a matter of fact, it is not fully de-\nof these programs, the Federal subsidy\ndevice, much needed obvious work can\nveloped yet. I am not saying we should\nwill make up the difference between what\nbe done well in advance of the slow-\nhave put the program into effect in 1949,\nthe tenant pays and the economic rent.\nmoving urban renewal process.\nbecause we were not ready for it, but\nHowever, the new rental program au-\nThe committee also included provi-\nnow we have had the experience to profit\nthorized by section 201 of this bill pro-\nsions in this title to insure that a ma-\nfrom. Under the provision of the com-\nvides only limited subsidy-the differ-\njority of housing units built in urban\nmittee bill we could take the same tract\nence between in amortization charges on\nrenewal areas are made available to low-\nand redevelop it in increments on an\na 63/4-percent mortgage and a 1-percent\nand moderate-income families; it also\nannual basis. This year we would rede-\nmortgage. Thus, it can reach and be of\nincreased the rehabilitation grant ceil-\nvelop a part of it. Next year we would\nhelp to a more narrow segment of lower\ning from $1,500 to $2,500 to help lower\nredevelop more and SO on down the line.\nincome families. Generally speaking,\nincome families hold on to their homes\nWe would make it progressive rather\nfamilies below $3,000 annual income\nand make the improvements needed to\nthan try to take the entire area all at\nwould need rent supplement or public\nmeet the rehabilitation standards.\none time.\nhousing assistance and thus the com-\nMr. President, one of the great objec-\nTITLE VI-URBAN PLANNING FACILITIES\nmittee believed it must be essential that\ntions SO far to urban renewal has been\nThe most important section in this\nadequate authority be made available to\nthat the undertaking requires such a\ntitle is section 601, which would rewrite\nkeep these programs operating at a good\nlong period of time to complete. This is\nthe 701 urban planning provision and\nlevel.\ntrue because urban renewal is a com-\namend it to cover rural districts. This\nMay 24, 1968\nCONGRESSIONAL RECORD SENATE\nS 6389\nwould be a most significant step in our\nNational Mortgage Association, and the\nTITLE XI-NATIONAL INSURANCE DEVELOPMENT\nGovernment's efforts to stabilize and,\nretention of the other functions of\nCORPORATION\nin fact, reinvigorate the life and econ-\nFNMA into a new Government National\nThis title would establish the National\nomy of rural districts, from which there\nMortgage Association-GNMA. This par-\nInsurance Development Corporation in\nhas recently been such a high migration\ntition would take place gradually, but not\nthe Department of HUD. The NIDC\ninto our crowded cities.\nearlier than May 1, 1970, nor later than\nwould provide reinsurance to insurance\nSection 607 of this title would also\nMay 1, 1973. The Government-owned\ncompanies for losses paid by them result-\nencourage rural district development by\npreferred stock would be paid off\ning from riots or civil disorders. By pro-\nproviding for Federal incentive grants\npromptly by FNMA issuing subordinated\nviding this reinsurance, NIDC will en-\nto such districts similar to those grants\nobligations. Once the preferred stock is\nable the insurance industry to continue\nnow available to metropolitan areas\npaid off and the interim board of direc-\nto provide the necessary property insur-\naround our large cities.\ntors is appointed, the FNMA Corporation\nance it is now providing to property own-\nI want to throw this thought in right\nwould no longer be considered a Govern-\ners in urban areas. Reinsurance losses\nhere, because I think it is something\nment corporation and, thus, its financing\nwould be shared among the insurance\nmost people overlook. When we talk\noperation would be excluded from the\ncompanies-through a loss retention and\nabout the slums and the rundown, de-\nregular Government budget. FNMA\nreinsurance premiums paid to NIDC-\nteriorated, unfit houses in city areas, we\nwould continue to have Federal backup\nthe States, and NIDC.\n:lose sight of the fact that the worst\nsupport to the extent of $2 billion bor-\nThe NIDC would also encourage the\nslums are in rural areas. There are more\nrowing authority from the Treasury.\nprivate property insurance industry, in\npoor people living in the rural areas\nGNMA would continue its special as-\ncooperation with State insurance author-\nthan in all the big cities combined. Over\nsistance and management and liquida-\nities, to develop statewide plans to assure\nhalf of the poor people of this country\ntion functions, would continue to issue\nall property owners fair access to prop-\nlive in rural areas. We are proposing in\nparticipation certificates secured by\nerty insurance. These would be known\nthis bill provisions so that an attack\nmortgages, and would be given new au-\nas \"Fair Access to Insurance Require-\nmay be made on conditions in rural\nthority to guarantee mortgage-backed\nments plans\"-FAIR plans. Minimum\nareas, where there is a great demand\nsecurities issued by the new FNMA and\ncriteria would be provided in the bill for\nfor housing.\nother private-approved issuers. The se-\nthe FAIR plans. Although minimum cri-\nWe need not be afraid of building\ncurity would be limited to FHA and VA\nteria would be established, the State in-\nhouses in rural areas. We have had ex-\nmortgages.\nsurance authority would have the respon-\nperience. In fact, in the act of 1949, 19\nBy making the FNMA private, it is\nsibility of determining the scope of the\nyears ago, I offered an amendment and\nhoped to give it more strength and flex-\nplans beyond the established minimum,\nit was adopted. It became title V of the\nibility to carry out its charter responsi-\nworking out the details of the operation\n1949 Housing Act. It was a simple pro-\nbilities, but, to safeguard it from failing\nof the plan, implementing the plan, and\nvision. The provision authorized loans\nto perform in the best public interest,\noverseeing its operation. An insurance\nto be made to rural families and persons\nthe Federal Government would continue\ncompany obtaining reinsurance from\nwho needed housing. Under title V of the\nto have a strong hand in the control of\nNIDC would have to agree to participate\n1949 act hundreds of millions of dollars\nits management through the makeup of\nin the State plan.\nhave been loaned to rural families for\nthe Board and its charter provisions.\nNIDC and the State insurance author-\nhousing.\nTITLE IX-NATIONAL HOUSING PARTNERSHIP\nity would maintain surveillance over the\nI am sure the present Presiding Officer\nThis title would authorize the creation\neffectiveness of the FAIR plans in in-\n[Mr. GORE in the chair], who is a farm\nof federally chartered, privately funded\ncreasing insurance availability. If it is\nboy like I am, can do as I do. When we\ncorporations to mobilize private invest-\ndetermined that the FAIR plan is not\nride around the country we can pick out,\nment and the application of business\nobtaining the desired results, additional\nas we ride along, the housing that has\nskills in the job of creating low- and\nprograms may be required as a condition\nbeen built under the title V program.\nmoderate-income housing in large vol-\nto continued NIDC reinsurance in the\nThis housing is one of the most cheering\nume. It would work like this: A federally\nState.\nsights one can see. The program has a\nchartered corporation would be organized\nTITLE XII-NATIONAL FLOOD INSURANCE ACT\nremarkable record of being financially\nwith expert staff proficient in the devel-\nOF 1968\nsound. An enviable record has been\nopment and financing of housing proj-\nThe Secretary of Housing and Urban\nachieved. In fact, that is true in the\nects. This corporation would get capital\nDevelopment will establish a program of\nhousing field in general. I think all hous-\nby forming a partnership with investors\nflood insurance, as a joint venture be-\ning programs must have exceeded any\nwho, in return for favorable tax depreci-\ntween the Federal Government and the\nexpectations that those who pioneered\nation allowances, would be attracted to\nprivate incurance industry. The bill per-\nmany years ago could have dreamed of.\ninvest substantial sums of equity capi-\nmits as an alternative, but only if neces-\nTITLE VII-URBAN MASS TRANSPORTATION\ntal. With the equity capital thus avail-\nsary, an all Federal program with or\nThe most significant provision in this\nable, the partnership could join with lo-\ncal partners to build housing with 90\nwithout participation by companies,\ntitle is section 704, which would authorize\npercent of the cost financed with FHA\nagents, or brokers as fiscal agents.\nthat 50 percent of the local share of the\nassistance and 10 percent equity. With\nThe facilities of the private insurance\nnet project cost for mass transit projects\nindustry would be fully utilized in carry-\ncould be made by the public or private\nfavorable refinancing terms, such as pro-\ntransit systems rather than the local\nvided under the new section 236 of the\ning out the program. Private insurance\ngovernment. Also, in exceptional cases\n1968 Act, the operation can be most at-\ncompanies could either assume a portion\nwhere the local government is fiscally\ntractive to investors in the upper income\nof the risk in carrying out the program\nunable to make the payment, the full\nbrackets. Depreciation allowances are\nor could participate on a nonrisk basis.\namount of the local share may be paid\nnot new to housing investors, SO that all\nRisk sharing companies would commit\nby the local transit company. In making\nof this can be accomplished without\nrisk capital to an industry pool of com-\nthis payment, the funds could only come\namendments to existing internal re-\nvenue laws. This provision was recom-\npanies which would absorb a share of\nfrom undistributed cash surpluses, re-\nmended by the President's Committee\nthe losses and expenses of the program.\nplacement, or depreciation funds or re-\non Urban Housing, chaired by Mr. Edgar\nThe Federal Government would make\nserves available in cash or new capital.\nF. Kaiser, as a way of involving big busi-\npremium equilization payments to the\nTITLE VHI-SECONDARY MORTGAGE MARKET\nness in solving the housing problems of\npool to cover losses and also would pro-\nThis is something that I think is of\nour cities.\nvide reinsurance coverage to the pool\ngreat interest. It relates to what we call\nTITLE X-RURAL HOUSING\nfor excessively high losses. Insurance\nFNMA.\nThis title would provide for rural fam-\ncompanies in the pool would pay a pre-\nThis title would amend the FNMA\nilies the same benefits made available\nmium to the Government for this rein-\nCharter Act of 1954 by providing for the\nunder section 101 of this bill for urban\nsurance coverage in years of low-flood\nspin-off of the secondary mortgage mar-\nfamilies, that is, an interest subsidy pay-\nlosses. Other non-risk-bearing insurance\nket facility into a privately owned corpo-\nment to help lower income families ac-\ncompanies would participate in the pro-\nration which would be called the Federal\nquire homeownership.\ngram as fiscal agents of the pool.\nS6390\nCONGRESSIONAL RECORD - SENATE\nMay 24, 1968\nTITLE XIII-INTERSTATE LAND SALES\nMr. JAVITS. Mr. President, will the\nbefore this body, it is a bill that contains\nThis title would give to the Secretary\nSenator yield to me at that point?\nprovisions that will be supported by some\nof HUD authority to require full dis-\nMr. SPARKMAN. Let me add one fur-\nand opposed by others.\nclosure in the sale or lease of certain un-\nther thought.\nThe bill was not easy to arrive at in\ndeveloped land in interstate commerce\nThat was adopted, and, with changes\nour committee. The committee unani-\nor through the mails. All developers or\nthat have taken place from time to time\nmously reported the measure, but many\nsellers of such land would be required to\nsince then, one of the most remarkable\nof the provisions represent a compromise\nfile with the Secretary a statement of\njobs in the history of this country has\nview on the part of different members of\nrecord listing certain required informa-\nbeen done in building housing to house\nthe committee.\ntion about the ownership of the land, its\nstudents and faculty members at our\nI can say very candidly that there are\ntitle, its physical nature, its access and\novercrowded and overcrowding colleges\nsome provisions in the bill which, if I\negress by roads and utilities and related\nthroughout this country.\nhad been writing the bill, would not be in\nmatters. Pertinent extracts of this report\nI do not know what the colleges would\nthe bill. However, the bill represents the\nwould have to be included in a property\nhave done without it. I believe I am safe\nbringing together of the thinking of the\nreport submitted to the purchaser before\nin saying that there is not a single col-\nmembers of the committee who worked\nthe sale is consummated.\nlege in my State that has not benefited,\nlong, hard, and earnestly on getting out\nTITLE XIV-10-YEAR HOUSING PROGRAM\nand benefited immeasurably, from this\na bill.\nThis title would require the President\nprogram.\nI call attention again to the fact that\nI cannot state exactly how much\nto make a report on or before January 15,\nthis bill is not something new that has\nmoney has been loaned out SO far, but I\n1969, setting forth a 10-year plan on the\njust been developed or that the commit-\nwould say around $3 billion. There has\nconstruction and financing of housing,\ntee felt was forced upon it.\nnever been one dime of deficiency. I think\nboth Government and conventionally fi-\nWe started working on this bill nearly\nit is a remarkable record.\nnanced, for each of the 10 years, together\n2 years ago. We started working on hous-\nWe are making, this year, a change\nwith a statement of what reduction in\ning and urban development legislation\nrecommended by the distinguished Sena-\nsubstandard units is expected; also an\nnearly a year and a half ago, in the early\ntor from New York, to whom I now yield.\nestimate of cost of various Federal pro-\npart of the first session of this Congress.\nMr. JAVITS. I merely wish to say\ngrams for legislative action. Residential\nAnd we have worked over the months on\nbriefly, Mr. President, that it is such a\nmortgage market needs would also be re-\ndeveloping the committee bill. And the\ncreative program because it does operate\nported. Annual reports would subse-\nbill does represent the composite think-\nwith practically no impact on the budget.\nquently be made for each of the 10 years\ning of our committee.\nWe struggled, if the Senator will recall,\nthereafter on progress of the projected\nI think that S. 3497 is by and large a\nwith an amendment of mine to increase\nfigures.\ngood bill. In fact, I think it is one of the\nMr. President, I said a few minutes ago\nthe amount of college housing, and\nmost comprehensive bills we have ever\nthat the President's 10-year proposal is a\nfound it extremely trying because of the\nhad. I want to go further and say that\ngood proposal. I believe the committee\nbudgetary impact; and I was almost\nI think it is one of the best bills we have\nforced to this alternative as a means of\nwill back me up in that statement.\never had, and that it is one that helds\nescaping the budgetary impact. I express\nMany people are not satisfied with this\nmore promise for persons of low income\nmy appreciation to the Senator from\nbill, thinking it does not go far enough.\nto get decent housing, either rented or\nAlabama and to the committee for hav-\nBut, Mr. President, we have written a\npurchased. that we have ever had.\ning now embraced it and included it in\nbill which we think goes just about as\nMr. PERCY. Mr. President, will the\nthe bill.\nfar as our present resources will permit.\nSenator yield?\nMr. SPARKMAN. It was a most wel-\nThe organization of homebuilders in this\nMr. SPARKMAN. I yield.\ncome suggestion.\ncountry to do the job, the materials with\nMr. PERCY. Mr. President, I should\nMr. JAVITS. I thank the Senator.\nwhich to do it, the labor force with which\nlike to comment that, having been a\nMr. SPARKMAN. It was a happy solu-\nto do it, and all of that must necessarily\nmember of the Housing Subcommittee, I\ntion of a problem that was becoming\nbe brought together as fast as we can, as\nhave gone back over the history of some\ndifficult because we could not provide the\nwe move into the program proposed by\n30 years, and in my own comments this\nmoney in sufficient amounts to take care\nour bill. This is why the committee feels\nmorning, which will follow those of the\nof all of the loans that the colleges\nthe need for annual reports on the hous-\ndistingushed Senator from Texas [Mr.\nneeded.\ning needs of the Nation.\nTOWER], I will comment more in detail\nWe are not doing away with the direct\non that. However, I think one point\nTITLE XV-MISCELLANEOUS\nloan program-we are merely setting up\nshould be clearly made at this point.\nOne of the most important provisions\nan alternative method of financing. I\nThis has been truly a bipartisan effort.\nunder this title is the new interest sub-\nthink it will be of tremendous help.\nThe bill has been developed under the\nsidy financing device for college housing\nAs the Senator from New York has\ngreat leadership of the chairman, the\nconstruction. Under existing law, direct\npointed out, it would have relatively little\ndistinguished Senator from Alabama,\nFederal loans are made to colleges at 3-\nimpact on the budget.\nwith great resourcefulness. He has been\npercent interest rates. This program has\nMr. JAVITS. I thank the Senator.\nassisted by such members of the com-\nworked well but, because of recent ex-\nMr. SPARKMAN. Under another sec-\nmittee as the Senator from Minnesota\npansion of colleges throughout the Na-\ntion of this title, new authority would be\n[Mr. MONDALE], and. on the minority\ntion, the funds needed to be appropriated\ngiven to the Secretary of HUD to increase\nside, the distinguished Senator from\nfor this purpose have been far short of\nthe planning funds for the model cities\nTexas [Mr. TOWER], the ranking mem-\nthe need.\nprogram by $12 million. By this action,\nber of the committe, and the distin-\nTo overcome this dilemma, this bill\nthe committee anticipates a third round\nguished Senator from Utah [Mr.\nwould authorize the Federal Govern-\nof cities would apply for planning assist-\nBENNETT].\nment to pay interest subsidies amounting\nance under this program. The bill would\nWe have been working for 2 years in\nto the difference between a 3-percent\nalso add $1 billion for operating for\nthe committee on the bill. We now have\nloan and the market interest rate. The\nfiscal year 1970 for model cities. These\nin Washington the representatives of the\nFederal commitment is far reduced by\nfunds are used as supplementary grants\nPoor People's Campaign. They have pre-\nthis means and it is believed a satisfac-\nto cities carrying out model cities pro-\nsented to the Secretary of HUD the re-\ntory quantity of housing can be built\ngranis and would be added to the $900\nquests they are making in the housing\nwith a minimum of Federal outlay.\nmillion authorized under existing law.\nfield. I believe that the distinguished\nMr. President, this is one of the most\nIn conclusion, Mr. President, S. 3497.\nSenator from Alabama will be particu-\nsuccessful programs we have had. It was\nis a bill like many others which we have\nlarly interested in the fact that as we\nback in 1955 that I offered an amendment\nbrought the Senate from the Banking\ngo over the requests made by the Poor\nto the Housing Act of that year to provide\nand Currency Committee. It is a bill that\nPeople's Campaign to the Secretary of\na formula for lending money to colleges\ncontinues our many past efforts toward\nHUD and look over in detail some of the\nin order that they might expand their\nhelping the American people obtain the\nthings they have talked about, we find\nfacilities to help take care of the ever-\ngoal declared in the Housing Act of 1949,\nthat we have anticipated in the past 2\nincreasing load of GI's, veterans of World\n\"a decent home and suitable living en-\nyears in the course of our hearings and\nWar II, and veterans who could be ex-\nvironment for every American family.\"\nin our response to the genuine need,\npected back from the Korean war.\nAnd like any other measure which comes\nmany of the requests that they have\nMay 24, 1968\nCONGRESSIONAL RECORD SENATE\n6391\nmade of the Secretary. Anyone can\nSection 3.-Provides that in administering\nwith the assistance of budget, debt manage-\nclearly see that there is no question\nprograms authorized by sections 221(d) (3),\nment, and related counseling provided by\nabout our acceding to demands being\n235, and 236 of the National Housing Act;\nthe Secretary. Mortgage insurance under this\nthe low-rent public housing program of the\nmade upon us.\nprogram would have to meet the require-\nU.S. Housing Act of 1937; and section 101 of\nments (other than credit and income re-\nWe are sympathetic with the repre-\nthe Housing and Urban Development Act of\nquirements) under certain existing FHA\nsentatives of the poor who present to\n1965, the Secretary of the Housing and Urban\nsingle-family sales program, except that the\nus that we had seen as a great need in\nDevelopment shall require, to the greatest\nprincipal obligation of the mortgage could\nthis country.\nextent feasible, opportunities for employ-\nnot exceed $15,000 ($17,500 in high-cost\nOur response is a response that has\nment arising in connection with construction\nareas) and the mortgagor could not under-\ngone back several years now, in antici-\nor rehabilitation of housing assisted under\ntake a mortgage which, in combination with\npation of all of the things that have\nsuch programs be given to lower income per-\nlocal real estate taxes, required monthly pay-\nbeen presented in this bill that has been\nsons residing in the area of such housing.\nments for principal and interest which ex-\ncarefully worked on for many months\nTITLE I-LOWER INCOME HOUSING\nceeds 25 percent of the mortgagor's income.\nThe amount of insurance under this section\nnow.\nHomeownership for Lower Income Families\nis limited to $200 million outstanding at any\nEvery member of the committee has\nSection 101.-Adds a new section 235 to\none time.\nparticipated and worked cooperatively\ntitle II of the National Housing Act to es-\nwith representatives from HUD and with\ntablish a mortgage insurance program based\nRelaxation of mortgage insurance require-\non an interest rate subsidy to provide home-\nments in certain urban neighborhoods\nthe Secretary of Housing and Urban\nownership for lower income families. The in-\nSection 103.-Amends section 223 of the\nDevelopment.\nterest rate subsidy payment which would be\nNational Housing Act by adding a new sub-\nIt has been a great honor and privi-\npaid by the Secretary of the Housing and\nsection (e) to give FHA a more flexible au-\nlege for me to work under the leadership\nUrban Development to the mortgagee could\nthority in providing financing for the repair,\nof the Senator from Alabama.\nnot exceed the lesser of: (a) The difference\nrehabilitation, construction, or purchase of\nI certainly support everything the\nbetween the monthly payment for principal,\nproperties located in older, declining urban\nchairman has said this morning.\ninterest, and mortgage insurance premium\nareas by authorizing FHA to accept for insur-\nMr. SPARKMAN. Mr. President, I cer-\nfor a market rate mortgage, and the amount\nance mortgages on properties which may not,\ntainly thank the Senator from Illinois,\nthe monthly payment would be for principal\nbecause of the areas in which they are lo-\nand interest with a 1-percent mortgage, or\ncated, be able to meet all the normal eligibil-\nand I share with him the feeling he has\n(b) the difference between 20 percent of the\nity requirements for insurance. Permits such\nexpressed that the bill represents the\nmortgagor's monthly income and the monthly\nmortgages to be accepted for insurance where\nhandiwork of 14 members of the com-\npayment under the mortgage. The subsidy\nFHA is able to establish that the areas are\nmittee.\npayment would be available to a purchaser\nreasonably viable, giving consideration to the\nMr. President, I have expressed my\nhaving an income not in excess of 70 percent\nneed for providing adequate housing for\nof the limits prescribed for eligibility to OC-\nfamilies of low and moderate income in such\nthanks to the members of the commit-\ntee and the subcommittee without men-\ncupy projects financed under the FHA sec-\nareas and that the properties are an accept-\ntion 221(d) (3) below-market interest rate\nable risk in view of such consideration.\ntioning their names. However, I believe\nprogram, except that 20 percent of the con-\nSpecial risk insurance fund\nI ought to say that the distinguished\ntract funds could be used to assist families\nSection 104.-Adds a new section 238 to\nSenator from Texas [Mr. TOWER], the\nwith income above these limits. For each\ntitle II of the National Housing Act to estab-\nranking minority member of the com-\nminor child in the household, $300 would be\nlish a \"Special Risk Insurance Fund,\" which\nmittee, is always most helpful and CO-\ndeducted from family income. The interest\nfund is not intended to be actuarially sound\noperative.\nsubsidy payment would decrease as the\nand out of which claims would be paid on\nThe same thing is true with respect\nhomeowner's income rises.\nmortgages insured under sections 101 (home-\nto the Senator from Utah [Mr. BENNETT],\nThe subsidy payment could only be made\nownership assistance), 102 (credit assist-\nthe Senator from Iowa [Mr. HICKEN-\nwith respect to new or rehabilitated housing\nance), 103 (properties in older, declining ur-\nLOOPER], the Senator from Illinois [Mr.\nmeeting the requirements of the FHA sec-\nban areas) and 201 (rental and cooperative\ntion 221(d) (2) sales housing program, the\nhousing for lower income families) of the\nPERCY], and the Senator from Massa-\n234 condominium program, the 213 coopera-\nbill. Payments on claims would be made in\nchusetts [Mr. BROOKE].\nitve program, or section 221(h) as incor-\ncash or debentures. Income such as insur-\nI could go right down the list on the\nporated into the new section with some\nance premiums and service charges in con-\nDemocratic side also.\nmodifications. However, during the first 3\nnection with these programs would be de-\nMr. President, perhaps I should just\nyears after enactment assistance payments\nposited in the new fund. Authorizes $5 mil-\nlist the Democratic members of the com-\ncould be made with respect to existing hous-\nlion advance from general insurance fund\nmittee. The members are WILLIAM PROX-\ning as follows: 25 percent of the contract\nto establish new fund, which is repayable\nMIRE, of Wisconsin; HARRISON A. WIL-\nfunds authorized by appropriation acts in\nand authorizes appropriations when neces-\nthe first year; 15 percent of the contract\nLIAMS, JR., of New Jersey; EDMUND S.\nsary to supplement and maintain adequacy\nfunds authorized in the second year; 10 per-\nof the new fund.\nMUSKIE, of Maine; EDWARD V. LONG, of\ncent of the contract funds authorized in\nCondominium and cooperative ownership for\nMissouri; THOMAS J. MCINTYRE, of New\nthe third year. In addition, payments could\nlow and moderate income families\nHampshire; WALTER F. MONDALE, of Min-\nbe made with respect to existing housing for\niesota; GALE McGEE, of Wyoming, WIL-\ndisplaced families, families with five or more\nSection 105.-Amends section 221 of the\n.IAM B. SPONG, JR., of Virginia.\nminors, or families living in public housing,\nNational Housing Act by adding new sub-\nAll of the members of the committee\nas well as for families who purchase dwelling\nsections (i) and (j) to permit section 221\nunits released from the project mortgage for\n(d) (3) below-market interest rate rental\nave been helpful and almost without\na 236 project or a rent supplement project.\nprojects: (1) To be converted to condomi-\nexception suggestions have been adopted\nThe maximum mortgage under the program\nnium ownership; or (2) to be converted to\nin the bill that have been made by each\nwould be $15,000 ($17,500 in high-cost areas),\ncooperative ownership. Families purchasing\nmember of the committee. I pay tribute\nbut each limit would be increased by $2,500\ncondominium or cooperative units would\nto all members of the committee for the\nfor families of five or more persons. The\nbe generally required to meet income limits\ndedicated service they have rendered in\nsection 221(d) (2) mortgage ceilings would\nestablished for occupancy under the (d)\nperfecting this piece of legislation. I feel\nbe raised to the same level. Counseling serv-\nices are authorized.\n(3) below-market interest rate program.\nsomewhat safe in saying perfecting be-\ncause I think it is an excellent piece of\nThis section also authorizes contract au-\nAssistance to nonprofit sponsors for low and\negislation.\nthority subject to appropriations acts to fi-\nmoderate income housing\nnance the program in the following manner:\nSection 106.-Establishes a new program\nMr. President, I ask unanimous con-\n$75 million annually prior to July 1, 1969,\nwithin HUD under which the Secretary may\nent to have printed at this point in the\nwhich amount may be increased by $100 mil-\nprovide technical assistance to nonprofit\nRECORD a section-by-section analysis of\nlion on July 1, 1969, and by an additional\nsponsors of low and moderate income hous-\nhe bill.\n$125 million on July 1, 1970.\ning. Also authorizes the Secretary to make\nThere being no objection, the section-\nCredit assistance\nnon-interest-bearing loans to nonprofit or-\ny-section analysis of the bill was ordered\nSection 102.-Adds a new section 237 to\nganizations for financing up to 80 percent of\n) be printed in the RECORD, as follows:\ntitle II of the National Housing Act to au-\npreconstruction costs in connection with fed-\nOUSING AND URBAN DEVELOPMENT ACT OF 1968\nthorize mortgage insurance for families of\nerally assisted low and moderate income\n.3497)-SECTION-BY-SECTION SUMMARY\nlow and moderate income who cannot qualify\nhousing projects. These loans could cover\nSection 1.-Provides that the bill shall be\nfor mortgage insurance under existing FHA\nsuch preconstruction items as architectural\nted as the \"Housing and Urban Develop-\nprograms because of their credit histories\nfees, land options, and engineering surveys.\nent Act of 1968.\"\nor irregular income patterns, but who the\nA revolving fund would be established, with\nSection 2.-States the declaration of policy\nSecretary finds are \"reasonably satisfactory\"\n$7.5 million authorized the first year and $10\n[ the bill.\ncredit risks and capable of homeownership\nmillion the second year.\n6392\nCONGRESSIONAL RECORD\nMay 24, 1968\nInsurance protection for homeowners\nContracts for interest reduction payments\npursuant to regulations prescribed by him.\nSection 107.-Authorizes the Secretary of\nsubject to approval in appropriations acts\nUnder such regulations, the mortgagor would\nHUD, in cooperation with the private insur-\nwould be authorized in the following\nhave to agree to place in trust any income\nance industry, to develop a plan for estab-\namounts: $75 million annually prior to July\nor funds derived from the project in excess\nlishing an insurance program to enable\n1, 1969, which amount may be increased by\nof what is required to meet actual and nec-\nhomeowners to meet their monthly mortgage\n$100 million on July 1, 1969, and by $125\nessary operating expenses. The Secretary\npayments in time of personal economic ad-\nmillion on July 1, 1970.\ncould provide for granting such consent in\nversity. Also directs the Secretary to make a\nRent supplement program\nany case or class of cases without regard to\nreport on his actions along with his recom-\nSection 202.-Amends section 101 of the\nthe requirements of the regulations where\nmendation for establishing such a program\nhe determined such action would not jeop-\nHousing and Urban Development Act of 1965\nwithin 6 months following enactment of this\nardize the interests of the United States. Any\nto increase the appropriation authority for\nact.\nknowing and willful misdistribution of the\nthe rent supplement program by $40 million\nrents or other income received during the\nNational advisory commission on low-income\nfor fiscal year 1970 and $100 million for fiscal\nperiod of extension or modification would\nhousing\nyear 1971. Also authorizes State or locally\nsubject the party to criminal penalty ($5,000\nSection 108.-Establishes a National Ad-\nassisted rent supplement benefits.\nor 3-year imprisonment, or both).\nvisory Commission on Low-Income Housing\nPart B-Low-Rent Public Housing\nCondominiums\nto undertake a comprehensive study and in-\nIncreased low-rent public housing\nvestigation of the resources and capabilities\nSection 304.-Amends section 234(c) and\nauthorization\nin the public and private sectors of the eco-\n(f) of the National Housing Act to: (1) Pro-\nnomy which may be used to fulfill more\nSection 203.-Amends section 10(e) of the\nvide the same downpayment and maximum\ncompletely the objectives of the national goal\nU.S. Housing Act of 1937 to increase the an-\nmortgage limitations for FHA condominium\nof \"a decent home and suitable living en-\nnual contribution contract authority by $100\nprograms as are provided for the regular sin-\nvironment for every American family,\" par-\nmillion on enactment and by $150 million\ngle-family FHA section 203(b) program, (2)\nticularly as such goal relates to low-income\nfor each of fiscal years 1970 and 1971.\npermit blanket mortgages to cover four or\nfamilies. The Commission is directed to sub-\nUpgrading management and services in\nmore units instead of the present limitation\nmit to the President and the Congress an\npublic housing projects\nof five or more units, and (3) permit FHA in-\ninterim report with respect to its findings\nSection 204.-Amends section 15 of the U.S.\nsurance for individual units in a condomini-\nand recommendations not later than July 1,\nHousing Act of 1937 to authorize the Secre-\num project with two to 11 dwelling units\n1969. and a final report not later than July 1,\ntary of HUD to enter into grant contracts\nwithout requiring that the project be first\n1970.\nwith local housing authorities to assist them\ncovered by an FHA-insured project mort-\nNational Homeownership Foundation\nin upgrading their management activities\ngage.\nand to provide tenant services to families OC-\nInsurance of loans for purchase of fee simple\nSection 109.-Creates a National Home-\nownership Foundation, the purpose of which\ncupying public housing. Authorizes appro-\ntitle from lessors\nwould be to provide technical and limited\npriation of $20 million in fiscal year 1969 and\nSection -Adds a new section 240 to\nfinancial assistance to public and private\n$40 million in fiscal year 1970 for such\nthe National Housing Act to permit FHA to\norganizations which have as their purpose\ncontracts.\ninsure loans of homeowners financing the\nproviding increased homeownership and\nPurchase of units by tenants\npurchase of fee simple title to property on\nhousing opportunities for lower income fam-\nwhich their homes are located where the\nSection 205.-Amends section 15(9) of U.S.\nilies. The Foundation, which would be a Gov-\nHousing Act of 1937 to broaden existing law\nhomeowners have only leasehold interests to\nernment-chartered nonprofit private corpora-\nthe land.\nto permit local housing authorities to sell any\ntion, would be administered by a Board con-\nlow-rent housing units to tenants if such\nSection -Amends 5(c) of the Home\nsisting of 18 members, 15 of whom would be\nunits are suitable for individual ownership.\nOwners' Loan Act of 1933 to permit saving:\nappointed by the President with the advice\nand loan associations to invest in the loan\n(Existing law permits tenants to purchase\nand consent of the Senate. The remaining\ndescribed above.\nonly detached or semidetached units.)\nthree members would be the Secretary of\nPublic housing in Indian areas\nExtend section (2) sales housing pro\nHousing and Urban Development, Secretary\ngrain for two-, three-, and four-family res\nof Agriculture, and the Director of the Office\nSection 206.-Amends section 1 of U.S.\ndences to all low and moderate incon\nof Economic Opportunity. The Foundation\nHousing Act of 1937 to permit public housing\nfamilies\nwould also be authorized an appropriation of\nassistance for Indian families living in rural\nSection 306.-Amends section (d) (2) (\n$10 million to be used in carrying out its\nfarm areas. (Existing law limits public hous-\nthe National Housing Act to authorize mort\nprescribed functions.\ning assistance to urban and rural nonfarm\ngage insurance for two-, three-, and four\nTITLE II-RENTAL HOUSING FOR LOWER INCOME\nareas.)\nfamily residences to all low and moderat\nFAMILIES\nTITLE III-FEDERAL HOUSING ADMINISTRATION\nincome families. (Existing law limits mort\nINSURANCE OPERATIONS\nPart A-Private Housing\ngage insurance only to displaced low an\nMortgage insurance premiums for servicemen\nmoderate income families.)\nRental and cooperative housing for lower\nand their widows\nincome families\nRemove dividend restriction from nondwell\nSection 201.-Adds a new section 236 to\nSection 301.-Amends section 222 of the\ning facilities in section 221 projects\ntitle II of the National Housing Act to pro-\nNational Housing Act to permit payment of\nSection 307.-Amends section 221(f) of t1\nvide rental and cooperative housing for low-\nFHA insurance premium by the Secretaries of\nNational Housing Act to remove the require\ner income families. Mortgages insured under\nDefense and Transportation for servicemen\nment that mortgagors of multifamily pro\nsection 236 would carry a market interest\nwho assume a mortgage previously insured\nects insured under section 221 and locat\nrate, but the Secretary of HUD would pay to\nunder any other provision of the National\nin urban renewal areas waive the rights\nthe mortgagee on behalf of the mortgagor\nHousing Act. Also requires Secretaries to con-\nremove dividends on the equity investme\nan amount equal to the difference between\ntinue premium payment after serviceman's\nof the project devoted to community at\nthe monthly payment for principal, interest,\ndeath on behalf of his widow for a 2-year\nshopping facilities where these facilities a\nand mortgage insurance premium at the mar-\nperiod or until she sells the house, whichever\ndesigned to serve the needs of others tha\nket rate and the monthly payment for prin-\nis sooner. Also directs Secretaries to notify\nresidents of the project. (The restrictio\ncipal and interest at 1 percent. Occupants,\npromptly the widow of the increase in costs\nwould not be removed in the case of sec. 22\nhowever, would pay 25 percent of their in-\nshe must bear at end of 2-year period.\n(d) (3) BMIR projects.)\ncome as rent up to the full market rental.\nSeasonal homes\nSupplemental loan program for project\nThe sponsor would reimburse the Secretary\nSection 302.-Adds a new section 203 (m)\nfinanced with FHA insured mortgages\nfor that part of rent receipts in excess of the\nto the National Housing Act to authorize\nSection 308-Adds a new section 223(f) t\namount which would be required under 1-\nFHA to insure mortgages on seasonal homes\nthe National Housing Act to permit the Sec\npercent financing, and this amount could be\nnot exceeding $15,000 and 75 percent of the\nretary of HUD to insure supplemental loar\nused to make other interest reduction pay-\nappraised value on an acceptable risk basis,\nto finance improvements, repairs, and add\nments. Occupancy of assisted projects would\ntaking into consideration the economic\ntions to multifamily rental projects (include\nbe available only to tenants whose incomes\npotential of the area and the effect the in-\nare not in excess of 70 percent of the limits\ning nursing homes and housing for the e\nsurance of such mortgages would have on the\nderly) and group practice facilities finance\nprescribed for eligibility under the section\navailability of mortgage credit in the area.\nwith an FHA insured mortgage. Such finan\n221 (3) below-niarket interest rate pro-\nAlso requires proper steps to preserve natural\ning would supplement existing insured mor\ngram, except that 20 percent of contract\nresources of the area.\ngages and would be available without r\nfunds could be used with respect to families\nwith incomes above these limits. For each\nModification in terms of insured mortgages\nfinancing the existing mortgage.\nminor child in the household, $300 would be\ncovering multifamily projects\nHome improvement loans-Increase in max\ndeducted from family income. Section 221\nSection 303.-Adds a new section 239 to the\nmum maturity, finance charge, and lo:\n(d) (3) BMIR mortgages (prior to final en-\nNational Housing Act to require the Secre-\namount\ndorsement) and section 202 housing for the\ntary of HUD to approve a request for the ex-\nSection 309.-Amends section 2(b) of t)\nelderly mortgages (up to, or a reasonable\ntension of time for curing a default on any\nNational Housing Act containing the title\ntime thereafter, project completion) could be\nFHA multifamily mortgage or for a modifica-\nhome improvement program to: (1) Increa\nrefinanced under this program.\ntion of the terms of such a mortgage only\nthe maximum loan limitation from $3,500\nMay 24, 1968\nCONGRESSIONAL RECORD\nS 6393\n$5,000; (2) increase the maximum maturity\nsued by private new community developers\nwhich are scheduled for rehabilitation or\nfrom 5 years and 32 days to 7 years and 32\nto help finance the development of new com-\nconcentrated code enforcement within a\ndays; and (3) increase the maximum financ-\nmunity projects. This title would provide:\nreasonable period of time.\ning charge from $5 to $5.50 per $100 on the\nMaximum guarantee: Cannot exceed: (a)\nRehabilitation in urban renewal areas\nfirst $2,500 of the loan and from $4 to $4.50\nThe lesser of 80 percent of the Secretary's\nper $100 on the amount in excess of $2,500.\nestimate of the value of the property upon\nSection 504.-Amends section 110(c) (8) of\nExperimental housing program\ncompletion of the land development, or (b)\nthe Housing Act of 1949 to remove the pres-\nthe sum of 75 percent of the Secretary's esti-\nent limitation on the acquisition and re-\nSection 310.-Amends section 223 of the\nmate of the value of the land before develop-\nhabilitation of residential properties by a\nNational Housing Act, the FHA experimental\nhousing program, to make the program avail-\nment and 90 percent of his estimate of the\nlocal urban renewal agency. (Existing law\nactual cost of the land development.\npermits the local agency to acquire and re-\nable for use in connection with all FHA\nGuaranteed ceilings: $50 million for any\nhabilitate for demonstration purposes no\nprograms.\nsingle new development; $500 million aggre-\nmore than 100 units or 5 percent of the total\nTerm of FHA mortgages for land\ngate outstanding principal obligation at any\nresidential units in the urban renewal area,\ndevelopment\none time.\nwhichever is lesser.)\nSection 311.-Amends section 1002(d) (1)\nRevolving fund for guarantee: Fees and\nDisposition of property for low and moderate\nof the National Housing Act to increase the\ncharges collected by the Secretary will be\nincome housing\nmaturity for FHA mortgages securing sub-\ndeposited in a revolving fund to cover any\nSection 505.-Amends section 107 of the\ndivision development from 7 to 10 years with\nliabilities under the guarantees. In addition,\nHousing Act of 1949 to make it clear that\nfurther authority placed in the Secretary of\nthe full faith and credit of the United States\nland may be disposed of for low as well as\nHUD to go beyond a 10-year maturity if he\nis pledged to payment of the guarantees and\nmoderate income housing purposes and to\ndeems such longer term is necessary.\nappropriations to cover program operations\npermit this disposition to be accomplished\nRehabilitated multifamily projects in urban\nand nonadministrative expenses and, if nec-\nby lease as well as by sale. Would also permit\nrenewal areas\nessary, any guarantee payments are author-\nland to be sold to a mortgagor qualified under\nized.\nSection 312.-Amends section 220(d) (3)\nsection 236 of the National Housing Act\nSmall builders: Requires HUD to adopt re-\n(B) (ii) and (d) (3) (iii) of the National\n(added by sec. 201 of this bill) and to non-\nHousing Act to permit FHA insurance under\nquirements encouraging small builders to\nprofit organizations eligible under section\nsections 220 (urban renewal housing) and\nparticipate in new community projects.\n221 (h) or under 235(j) (1) of the National\nSupplementary grants: Authorizes supple-\n221 (d) (3) (low and moderate income fami-\nHousing Act (added by sec. 101 of this bill)\nmental grants to States and localities as-\nlies) for multifamily properties in urban re-\nwhich rehabilitate property and sell it to\nnewal areas which have been rehabilitated\nsisting new community development with\nlow or moderate income families.\nbasic water and sewer and open space proj-\nby local agencies.\nects. The additional grant is limited to 20\nGrants for low and moderate income housing\nMiscellaneous housing insurance\npercent of cost of the facility and a substan-\nin open land projects\nSection 313.-Amends section 223 of the\ntial number of housing units for low and\nSection 506.-Amends section 103(a (1) of\nNational Housing Act to permit refinancing\nmoderate income person must be made\nthe Housing Act of 1949 to permit grants to\nof FHA mortgages insured under any of the\navailable through such development project.\nbe made with respect to urban renewal open\nsections or the titles of the National Hous-\n(Total Federal grant cannot exceed 80 per-\nland projects (which now only qualify for\ning Act. In addition, this section would per-\ncent of facility cost.) Authorizes an appro-\nloans) in an amount not to exceed two-thirds\nmit FHA mortgages assigned to the Secretary\npriation of not to exceed $5 million for sup-\nof the difference between the proceeds from\nor executed in the sale of an acquired prop-\nplemental grants for fiscal year 1969 and not\nany land disposed of at its value for low or\nerty to be insured under any section or title\nto exceed $25 million for fiscal year 1970.\nmoderate income housing (under sec. 107 of\nof that act. It also authorizes insurance of\nSections of this title also require cost cer-\nsuch act) and the proceeds which would\nsupplementary loans to cover excess of ex-\ntifications in connection with a land de-\nhave been realized if the land had been\npenses over income for first 2 years of multi-\nvelopment project and authorize the General\ndisposed of at its fair value without regard\nfamily projects at the interest rate in effect\nAccounting Office to audit the transactions\nto the special provisions of section 107.\nat the time the supplementary loan is in-\nof developers whose obligations are guaran-\nUrban renewal. loan contracts\nsured.\nteed pursuant to this title.\nSection 507.-Amends section 102(c) of the\nSupplementary loans for coperative housing\nTITLE V-URBAN RENEWAL\nHousing Act of 1949 to permit a local public\npurchased from the Federal Government\nSection 501-Amend title I of the Housing\nagency to borrow funds to finance project\nSection 314.-Amends section 213(j) of the\nAct of 1949 by adding a new subtitle head-\nundertakings on the private market at an\nNational Housing Act to authorize mortagage\ning to read. \"Part A-Urban Renewal Proj-\ninterest rate in excess of the Federal lending\nrate set out in its loan contract with the\ninsurance for supplementary loans to hous-\nects, Demolition Programs and Code Enforce-\nment Programs\" and further amends that\nGovernment. The difference between the in-\ning cooperatives which purchased wartime\nhousing from the Federal Government.\ntitle by adding a new \"Part B-Neighborhood\nterest cost on the private market and the\ninterest cost at which the LPA could have\nEquipment in nursing homes\nDevelopment Programs.\" This new part B\nadded to title I authorizes the Secretary of\nborrowed from the Federal Government un-\nSection 315.-Amends section 232 of the\nHUD to provide financial assistance to local\nder its loan contract would be made up by a\nNational Housing Act to permit the cost of\npublic agencies on an annual basis to assist\nsupplemental grant from the Government.\nmajor items of equipment necessary for the\nthem in carrying out \"neighborhood develop-\nProject completion prior to disposition of\noperation of a nursing home to be included\nment programs.\" A neighborhood develop-\ncertain property\nin the FHA insured mortgage.\nment program would consist of urban re-\nSection 508.-Amends section 106 of the\nFlexible interest rates for certain FHA in-\nnewal project undertakings and activities in\nHousing Act of 1949 to permit the Secretary\nsurance programs\none or more urban renewal areas that are\nof HUD to allow an urban renewal project\nSection 316.-Amends section 3(a) of Pub-\nplanned and carried out on the basis of an-\nto be closed out where: (1) Not more than\nlic Law 90-301 to permit the Secretary of\nnual increments. The requirements govern-\n5 percent of the total acquired land remains\nHUD, until October 1, 1969, to establish the\ning such undertakings and activities would\nto be disposed; (2) the local public agency\ninterest rate for new mortgage insurance\nbe similar to those governing the provision of\ndoes not expect to be able, due to circum-\nprograms authorized by new sections 223(f)\nFederal financial assistance for regular urban\nstance beyond its control, to dispose of that\n235(j), and 240 of the National Housing Act\nrenewal projects.\nland in the near future; (3) all other project\n(added by secs. 101, 314, and 305, respectively,\nIncreased authorization\nactivities are completed; and (4) the local\nof the bill) at such rate he believes neces-\nSection 502.-Amends section 103 (b) of\npublic agency has agreed to dispose of or\nsary to meet the market.\nretain such land in the future for uses in\nthe Housing Act of 1949 to increase the con-\nSale of rehabilitated units in multifamily\ntract authority for urban renewal and other\naccordance with the urban renewal plan.\nstructures\ntitle I activities by $1.4 billion on July 1,\nThis section would also amend section 110(f)\nof such act to include in the amount of land\nSection 317.-Amends section 221(h) of\n1969. This section also authorizes an increase\nproceeds, for the purpose of computing net\nthe National Housing Act to: (1) Permit the\nof $350 million for urban renewal projects\nproject cost, an amount equal to the value\nrehabilitation and sale of individual units\nin model city areas.\nof the land not yet disposed of.\n(with a 3-percent mortgage) in a multi-\nRehabilitation-grants\nfamily structure; and (2) permit the blanket\nDemolition grants\nSection 503.-Amends section 115(a) of the\nmortgage to cover four or more units instead\nHousing Act of 1949 to increase the rehabili-\nSection 509.-Amends section 116(a) of the\nHousing Act of 1949 to authorize the Secre-\nof the present limitation of five or more\ntation grant that can be made to low-income\ntary of HUD to make grants for the demoli-\nunits.\nhomeowners from $1,500 to $2,500. This sec-\ntion of nonresidential structures that are\nTITLE IV-GUARANTEES FOR FINANCING NEW\ntion also makes a technical amendment to\nharborages or potential harborages of rats.\nCOMMUNITY LAND DEVELOPMENT\nchange the term \"structure\" to \"real prop-\nerty\" in order to permit the use of grant\nAir rights in urban renewal areas\nSections 401-416.-Add a new title to be\nfunds for rehabilitation relating to aspects\nSection 510.-Amends section 110(c) of the\nreferred to as the \"New Communities Act of\nof the property other than the dwelling struc-\nHousing Act of 1949 to permit the carrying\n1968\" to the housing laws to permit the\nture itself. Finally, this section authorizes\nout of air rights urban renewal projects and\nSecretary of HUD to guarantee the bonds,\nrehabilitation grants in areas (other than\nthe construction of necessary foundations\ndebentures, notes, and other obligations is-\nurban renewal and code enforcement areas)\nand platforms to provide educational facil-\n6394\nCONGRESSIONAL RECORD SENATE\nMay 24, 1968\nities. Under present law, these activities may\nthorizes grants under section for re-\nthe water and sewer facilities program from\nbe assisted only when they are for low and\ngional and district councils of government as\nJuly 1, 1968, to October 1, 1969.\nmoderate income housing or for industrial\nwell as those organized on a metropolitan\nAuthorizations for water and sewer facilities,\ndevelopment where the area is not suitable\nbasis and a broadening of the definition of\nneighborhood facilities, and advance ac-\nfor low and moderate income housing.\ncomprehensive planning for the provision of\nquisition of land programs\nInterim assistance for blighted areas\ngovernmental services and for the develop-\nment and utilization of human and natural\nSection 605.-Amends section 708(a) of the\nSection 511.-Adds a new section 118 to\nresources. This section has added to the pre-\nHousing and Urban Development Act of 1965\ntitle I of the Housing Act of 1949 to author-\namble of section 701 a statement to make it\nto provide that any funds authorized but not\nize the Secretary of HUD to contract to make\ngrants, in an aggregate amount not to exceed\nclear that the committee expects HUD to per-\nappropriated for the basic water and sewer\nmit the judicious use of private planning\nfacilities, neighborhood facilities, and the ad-\n$20 million in any fiscal year, to cities and\nother municipalities or counties to assist in\nconsultants by State and local governments\nvance acquisition of land programs will re-\nwhere these governments deem it appropri-\nmain available for appropriation through\ntaking interim steps to alleviate harmful con-\nditions in any slum and blighted area of the\nate in carrying out planning activities as-\nfiscal year 1970. (Present authorization for\nsisted under section 701. The section fur-\nthese programs expires with fiscal year 1969.)\ncommunity which is planned for substantial\nclearance, rehabilitation or federally assisted\nther authorizes grants to official governmen-\nIn addition, this section authorizes an appro-\ncode enforcement in the near future but\ntal planning agencies for areas where rapid\npriation of $115 million for fiscal year 1970\nwhich needs some immediate short-term\nurbanization is expected to result on land\nfor grants for water and sewer projects.\ndeveloped or to be developed as a new com-\nOpen space land program\npublic action until permanent action can\ntake place. Such interim assistance grants\nmunity under title IV of the bill and to re-\nSection 606.-Amends section 702(b) of the\ncould not exceed two-thirds of the cost of\ngional commissions established pursuant to\nHousing Act of 1961 to convert the funding\nplanning and carrying out the interim\nthe Public Works and Economic Development\nprovision for contracts under the open space\nAct of 1965.\nprogram except that a three-fourths grant\nland program from contract authority to reg-\nThe bill also authorizes additional 701\ncould be made to any community with a\nular authorization for appropriation and au-\npopulation of 50,000 or less. A workable pro-\nplanning funds amounting to $35 million for\nthorizes the appropriation of the unused por-\ngram is a prerequisite of an interim assist-\nfiscal year 1969 and $125 million for fiscal\ntion of contract authority. This section\nance program. Also, relocation assistance and\nyear 1970.\nwould also increase the appropriation au-\npayments would be available to those dis-\nPlanned areawide development\nthority by $150 million in fiscal year 1970.\nSection 602.-Amends title II of the Dem-\nThis section would further increase the\nplaced as a result of the interim program.\nThis section also requires the Secretary of\nonstration Cities and Metropolitan Develop-\namount of grant funds which can be used\nHUD, wherever feasible, to encourage the em-\nment Act of 1966 by changing the heading of\nannually for studies and publications from\nployment of unemployed or underemployed\nsuch title to \"Planned Areawide Develop-\n$50,000 to $125,000.\nresidents of the area in carrying out activities\nment\" and in keeping with this change in\nAuthorize the making of feasibility studies in\nunder this section.\ntitle amends the sections and subsections\nthe public works planning advances pro-\nRehabilitation loans\nthereto to permit supplementary incentive\ngram\nSection 512.-Amends section 312 of the\ngrants authorized for certain federally as-\nSection 607.-Amends section 702(a) of the\nHousing Act of 1964 to: (1) Extend the re-\nsisted projects in metropolitan areas to be\nHousing Act of 1954 to clarify the authority\nhabilitation loan program from October 1,\nmade for such projects being carried out in\nof the Secretary of HUD to make advances for\n1969, to October 1, 1970, and (2) authorize\nany multijurisdictional area such as the\nthe conduct of feasibility studies regarding\nsuch loans in areas, other than urban re-\nrural planning districts which are authorized\nspecific public works, the planning of which\nnewal and concentrated code enforcement\nby the amendments in section 601 of this bill.\nmay be assisted under section 702.\nareas, which are scheduled for rehabilitation\nAlso makes available for grant purposes\nTITLE VII-URBAN MASS TRANSPORTATION\nor concentrated code enforcement within a\nthrough fiscal year 1970 any of the funds\nGrant authorizations\nreasonable period of time where the property\nauthorized for fiscal years 1967 and 1968, but\nis a owner-occupied residential structure and\nwhich have not been appropriated.\nSection 701.-Amends section 4(b) of the\nit is in violation of local housing or similar\nAdvance acquisition of land\nUrban Mass Transportation Act of 1964 to au-\nthorize an appropriation of $190 million for\ncodes.\nSection 603.-Amends section 701 and re-\nfiscal year 1970. In addition, it would increase\nLow and moderate income housing in resi-\nwrites section 704 of the Housing and Urban\nthe amount of funds which may be usec\ndential urban renewal areas\nDevelopment Act of 1965 to provide basic\nfrom the current authorization for research\nSection 513.-Rewrites section 105(f) of\nauthority for a more efficient and effective\ndevelopment and demonstration programs by\nthe Housing Act of 1949 to require that a ma-\nprogram of Federal assistance to localities\n$6 million for fiscal year 1969 and would au\njority of the housing units provided in urban\nfor the advance acquisition of land expected\nthorize the Secretary after fiscal year 1969\nrenewal projects which are to be redeveloped\nto be needed for public purposes. The amend-\nto use for research and demonstration ac-\nfor predominantly residential uses and which\nments and rewriting would:\ntivities such funds as he deems appropriate\nreceive Federal recognition after the effective\n(1) Change the definition of eligible land;\nfrom those authorized in section 4(b) of the\ndate of this bill be standard housing units\n(2) Require that the proposed use of the\n1964 act.\nfor low or moderate income families or\nland be undertaken within 5 years except\nindividuals.\nthe Secretary could go beyond the 5-year\nDefinition of mass transportation\nperiod if, due to unusual circumstances, he\nSection 702.-Amends section 12(c) (5) O\nTITLE VI-URBAN PLANNING AND FACILITIES\ndeems a longer period necessary and if he\nthe Urban Mass Transportation Act of 196\nComprehensive planning\nadvised the Banking and Currency Commit-\nto broaden the statutory definition of \"mas\nSection 601.-Rewrites section 701 of the\ntees of the Congress of this action;\ntransportation.\" The broadened definitio\nHousing Act of 1954 (urban planning assist-\n(3) Clarify the status of the land in the\nwould permit greater flexibility in develop\nance). The principal change authorizes the\ninterim between acquisition and utilization\ning and applying new concepts and system\nSecretary of HUD to make planning grants\nfor the approved purpose;\nin urban mass transportation programs.\nto State planning agencies for assistance\n(4) Permit the Secretary to approve the\nExtension of emergency program under th\nto district planning agencies for rural and\ndiversion of the land to another public pur-\nUrban Mass Transportation Act\nother non-metropolitan areas. A grant\npose when in accord with comprehensive\nSection 703.-Amends section 5 of the\nauthorization of $20 million would be pro-\nplanning and give him discretion to require\nUrban Mass Transportation Act of 1964 to\nvided for such planning grants, to be in-\nrepayment of the grant or the substitution\nextend the emergency provisions of the mas\ncreased by an additional $10 million on\nof land of equivalent value when the land\ntransportation program from November 1\nJuly 1, 1969, both to come out of the\nis diverted to a nonpublic purpose;\n1968, to July 1, 1970.\nregular increase. The Secretary of Agriculture\n(5) Provide that assistance under this sec-\nwould be given certain functions with respect\nNon-Federal share of net project cost\ntion will not render a project ineligible for\nto these district planning grants. The section\nother Federal assistance programs and that\nSection 704.-Amends sections 4(a) and\nalso authorizes an additional $10 million of\nthe ccst of land acquired with this assistance\nof the Urban Mass Transportation Act C\nthe section 701 appropriations to be avail-\nwill not be an ineligible project cost in such\n1964 to permit private transit companies t\nable for study, research, and demonstration\nother programs;\nfurnish up to 50 percent of the local share (\nprojects covering such matters as the plan-\nthe net project cost of a mass transit projec\nning for entire systems of public facilities\n(6) Provide for grant assistance for im-\nor in cases of an applicant's (State or loca\nand services within metropolitan areas and\nputed interest charges when an applicant\nuses other than borrowed funds to finance\npublic body) financial inability to put U\nother multijurisdictional regions. Other\nchanges would authorize the Secretary to\nthe acquisition of the land; and\nany portion of the local share, private con\nmake planning grants directly to tribal plan-\n(7) Clarify the authority of States to par-\npanies would be permitted to put up 10\nticipate in the program.\npercent of such share.\nning councils or other bodies for planning on\nIndian reservations and would require that\nExtension of interim planning requirements\nTITLE VIII-SECONDARY MORTGAGE MARKET\nmetropolitan, regional, and district planning\nin water and sewer facilities program\nPurposes\nagencies, to the greatest extent practical, be\nSection 604.-Amends section 702(c) of the\nSection 801.-States that the purpose\ncomposed of or responsible to elected officials\nHousing and Urban Development Act of 1965\nthis title is to partition the Federal Nation\nof local governments. This section also au-\nto extend interim planning requirements in\nMortgage Association into two corporation\nMay 24, 1968\nCONGRESSIONAL RECORD - SENATE\n6395\n(1) Government National Mortgage Associa-\nSavings provisions\ntions to the Secretary of Agriculture for the\ntion (GNMA); and (2) Federal National\nSection 809.-Preserves causes of action\ncost of carrying out his administrative func-\nMortgage Association (FNMA).\nand legal proceedings existing or instituted\ntions under sections 235 and 236 of the Na-\nAmendments to the Federal National Mort-\nby or against the Federal National Mortgage\ntional Housing Act.\ngage Association Charter Act\nAssociation prior to the effective date SO\nPurchase of land for building sites\nSection 802.-Amends the Federal National\nthat such actions and proceedings will not\nSection 1004.-Amends section 514(f) (2)\nMortgage Association Charter Act (title III)\nabate.\nof the Housing Act of 1949 to broaden the\nof the National Housing Act to establish-\nTransitional provisions\neligibility purposes of domestic farm labor\n(a) Government National Mortgage Asso-\nSection 810.-Provides that the transitional\nhousing loans to include the purchase of\nciation:\nperiod would begin on the \"effective date\"\nnecessary land for building sites.\nWould operate existing special assistance\nand terminate when at least one-third of the\nTITLE XI-NATIONAL INSURANCE DEVELOPMENT\nand management and liquidating functions,\nstock is owned by private investors in the\nCORPORATION\nand\nhomebuilding, mortgage lending, real estate,\nWould be administered by Secretary of\nand related industries but no sooner than\nShort title\nHousing and Urban Development (now un-\nMay 1, 1970, or later than May 1, 1973. Dur-\nSection 1101.-Adds new title to be re-\nder FNMA Board of Directors and a Presi-\ning this period the President of the Federal\nferred to as \"The National Insurance Devel-\ndent).\nNational Mortgage Association will be ap-\nopment Corporation Act of 1968.\"\n(b) Federal National Mortgage Association:\npointed by the President of the United States\nFindings and declaration of purpose\nPurpose.-Would operate a privately fi-\nwith the advice and consent of the Senate\nand the Board of Directors would be limited\nSection 1102.-Includes a finding that the\nnanced secondary mortgage market for gov-\nto nine members. In the first year all nine\nunavailability of property insurance in\nernment supported mortgages.\nBoard of Directors.-Would consist of 15\nmembers would be appointed by the Secre-\ninner-city areas is accelerating the deteriora-\nmembers of which five would be appointed\ntary of Housing and Urban Development, in\ntion and threatening the economic well-being\nannually by the Secretary of Housing and\nthe second year seven would be appointed by\nof cities. States that the purpose of the bill\nUrban Development. The remaining mem-\nthe Secretary and two would be elected by\nis to encourage the development of statewide\nbers would be elected by the stockholders. Of\nthe stockholders, and in the third year and\nprograms to increase the availability of prop-\nthose members appointed by the Secretary,\nsubsequent period, five members would be\nerty insurance and to provide Federal rein-\none shall be from the homebuilding indus-\nappointed by the Secretary and the remainder\nsurance with appropriate State sharing in\ntry, one from the real estate industry, and\nelected by the stockholders. One of the Sec-\nreinsured losses due to civil disorders.\none from the mortgage lending industry.\nretary's appointees would have to be the\nAmendment of the National Housing Act\nPowers of Secretary of Housing and Urban\nPresident of FNMA.\nSection 1103.-Adds a: new title XII to the\nDevelopment.-Would have regulatory pow-\nTITLE IX-NATIONAL HOUSING PARTNERSHIPS\nNational Housing Act to establish the Na-\ners, including a requirement that a reason-\nSections 901-911-Authorizes the creation\ntional Insurance Development Corporation.\nable portion of mortgage purchases relate to\nof National Housing Partnerships in order to\nThe provisions of the proposed new title are\nlow and moderate income housing; also is-\nencourage private invéstors to provide low\nsummarized briefly below.\nsuance of securities would be subject to his\nand moderate income housing in substantial\nCreation and dissolution of National Insur-\napproval.\nvolume on a nationwide scale. Such a Na-\nand Development\nTreasury-held preferred stock.-Would be\ntional Partnership would form partnership\nSection 1201.-Creates the National In-\nretired as rapidly as possible after effective\nventures with local investors for the con-\nsurance Development Corporation within the\ndate.\nstruction of housing for low and moderate\nDepartment of Housing and Urban Develop-\nCommon stock.-Would continue to re-\nincome families.\nment, under the authority of the Secretary.\nquire mortgage sellers to purchase common\nThe title would authorize the creation of\nExecutive director\nstock; also each mortgage servicer would be\nfederally chartered privately funded corpo-\nrequired to hold up 2 percent of mortgages\nSection 1202.-Provides that, subject to\nrations to be organized under the District of\nserviced in common stock.\nColumbia Business Corporation Act. Such a\nsection 1201 the management of the Corpora-\ntion shall be vested in an Executive Director\nParticipations\ncorporation in turn would form a partner-\nSection 803.-Amends section 302(c) of\nship organized under this title and under the\nappointed by the President, by and with the\nadvice and consent of the Senate.\nthe Federal National Mortgage Association\nDistrict of Columbia Uniform Limited Part-\nCharter Act to permit GNMA, as trustee un-\nnership Act. The federally chartered Corpo-\nAdvisory Board, meetings, duties, compensa-\nder trusts created for sales of participation\nration would serve as the general partner and\ntion, and expenses\ncertificates, to issue such certificates for re-\nmanaging agent of the National Partnership\nSection 1203.-Establishes a 19-member\nfinancing purposes without regard to the re-\nand each of the stockholders and others\nAdvisory Board appointed by the Secretary.\nquirement of appropriation act authority.\ncould be limited partners. The Corporation\nDefinitions\nAny appropriation for insufficiencies accom-\nwould provide the staff and expertise for the\nSection 1204.-Contains definitions in this\npanying the original authorization would ap-\nPartnership in connection with the organiza-\ntitle.\nply as well to any \"rollover\" sale.\ntion and planning of specific local project\nundertakings in which the National Partner-\nPart A-Statewide Plans To Assure Fair Ac-\nMortgage-backed securities\nship would have an interest.\ncess to Insurance Requirements\nSection 804.-Amends section 304 of such\nTITLE X-RURAL HOUSING\nFair plans\nact to authorize the new Federal National\nMortgage Association to issue securities\nHousing for low and moderate income\nSection 1211.-Requires every insurer re-\npersons and families\ninsured by the Corporation to cooperate with\nbacked by an earmarked pool of portfolio\nSection 1001.-Adds a new section 521 to\nthe State insurance authority, in each State\nmortgages. This section would also authorize\nthe Government National Mortgage Associa-\ntitle V of the Housing Act to 1949 to author-\nin which it acquires reinsurance, in estab-\ntion to guarantee such securities as well as\nize the Secretary of Agriculture to make\nlishing and carrying out statewide plans to\nthose issued by approved private issuers.\ndirect and insured loans with interest-rate\nassure fair access to insurance requirements\nsubsidies in rural areas to low and moderate\n(\"FAIR\" Plans). These plans, which must be\nSubordinated and convertible obligations\napproved by the State insurance authority or\nSection 805.-Amends section 304 of such\nincome persons and families and to provide\nauthorized by State law, are to be admin-\nact to authorize the Federal National Mort-\nrental or cooperative housing for such per-\nistered under the supervision of the State in-\ngage Association to issue subordinated obli-\nsons and families where such persons and\nsurance authority and designed to make es-\ngations up to twice its capital and surplus.\nfamilies are unable to obtain housing under\nsential property insurance more readily\nsections 235 and 236 of the National Housing\nSpecial assistance authorization\navailable in, but not limited to, urban areas.\nAct, proposed by sections 101 and 201 of this\nSection 806.-Amends section 305(c) of\nbill.\nAll industry placement facility\nsuch act to authorize an additional $500 mil-\nHousing for rural trainees\nSection 1212.-Requires all plans to in-\nlion for the purchase of mortgages by the\nSection 1002.-Adds a new section 522 to\nclude an all-industry placement facility,\nGovernment National Mortgage Association\ntitle V of the Housing Act of 1949 to author-\ndoing business with all participating insur-\nin its special assistance function.\nize financial and technical assistance to\ners, to help agents and brokers to place in-\nAmendments to other laws\nStates or political subdivisions thereof, or\nsurance up to the full insurable value of a\nany public or private nonprofit organization\nproperty.\nSection 807.-Makes numerous changes in\nother laws necessitated by the establishment\nto provide, in rural areas, housing and re-\nIndustry cooperation\nof the new Federal National Mortgage Asso-\nlated facilities for rural trainees (and their\nSection 1213.-Requires every participating\nciation and the new Government National\nfamilies) enrolled in federally assisted train-\ninsurer to pledge with the State insurance\nMortgage Association.\ning courses to improve their employment ca-\nauthority its full participation and cooper-\nEffective date\npabilities when the Secretary determines\nation of the plan and the need to form a pool\nthat such housing and facilities could not be\nSection 808.-Provides that the partition\nor to adopt other programs to make essential\nreasonably provided in any other way.\nof the existing Federal National Mortgage\nproperty insurance more readily available.\nAssociation would become effective no more\nAppropriations\nPlan evaluation\nthan 120 days following the enactment of\nSection 1003.-Amends section 513 of the\nSection 1214.-Provides for transmission of\nthis act.\nHousing Act of 1949 to authorize appropria-\ncopies of plans and amendments by State\nS 6396\nCONGRESSIONAL RECORD\nMay 24, 1968\ninsurance authorities to the Corporation and\nizes the Corporation and the Comptroller\nCompensation of executive director\nfor these authorities to advise the Corpora-\nGeneral to conduct audits; and provides that\nSection 1106.-Provides for compensation\ntion with regard to the operation of the plan\nthe Corporation is to make use of State in-\nof the Executive Director at the rate pre-\nand the need to form a pool or to adopt other\nsurance authority examination reports and\nscribed for level IV of the Federal Executive\nprograms to make essential property insur-\nfacilities to the maximum extent feasible in\nSalary Schedule.\nance more readily available. The Corpora-\nconnection with these activities.\ntion may modify plan criteria as may be\nClarifying amendments to acts referring to\nStudy of reinsurance and other programs\nnecessary or desirable and upon certification\ndisasters\nby the State insurance authority waive com-\nSection 1235.Provides for the Corpora-\nSection 1107.-Would amend other acts to\ntion to study reinsurance and other means\npliance with one or more of the plan criteria.\ninclude \"riot or civil disaster\" in the defini-\nof assuring an adequate supply of burglary\nPart B-Reinsurance Coverage\ntions of \"disaster\" or \"catastrophe.\"\nand theft and other property insurance in\nReinsurance of losses from riots or civil\nurban areas and the adequate availability of\nTITLE XII-NATIONAL FLOOD INSURANCE ACT OF\ndisorders\nsurety bonds for construction contractors\n1968\nSection 1221.-Authorizes the Corporation\nin urban areas and to report to the President\nShort title\nto offer riot or civil disorder property loss re-\nand the Congress within 1 year the results\nSection 1201.-Adds new title to be referred\ninsurance to any insurer or pool of insurers\nof its study and its recommendations.\nto as \"National Flood Insurance Act of 1968.\"\nin any one or more States. Reinsurance may\nOther studies\nFindings and declaration of purpose\nbe provided immediately upon enactment of\nSection 1236.-Provides for the Corpora-\nSection 1202.States that a flood insur-\nthe title for a 90-day period, but thereafter\ntion, in cooperation with State insurance\nance program is feasible and can be initiated,\nonly if the insurer is participating in the\nauthorities and the private insurance indus-\nand should complement and encourage meas-\nState's plan under part A.\ntry, to study the operation of the FAIR plans,\nures to prevent flood damage; that if the\nReinsurance agreements and premiums\nthe extent of the unavailability of essential\nprogram is commenced on a gradual basis,\nSection 1222.-Authorizes the Corporation\nproperty insurance in urban areas, the\ntime and experience will enable it to be re-\nto provide reinsurance, to reimburse the in-\nmarket for private reinsurance, loss-preven-\nappraised and expanded; that the program\nsurer for losses in excess of the insurer's\ntion methods and procedures, insurance\ncan be carried out most effectively through\nretention, at premium rates adequate to pro-\nmarketing methods, and underwriting tech-\na cooperative effort on the part of the Fed-\nvide premiums which will exceed in aggregate\nniques.\neral Government and the private insurance\namount the insured riot losses in 1967, and\nGeneral powers of corporation\nindustry; and that a critical ingredient of\nprovides that thereafter the Corporation may\nSection 1237.-Authorizes the Corporation\nsuch a program will be the encouragement\nadjust reinsurance premium rates as may be\nto have a corporate seal, to sue and be sued\nof State and local governments to adopt land\nnecessary or appropriate after consultation\n(with all civil actions in which the Corpora-\nuse regulations to govern the development of\nwith the Board and the National Association\ntion is a party deemed to arise under the\nland exposed to flood damage. Calls for the\nof Insurance Commissioners.\nlaws of the United States), to enter into and\nPresident to submit to the Congress, within\nConditions of reinsurance\nperform contracts, leases, and other agree-\n2 years, a unified national program for flood\nSection 1223.Provides the conditions\nments without competitive bidding; to em-\nplain management, including any further\nunder which the Corporation will terminate\nploy a staff; to make necessary or appropri-\nproposals for the allocation of costs among\nate rules and regulations; and to exercise all\nbeneficiaries of flood protection.\nexisting reinsurance coverage and will not\npowers specifically granted by the title and\nAmendments to the Federal Flood Insurance\noffer new coverage for insurance written\nafter the termination date, including such\nsuch incidental powers as are necessary to\nAct of 1956\ncarry out its purposes.\nconditions as State assumption of a share of\nSection 1203(a) -Amends section 15(e) of\nService and facilities of other agencies—\nthe Federal Flood Insurance Act of 1956.\nreinsured losses, the adoption of additional\nutilization of personnel, services, facilities,\nThat section vested the Administrator of the\nprograms such as pools, and insurer partic-\nipation in State plans and programs.\nand information\nHousing and Home Finance Agency with au-\nthority to borrow $500 million in the aggre-\nRecovery of premiums: statute of\nSection 1238.-Authorizes the Corporation,\nlimitations\nwith the consent of the agency concerned,\ngate (or greater sums if authorized by the\nto utilize the personnel and information of\nPresident) from the Secretary of the Treas-\nSection 1224.-Authorizes the Corporation\nany agency of the Federal Government on a\nury. The amendment in section 1203(a) re-\nto recover any unpaid premiums for reinsur-\nreimbursable basis and to obtain data rele-\nlates to the interest formula which is to\nance; imposes a 5-year statute of limitations\nvant to matters within its jurisdiction from\napply to borrowed funds. Under section 1210\non the recovery by an insurer of excess pre-\nany Federal agency on a nonreimbursable\nof the bill, the borrowing authority would\nmiums paid to the Corporation or the re-\nbasis to the extent permitted by law.\nbe made specifically available to the Secre-\ncovery by the Corporation of reinsurance\ntary of Housing and Urban Development to\npremiums due to it.\nAdvance payments and finality of certain\ncarry out resopnsibilities which would be\nfinancial transactions\nPart C-Provisions of General Applicability\nvested in him under the bill.\nSection 1239.-Provides that the Corpora-\nSection 1203(b) -Strikes out obsolete lan-\nClaims and judicial review\ntion's financial transactions relating to re-\nguage from section 15(e) of the Federal Flood\nSection 1231.-Authorizes the Corporation\ninsurance shall be final and conclusive on\nInsurance Act of 1956.\nto adjust and pay claims for proved and ap-\nall officers of the United States and that the\nSection 1203(c).-Repeals all sections of\nproved losses, and allows a claimant to in-\nCorporation may make reinsurance payments\nthe Federal Flood Insurance Act of 1956, ex-\nstittue any action in the U.S. district court\nin advance or by way of reimbursement and\ncept section 15(e), relating to Treasury bor-\nwithin 1 year after receipt of notice of dis-\nin such installments and on such conditions\nallowance of a claim.\nrowing authority.\nas it may determine.\nDefinitions\nFiscal intermediaries and servicing agents\nTaxation\nSection 1204.-Defines: (1) \"flood\" as hav-\nSection 1232Authorizes the Corporation\nSection 1240.-Exempts the Corporation\ning such meaning as prescribed in regula-\nto contract with any insurer, pool, or other\nfrom local, State or Federal taxation and\ntions of the Secretary, and including inun-\nperson or organization for estimating or\nprovides that any State undertaking meas-\ndation from the overflow of streams, rivers,\ndetermining reinsurance claim payment\nures in meeting its obligations for reinsured\nor other bodies of waters, and from tidal\namounts, receiving, disbursing, and account-\nlosses shall not be subject to retaliatory or\nsurges, abnormally high tidal water, tidal\ning for reinsurance claim payments, audit-\nfiscal imposition by any other State.\nwaves, hurricanes, and other severe storms\ning insurers' records to assure proper pay-\nAnnual report\nor deluge; (2) \"United States\" and \"State\"\nments, establishing the basis of reinsurance\nSection 1241.-Requires the Secretary to\nas including the several States, the District\nliability, and otherwise assisting in carrying\nout the purposes of the title.\ninclude a report on the operations of the\nof Columbia, the territories and possessions,\nCorporation in his annual report.\nand the Commonwealth of Puerto Rico; (3)\nNational insurance development fund\n\"insurance company,\" \"other insurers,\" \"in-\nAppropriations\nSection 1233.Provides for the establish-\nsurance agents and brokers,' to include any\nment of a national insurance development\nSection 1242.-Authorizes to be appropri-\norganizations or individuals authorized to\nfund to be available to the Corporation with-\nated such sums as may be necessary to\nengage in the insurance business under the\nout fiscal year limitation to pay reinsurance\ncarry out this title.\nlaws of any State; (4) \"insurance adjust-\nclaims, to pay administrative expenses, and\nFinancing\nment organizations\" to include any organi-\nto repay with interest amounts borrowed un-\nSection 1104.-Amends section 520(b) of\nzations or persons engaged in the business\nder section 520(b) of the National Hous-\nthe National Housing Act to authorize the\nof adjusting loss claims arising under insur-\ning Act.\nSecretary to borrow funds necessary to pay\nance policies issued by licensed insurance\nRecords, annual statements, and audits\nfor reinsured losses under title XII of the act.\ncompanies or other insurers; (5) \"person\" as\nany individual, group of individuals, corpo-\nSection 1234.-Requires reinsured insurers\nGovernment Corporation Control Act\nration, partnership, association, or other\nto furnish the Corporation with annual state-\nSection 1105.-Defines the National In-\norganized group, including State and local\nments and such data as may be necessary in\nsurance Development Corporation as a\ngovernments and agencies; and (6) \"Secre-\ncarrying out this program and to keep rec-\nwholly owned Government corporation under\ntary\" as the Secretary of Housing and Urban\nords to facilitate an effective audit; author-\nthe Government Corporation Control Act.\nDevelopment.\nMay 24, 1968\nCONGRESSIONAL RECORD - SENATE\nS6397\nChapter I-The National Flood Insurance\nEstimates of premium rates\ntions to the Secretary of the Treasury) shall\nProgram\nSection 1208(a) .-Authorizes the Secre-\nbe vested in the Secretary.\nBasic authority\ntary, on the basis of studies and investiga-\nSection 1210(b) -Requires that borrowed\nSection 1205(a) -Authorizes the Secre-\ntions, to estimate on an area, subdivision, or\nTreasury funds must be deposited in the na-\ntary of Housing and Urban Development to\nother appropriate basis: (1) Risk premium\ntional flood insurance fund established under\nestablish and carry out a program to facili-\n(full cost) rates for flood insurance, (2) the\nsection 1211.\ntate the purchase of flood insurance to pro-\nrate (at below full cost, if necessary) which\nNational flood insurance fund\nvide against physical damage to real or per-\nwould be reasonable, would encourage the\nSection .-Authorizes the Secre-\nsonal property resulting from flood.\npurchase of flood insurance, and would be\ntary to establish in the U.S. Treasury a na-\nSection that this pro-\nconsistent with the purposes of the act, and\ntional flood insurance fund. Premium equali-\ngram shall be implemented to the maximum\n(3) the extent to which federally assisted or\nzation payments to the insurance pool, rein-\nextent practicable, through arrangements for\nother flood protection measures initiated\nsurance claims of the pool, and repayments\nfinancial participation and risk sharing by\nafter the effective date of the act affect the\nof borrowed moneys to the Secretary of the\ncompanies in the private insurance industry,\nestimates of rates mentioned in (1) and (2).\nTreasury (available from appropriations or\nand by other appropriate participation on a\nThe Secretary will base estimates of risk\nreinsurance premiums) will be charged to\nnon-risk-sharing basis by insurance com-\npremium rates on a consideration of the risks\nthe fund. Administrative expenses of carry-\npanies, agents, brokers, or adjustment orga-\ninvolved and accepted actuarial principles.\ning out the program may also be paid out of\nnizations.\nThe rates will reflect applicable operating\nthe fund.\nScope of program and priorities\ncosts and allowances of participating private\nSection .-Requires the fund to be\ninsurers, and, on a discretionary basis, non-\nSection 1206(a) .-Authorizes the Secretary\ndevelopmental Federal administrative ex-\ncredited with: (1) Borrowed Treasury funds,\nto make the flood insurance program avail-\n(2) reinsurance premiums payable by the in-\npenses which may be incurred in carrying out\nable initially for one- to four-family residen-\nthe flood insurance program.\nsurance pool, (3) amounts advanced to the\ntial properties.\nfund from appropriations in order to main-\nSection 1206(b) -Authorizes the Secretary\nSection 1208(b) -Provides that, in con-\ntain it on adequate levels, (4) interest on\nto extend coverage of the flood insurance\nducting the necessary rate studies and in-\nthe investment of surplus amounts in the\nprogram when, on the basis of studies and\nvestigations, the Secretary shall, to the ex-\nfund, (5) administrative expenses included\nother information, he determines that ex-\ntent feasible, utilize the services, or a re-\nin chargeable premium rates and which have\ntension would be feasible. Future coverage of\nimbursement basis, of the Army Corps of\nbeen paid to the Secretary, and (6) receipts\nthe program could be extended to: (1) Other\nEngineers, the Geological Survey, the Soil\nfrom other operations incident to the insur-\nresidential properties, (2) business proper-\nConservation Service, the Environmental\nance program; and, in the event the flood\nties, (3) agricultural properties, (4) proper-\nScience Services Administration, the Ten-\ninsurance program is carried out through\nties occupied by private nonprofit organiza-\nnessee Valley Authority, and other appro-\nthe facilities of the Federal Government, the\ntions, and (5) properties owned by State and\npriate Federal departments and agencies.\ninsurance premiums paid.\nlocal governments and agencies thereof.\nSection -Requires the Secretary\nSection (211(c).-Authorizes the Secre-\nSection .-Provides that flood in-\nto give priority to those States or areas that\ntary of the Treasury to invest surplus moneys\nsurance will be made available in only those\nhave evidenced a positive interest in flood\nin the fund in obligations issued or guaran-\nStates or areas (or subdivisions of areas)\ninsurance, in making rate studies and\nteed by the United States, if: (1) All out-\nwhich the Secretary determines had evi-\ninvestigations.\nstanding obligations have been liquidated,\ndenced a positive interest in the flood insur-\nEstablishment of chargeable premium rates\nand (2) any outstanding amounts that have\nance program, and had given satisfactory as-\nSection 1209(a) -Authorizes the Secretary,\nbeen advanced to the fund from appropria-\nsurances that by June 30, 1970, permanent\nafter consultation with the flood insurance\ntions for reinsurance payments to the pool\nland use and control measures, consistent\nadvisory committee and representatives of\nhave been credited to that appropriation,\nwith criteria prescribed in section 1261, or\nthe State insurance authorities, to establish\nwith interest accrued at a rate based on the\nfor land management and use, have been\nchargeable premium rates and the areas,\naverage current yield on outstanding market-\nadopted, and that application and enforce-\nterms and conditions for the application of\nable obligations of the United States of com-\nment of these measures would commence as\nsuch rates. Rates will be determined on the\nparable maturities.\nsoon as technical information on floodways\nbasis of estimates made under section 1208\nSection 1211(d).-Provides that the fund\nand on controlling flood elevations was\nand other necessary information.\nwill be available to finance the operation of\navailable.\nSection 1209(b) .-Provides that, in pre-\nthe flood insurance program if the Secretary\nThis would not require the same land\nscribing chargeable rates, the Secretary shall\nfinds that it should, in whole or in part, be\nmanagement and use measures for all areas,\nbe guided by a number of factors, including\ncarried out through the facilities of the Fed-\nsince these measures must meet the particu-\nthe consideration of the respective risks in-\neral Government, including costs incurred in\nlar flood problems of each area.\nvolved, the differences in risk due to land\nthe adjustment and payment of loss claims\nNature and limitation of insurance coverage\nuse measures, floodproofing, flood forecasting\nand payment of applicable operating costs of\nSection 1207 -Authorizes the Secretary,\nand similar measures. The Secretary would\nprivate insurers if such companies are in-\nafter consultation with the flood insurance\nbe authorized to prescribe chargeable rates\nvolved. Any premiums paid are to be de-\nadvisory committee, and representatives of\nat reasonable levels, lower than those at full\nposited in the fund.\nthe State insurance commissioners, to pro-\ncost where necessary, in order to encourage\nOperating costs and allowances\nvide by regulation for the general terms and\nthe purchase of flood insurance. In low-risk\nSection -Directs the Secretary to\nconditions of insurability applicable to prop-\nareas the chargeable rate for existing prop-\nerties will be the same or close to the esti-\nnegotiate with appropriate representatives of\nerties eligible for flood insurance. A repre-\nmated full cost rate. The higher the flood\nthe insurance industry, from time to time,\nsentative organization of all State insurance\nauthorities, such as the National Association\nrisk for an area, the lower the chargeable rate\nfor the purpose of prescribing a current\nwould be, in relation to the estimated full-\nschedule of operating costs applicable to risk-\nof Insurance Commissioners, will be called\nupon for purposes of consulting State insur-\ncost rate. Under this section, all chargeable\nsharing and non-risk-sharing participants\nance authorities. These terms and conditions\nrates will be stated so as to reflect their basis,\nin the flood insurance program, and a cur-\nincluding any differences from the estimated\nrent schedule of operating allowances\nwill include the types and locations of eli-\nfull-cost risk premium rates.\n(profits) applicable to risk-sharing insurers.\ngible properties; the nature and limits of in-\nThese schedules will be prescribed in regula-\nsurable losses; the classification, limitation,\nSection 1209(c) -Provides that after an\ntions.\nand rejection of risks; and appropriate mini-\narea has been identified as being flood-prone\nmum premiums and loss-deductibles.\nand this information was published in the\nSection 1212(b).-Specifies that operating\nSection 1207(b) .-Provides that insurance\narea, then newly constructed property or sub-\ncosts include: (1) Expense reimbursements\nstantially improved property can be insured\ncovering the expenses of selling and servic-\ncoverage for one- to four-family residential\nonly at rates which are not less than the\ning the insurance, (2) reasonable compensa-\nproperties will be limited to $15,000 aggregate\nestimated (full cost) risk premium rate.\ntion or commissions payable for selling and\nliability for any dwelling unit and $30,000 for\nany dwelling structure of from two to four\nSection 1209(d) -Provides that where any\nservicing the insurance, (3) loss adustment\nexpenses, and (4) other expenses which the\nunits. Liability for personal property will be\nchargeable premium rate is equal to the esti-\nSecretary finds were incurred in selling or\nlimited to $5,000 for the contents of each\nmated risk premium rate (full cost) for the\nservicing the insurance. Operating allow-\ndwelling unit. Both real property and con-\narea, and if the rates include any amount for\nances include amounts for profit and con-\ntents will be subject to an appropriate loss-\nadministrative expenses of the Federal Gov-\ntingencies which the Secretary finds reason-\ndeductible clause. For any other properties\nernment in carrying out the flood insurance\nable and necessary.\nwhich will become eligible for flood insur-\nprogram (in the Secretary's discretion under\nsection 1208), a sum equal to that amount is\nPayment of claims\nance coverage in the future (such as small\nbusiness properties), the aggregate liability\nto be paid to the Secretary to be deposited in\nSection 1213-Authorizes the Secretary to\nthe insurance fund.\nfor any single structure will be $30,000. These\nprescribe regulations establishing methods\nlimits will apply to any insurance sold at\nTreasury borrowing authority\nfor the adjustment and payment of claims\npremiums below full actuarial cost. Insurance\nfor losses to property insured under the flood\nSection 1210(a) -Provides that the au-\ncoverage could be doubled under this section,\nthority vested in the Housing and Home Fi-\ninsurance program.\nbut any excess over the limits specified will\nnance Administrator by section 15(e) of the\nDissemination of flood insurance information\nrequire the payment of premium rates at full\nFederal Flood Insurance Act of 1956 (per-\nSection 1214.-Directs the Secretary to\ncost.\ntaining to the issue of notes or other obliga-\nmake information and data available to the\nS 6398\nCONGRESSIONAL RECORD SENATE\nMay 24, 1968\npublic and to any State and local agency re-\nInitial program limitations\nPremium equalization payments\ngarding: (1) The coverage and objectives of\nSection 1220.-Provides that the face\nSection 1234(a).-Directs the Secretary,\nthe flood insurance program, and (2) esti-\namount of flood insurance coverage out-\non such terms and conditions as he shall\nmated and chargeable flood insurance pre-\nstanding and in force at any given time can-\nprovide, to make periodic payments to the\nmium rates, and the basis for the difference\nnot exceed $2.5 billion.\npool in recognition of any reduction made in\nbetween such rates.\nReport to the President\nchargeable premium rates under estimated\nProhibition against certain duplications of\nSection 1221.-Directs the Secretary to in-\nrisk premium rates in order to provide flood\nbenefits\ninsurance on reasonable terms.\nclude a report on the operations of the flood\nSection 1215(a) -Contains provisions\ninsurance program provided for under this\nSection that payments\nwhich will prevent Federal disaster assistance\nact in his annual report to the president for\nfor a share of the claims paid in a given\nfrom being made available to compensate for\nsubmission to the Congress.\nperiod will be based on the aggregate amount\nany loss to the extent it is covered by flood\nof flood insurance retained by the pool after\ninsurance. Also provides that no such assist-\nChapter II-Organization and Administra-\nceding reinsurance in accordance with sec-\nance shall be made available to the extent\ntion of the Flood Insurance Program\ntion 1235.\nlosses of real or personal property could have\nOrganization and administration\nSubject to the limiting terms and condi-\nbeen covered (at the maximum limits) if\nSection 1230.-Directs the Secretary, after\ntions of the basic agreement between the\nflood insurance was actually available more\nsuch consultation with representatives of\nSecretary and the pool under section 1232,\nthan 1 year prior to the loss. Authority is pro-\nthe insurance industry as may be necessary,\nthe Secretary is also authorized to make\nvided for the Secretary to prescribe, by regu-\nto implement the flood insurance program by\npayments to the pool for a proportionate\nlations, an exception to this latter provision\nproviding for an industry program with Fed-\namount of applicable operating costs (in-\nfor low-income persons who might otherwise\neral financial assistance. In the event this\ncluding only administrative expenses) and\nbenefit from such assistance.\nprogram proves unworkable, the Secretary is\nallowances on the sanie ratio basis as used\nSection 1215(b) .-Provides that \"Federal\ndirected to provide for a Federal program\nto determine the sharing of claim payments.\ndisaster assistance\" includes any Federal fi-\nwith industry assistance.\nSection -Authorizes the Secretary\nnancial assistance made available to any per-\nPart A-Industry Program With Federal\nto establish designated pay periods and the\nson as a result of (1) A major disaster, as\nFinancial Assistance\nmethods for determining the sum of prem-\ndetermined by the President pursuant to \"An\niums paid or payable during such periods.\nAct to authorize Federal Assistance to State\nIndustry flood insurance pool\nReinsurance coverage\nand local governments in major disasters,\nSection .-Authorizes the Secretary\nand for other purposes\" (42 U.S.C. 1855-\nto encourage and assist private insurers to\nSection 1235(a) -Authorizes the Secre-\n1855g); (2) a natural disaster, as determined\njoin together in a pool to provide flood in-\ntary to take such action as may be necessary\nby the Secretary of Agriculture pursuant to\nsurance coverage and to participate finan-\nto make available reinsurance coverage to\nsection 321 of the Consolidated Farmers\ncially in underwriting the risk assumed and\nthe insurance pool for excess losses.\nHome Administration Act of 1961; (3) a dis-\nin assuming responsibility for some propor-\nSection 1235(b) -Authorizes entering into\naster with respect to which loans may be\ntion of claims for losses.\ncontracts, agreements or other arrangements\nmade under section 7(b) of the Small Busi-\nSection -Authorizes the Secre-\nto provide reinsurance, in consideration of\nness Act.\ntary to prescribe rquirements for private in-\npremiums, fees, or other charges as the Sec-\nSection 1215(c) -Makes the term \"finan-\nsurers participating in the pool, including,\nretary finds necessary to cover anticipated\ncial assistance\" as used in section 10 of the\nbut not limited to, minimum requirements\nlosses.\nDisaster Relief Act of 1966 (which directs\nfor capital or surplus or assets.\nSection 1235(c) -Authorizes the Secre-\nthat Federal assistance programs be admin-\nAgreements with flood insurance pool\ntary to negotiate an excess loss agreement\nistered to avoid duplication of benefits) in-\nwith the insurance industry pool whereby\nclude flood insurance.\nSection 1232(a) -Authorizes the Secre-\nclaims above a certain limit will be sub-\nState and local land use controls\ntary to enter into agreements with any in-\nmitted to the Secretary on a portfolio basis,\nsurance pool as he deems necessary to carry\nSection 1216.-Provides that after June 30,\nand paid by the Federal Government.\nout the purposes of this act.\n1970, no new flood insurance coverage (in-\nSection 1235(d) -Provides that reinsur-\ncluding renewals) will be provided in any\nSection 1232(b) -Provides that any agree-\nance claims must be submitted on a port-\nment with a pool shall specify the terms and\narea unless an appropriate public body had\nfolio basis, in accordance with terms and\nadopted permanent land use and control\nconditions under which: (1) Risk capital\nconditions as may be established by the Sec-\nmeasures, with effective enforcement provi-\nwill be available for the adjustment and pay-\nretary.\nsions, which the Secretary finds consistent\nment of claims, (2) the pool and its par-\nSection 1235(e) -Provides that such pool\nwith the comprehensive criteria for land\nticipants will participate in premiums re-\nshall make no distribution of earnings for a\nmanagement and use prescribed under sec-\nceived and profits or losses, (3) the maxi-\nperiod of up to 5 years based on flood insur-\ntion 1261.\nmum amount of profit which may be re-\nance premiums, unless the aggregate cumula-\nalized as established by the Secretary under\nProperties in violation of State and local law\ntive premiums, fees, or other charges estab-\nsection 1212, (4) operating costs prescribed\nlished for excess loss reinsurance under sub-\nSection 1217.-Prohibits any new flood in-\nunder section 1212 and allowances are to be\nsection (b) and collected for deposit in the\nsurance (including renewals) for property\npaid, and (5) premium equalization pay-\nnational flood insurance fund exceeds the\nwhich violates State cr local laws, regulations,\nments and reinsurance claims will be paid.\naggregate cumulative expenses paid for re-\nor ordinances which are intended to dis-\nSection .-States that the agree-\ninsurance claims by such fund.\ncourage or otherwise restrict land develop-\nments will also contain such provisions as\nment or occupancy in flood-prone areas.\nPart B-Government Program\nthe Secretary finds necessary to assure that:\nCoordination with other programs\n(1) No qualified insurer wishing to parti-\nFederal operation of the program\nSection 2118.-Directs the Secretary to con-\ncipate in the pool will be excluded, (2) in-\nSection 1240(a) -Authorizes the Secre-\nsult with Federal, State and local agencies\nsurers participating in the pool will provide\ntary, after consultation with representatives\nhaving responsibilities for flood control, flood\ncontinuity of flood insurance coverage, and\nof the insurance industry if he makes a de-\nforecasting, and flood damage prevention,\n(3) other insurance companies, agents, and\ntermination that the flood insurance program\nin order to assure mutual consistency between\nbrokers will to the maximum extent prac-\ncannot be effectively carried on through\nthe programs of such agencies and the flood\nticable be permitted to cooperate with the\nthe insurance pool, to take the necessary\ninsurance program.\npool as fiscal agents or otherwise on a non-\nsteps to operate the program through the fa-\nrisk-sharing basis. This section assures that\ncilities of the Federal Government, either\nAdvisory committee\nno insurance companies shall be excluded\nby: (1) Utilizing insurance companies, other\nSection 1219(a) -Directs the Secretary to\nfrom the program on the basis of considera-\ninsurers, agents, brokers, and adjustment\nappoint a flood insurance advisory commit-\ntions such as size.\norganizations as flscal agents of the United\ntee. The purpose of the committee is to ad-\nStates, (2) by utilizing employees of the De-\nvise the Secretary with respect to the ad-\nJudicial Review\npartment of Housing and Urban Develop-\nministration of this act and in the prepara-\nSection 1233.-Authorizes private insurers\nment or other Government employees (by\ntion of the regulations prescribed in the act.\nparticipating in the pool to adjust and pay\narrangement with the heads of other agen-\nSection 1219(b) -Provides that the com-\nclaims for losses and permits any claimant,\ncies), or (3) by a combination of alternatives\nmittee shall consist of not more than 15\nupon disallowance of a claim, or upon the\n(1) and (2) above.\npersons selected from: (1) The insurance\nclaimant's refusal to accept the amount al-\nSection 1240(b) -Provides that at least\nindustry, (2) State and local governments,\n(3) lending institutions, (4) the home-build-\nlowed on a claim, to institute an action,\n90 days before an all-Federal program of in-\nwithin 1 year after notice of disallowance is\nsurance is entered into by the Secretary, dur-\ning industry, and (5) the general public.\nmailed, in the U.S. district court for the dis-\ning all of which time Congress shall be in\nSection 1219(c) -Provides that committee\nmembers, while attending conferences or\ntrict in which the insured property or the\nsession, he shall make a report to the Con-\ngress which will: (1) State the reasons for\nmeetings, will be compensated at a rate fixed\nmajor portion of it was situated. Jurisdiction\nhis determinaton that a program under the\nby the Secretary not to exceed $100 a day\nwould be conferred on the district court\nindustry-Government option in part A can-\nand to also receive travel and living ex-\nwithout regard to the amount in controver-\nnot be carried out, (2) support such deter-\npenses when serving away from their homes\nsy. Claimants could also avail themselves of\nmination by pertinent findings, (3) indicate\nor regular places of business.\nlegal remedies in State courts.\nthe extent to which he anticipates the in-\nMay 24, 1968\nCONGRESSIONAL RECORD SENATE\n$ 6399\ndustry will be utilized in the all-Federal pro-\nof any claims arising from the financial\nchase of such property. The Secretary is then\ngram, and (4) make any other recommenda-\ntransactions which he is authorized to carry\nauthorized to transfer such property to those\ntions he deems advisable.\nout under the act. The Secretary may, how-\nState or local agencies agreeing to use the\nAdjustment and payment of claims\never, refer such disputes to arbitration.\nproperty for at least 40 years for those pur-\nSection 1241-Authorizes the Secretary to\nSection b).-Specifies that this arbi-\nposes as the Secretary may, by regulation,\nadjust and pay claims, and authorizes any\ntration would only be advisory in nature.\ndetermine to be consistent with sound land\nclaimant, upon disallowance of a claim, or\nRecords and audit\nuse and management. This authority is vol-\nupon refusal of the claimant to accept an\nuntary and no property owner would be re-\nSection -Provides that any flood\namount allowed, to institute an action, with-\nquired to sell or lease his property to the\ninsurance pool receiving financial assistance\nin 1 year after notice of disallowance or par-\nSecretary.\nunder the program, and any pool, company,\ntial disallowance, is mailed, in the U.S. dis-\nor other private organization which has en-\nChapter IV-Appropriations and miscel-\ntrict court for the district in which the in-\ntered into any contract, agreement, or other\nlaneous provisions\nsured property or the major portion of it was\narrangement with the Secretary under parts\nStudies of other natural disasters\nsituated. Jurisdiction would be conferred on\nB and C of chapter II, shall keep such records\nSection -Authorizes the Secretary\nthe district court without regard to the\nas the Secretary prescribes. Such records are\nto make studies to determine the extent to\namount in controversy.\nto fully disclose the total costs of the pro-\nwhich insurance protection against earth-\nPart C-Provisions of General Applicability\ngrams undertaken or services rendered, SO as\nquakes or other natural disasters is not\nServices by insurance industry\nto facilitate an effective audit.\navailable and the feasibility of making such\nSection 1245 -Provides legal authority\nSection 1248 -Provides that the Comp-\nprotection available.\nfor the Secretary to enter into the necessary\ntroller General and the Secretary (or their\nSection 1270(b) .-Provides that studies\narrangements with the insurance industry to\nduly authorized representatives shall have\nunder this section be made in cooperation\nimplement the flood insurance program set\naccess to any books, documents, papers, and\nwith other Federal, State, or local agencies,\nforth in the act, including provisions for pay-\nrecords of the pool, insurance company or\nand authorizes the Secretary to enter into\nment of applicable operating costs and allow-\nother private organizations, which are perti-\nagreements for the conduct of such studies\nances for such facilities and services.\nnent to the costs of the prograins set forth\nwith other Federal agencies, on a reim-\nSection -Exempts any such ar-\nin this act.\nbursement basis, or with State and local\nrangements from any provisions of Federal\nChapter III-Coordination of flood insurance\nagencies.\nlaw requiring competitive bids or requiring\nwith land-management programs in flood-\nPayments\nthat contracts or purchases of supplies or\nprone areas\nSection 1271.-Vests discretion in the Sec-\nservices by the Federal Government be made\nIdentification of flood-prone areas\nretary to make payments under this pro-\nonly after advertisement is provided for a\nSection 1260.-Authorizes the Secretary,\ngram in advance of their actual need, or by\nsufficient time to allow competitive proposals\nutilizing the Army Corps of Engineers, the\nway of reimbursement.\nto be made.\nGeological Survey, the Soil Conservation\nGovernment Corporation Control Act\nUse of insurance pools, companies, or other\nService, the Environmental Science Services\nSection 1272.-Makes the provisions of the\nprivate organizations for certain payments\nAdministration, TVA, and other Federal de-\nGovernment Corporation Control Act ap-\nSection 1246(a) .-Authorizes the Secretary\npartments and agencies, to identify and pub-\nplicable in the administration of the flood\nto enter into contracts with any pool, insur-\nlish information within 5 years after the\ninsurance program to the same extent as\nance companies, or other private organiza-\neffective date of the act with respect to all\napplicable to wholly owned Government cor-\ntons he finds acceptable for use as fiscal in-\nflood plain areas, including coastal areas in\nporations.\ntermediaries. Such intermediaries could (1)\nthe United States, which have special flood\nFinality of certain financial transactions\nestimate and determine amounts of Federal\nhazards. The Secretary is also required to\nestablish within 15 years, flood risk zones in\nSection 1273.-Provides that any financial\npayments, and (2) audit participating in-\nthese areas and to make estimates with re-\ntransaction under this act or payment re-\nsurers, agents, brokers, or adjustment organi-\nceived or made in connection therein shall\nzations, as may be necessary to assure that\nspect to the rates of probable flood-caused\nloss for the various flood risk zones for each\nbe final and conclusive upon all officers of\nproper payments are made.\nthe Government.\nSection -Provide that any con-\narea.\ntract may contain provisions necessary to\nCriteria for land management and use\nAdministrative expenses\ncarry out the Secretary's responsibilities,\nSection .--Authorizes the Secretary\nSection 1274.Provides that any admin-\nunder the provisions of the act.\nto carry out studies or investigations with\nistrative expenses of the Federal Government\nSection -Provides that contracts\nregard to the adequacy of State and local\nin carrying out the fiood insurance program\nauthorized by this section would be exempted\nfrom any provisions of Federal law requiring\nmeasures in flood-prone areas, as to land\nmay be paid out of appropriated funds.\ncompetitive bidding or requiring that con-\nmanagement and use, flood control, flood\nAppropriations\ntracts or purchases of supplies or services by\nzoning, and flood damage prevention.\nSection 1275(a) .-Authorizes the appro-\nthe Federal Government be made only after\nSection --Provides that these\npriations necessary to carry out the flood\nadvertisement is provided for a sufficient\nstudies and investigations deal with laws,\ninsurance program, including sums to cover\ntime to allow competitive proposals to be\nregulations or ordinances relating to en-\nadministrative expenses and to reimburse\nmade.\ncroachments and obstructions on stream\nthe national flood insurance fund for pre-\nSection (d).-Requires a finding by\nchannels and floodways, the orderly develop-\nmium equalization payments and reinsur-\nthe Secretary that the contracting party can\nment and use of flood plains of rivers or\nance claims paid out of the fund.\nperform its obligations efficinetly and effec-\nstreams, floodway encroachment lines or flood\nSection 1275(b) -Provides that these\ntively before a contract can be entered into.\nplain zoning, building codes, building per-\nfunds shall be available without fiscal year\nSection 1246(e).-Provides that the Sec-\nmits, and subdivisions or other building\nlimitation.\nretary is authorized to require a safety bond\nrestrictions.\nEffective date\nfrom any organization performing responsi-\nSection -Provides that based on\nSection 1276.-Provides for the act to be-\nbilities under the authority granted and any\nhis studies and investigation, the Secretary\ncome effective 120 days following the date\nof its officers and employees. No individual\nis authorized to develop comprehensive cri-\nof enactment, except that the Secretary is\ndesignated to certify payments will be liable\nteria designed to encourage, where necessary,\nauthorized to extend the effective date up\nwith respect to payments certified by him\nthe adoption of permanent State or local\nto 180 days afer enactment if he finds condi-\nin the absence of gross negligence or intent\nmeasures which will lessen the exposure of\ntions necessitate a long preparatory period.\nto defraud the United States. No officer dis-\nproperty and facilities to flood losses, im-\nTITLE XIII-INTERSTATE LAND SALES\nbursing funds in accordance with a proper\nprove the long-range management and use of\nflood-prone areas, and inhibit, to the maxi-\nShort title\ncertification of payments would be liable\nwith respect to such payments in the absence\nmum extent feasible, unplanned and eco-\nSection 1301.-Provides that this title may\nof gross negligence or intent to defraud the\nnomically unjustifiable future development\nbe cited as \"The Interstate Land Sales Full\nUnited States.\nin such areas. The Secretary is also author-\nDisclosure Act\".\nSection ).-Specifies that contracts\nized to work closely with and provide any\nDefinitions\nwill be automatically renewable from year to\nnecessary technical assistance to State, inter-\nstate, and local governmental agencies to en-\nSection 1302.-Defines the terms contained\nyear in the absence of notice from either\nparty as to termination, except that the\ncourage the application of such criteria and\nin this title.\nSecretary may terminate a contract after rea-\nthe adoption and enforcement of such meas-\nExemptions\nsonable notice if he determines that the\nures as may be necessary to help in reducing\nSection 1303 .-Provides for specific ex-\nother party has substantially failed in its ob-\nany unnecessary damages resulting from\nemptions from the provisions of the act.\nligations or in carrying them out in a man-\nfloods.\nSection 1303 -Provides that the Sec-\nner inconsistent with the efficient and effec-\nPurchase of certain insured properties\nretary of HUD may make exemptions from\ntive administration of the flood insurance\nSection 1262.-Authorizes the Secretary to\nany of the provisions of the act if he finds\nprogram.\nnegotiate with owners of real property cov-\nthe coverage is not necessary in the public\nSettlement and arbitration\nered by flood insurance which are located in\ninterest and for the protection of purchasers\nSection 1247 .-Authorizes the Secretary\nany flood-risk area, and damaged substan-\ndue to the small amount of the offering or\nto make final determination and settlement\ntially beyond repair by flood, for the pur-\nits limited character.\nS6400\nCONGRESSIONAL RECORD - SENATE\nMay 24, 1968\nProhibitions relating to the sale or lease of\nbooks and papers of the developer, his agent,\nSection 1315(b) -Authorizes the Secretary\nlots in subdivisions\nor any other person when the matter is\nto initiate investigations to determine if any\nSection 1304(a).-Makes it unlawful for\nrelevant to the examination.\nperson has violated or is about to violate\nany developer or agent engaged in inter-\nSection any notice re-\nthe act or rules or regulations prescribed pur-\nstate commerce (1) to sell or lease any lot\nquired under section 1307 to be sent to or\nsuant to it.\nunless a statement of record is in effect pur-\nserved on the developer or his authorized\nSection 1315(c).-Empowers the Secretary\nsuant to section 1307 and a printed property\nagent.\nor his designee to administer oaths and af-\nreport is furnished to each purchaser in ac-\nInformation required in property report\nfirmations, subpena witnesses, compel their\ncordance with section 1308; (2) to employ\nattendance, take evidence, and require the\nany device, scheme, or artifice to defraud;\nSection 1308(a).-Provides that a property\nproduction of any books, papers, correspond-\nto obtain money or property by means of a\nreport shall contain any information in the\nence, memorandums, or other records rele-\nmisrepresentation with respect to informa-\nstatement of record that the Secretary deems\nvant or material to an investigation or pro-\ntion in the statement of record or the prop-\nnecessary, as well as any other information\nceeding under the act.\nerty report or any other information; or to\nprescribed under rules and regulations of the\nSections 1315 (d) and (e) .-Provide for en-\nengage in any transaction, practice, or course\nSecretary as necessary or appropriate.\nforcement of subpenas issued by the Secre-\nof business which operates or would operate\nSection 1308(b) .-Requires that the prop-\ntary in the U.S. district courts and for pro-\nas a fraud or deceit on the purchaser.\nerty report not be used for any promotional\ncedures concerning attendance and testify-\nSection 1304(b).-Provides that a pur-\npurposes before the statement of record be-\ning at hearings prescribed by the Secretary.\nchaser may revoke a contract or agreement of\ncomes effective and then only if used in its\nAdministration\npurchase if he is not given a copy of the\nentirety. States that no person may adver-\nproperty report before or at the time of his\ntise or represent that the Secretary approves\nSection 1316(a) authority and re-\nsigning the contract. Where the purchaser\nor recommends the subdivision.\nsponsibility for administering the act in the\ndoes not receive the property report 48 hours\nCooperation with State authorities\nSecretary of Housing and Urban Development\nbefore signing the contract, he may revoke\nand gives him authority to delegate any\nSection 1309(a) -Provides that the Secre-\nit within 48 hours, unless the purchaser read\nfunctions, duties, and powers under the act\ntary of Housing and Urban Development\nthe property report, and inspected the lot\nto employees of the Department or to boards\nshall cooperate with State authorities re-\nto be purchased before signing the contract\nof such employees in accordance with the\nsponsible for regulating the sale of lots in\nand SO stipulates in writing.\nprovisions of sections 3105, 3344, 3562, and\nsubdivisions subject to the act. It permits\n7521 of title 5 of the United States Code.\nRegistration of subdivisions\nthe Secretary to accept for filing under, and\ndeclare effective as a statement of record,\nSection 1316(b) -Requires that hearings\nSection 1305(a) -Provides that a subdivi-\nmaterial filed with and found acceptable by\nbe public and appropriate records be kept.\nsion may be registered by filing a statement\nof record with the Secretary meeting the re-\nsuch authorities.\nUnlawful representations\nquirements of the act and the rules and\nSection 1309(b) that nothing in\nSection 1317.-Provides that the fact that\nregulations prescribed by the Secretary.\nthe act shall affect the jurisdiction of any\na statement of record has been filed or is in\nSection 1305(b) for payment to\nState real estate commission.\neffect does not constitute a finding by the\nthe Secretary by the developer of a registra-\nCivil liabilities\nSecretary of Housing and Urban Development\ntion fee not in excess of $1,000 in accordance\nSection 1310.-Provides for civil liabilities\nthat it is true and accurate on its face or\nwith a schedule to be fixed by regulations\nof the Secretary.\nagainst a developer or agent who sells or\nthat the Secretary has passed on the merits\nleases lots in a subdivision in violation of the\nor approved a subdivision.\nSection 1305(c) -Provides that the filing\nof a statement of record or an amendment\nprovisions of the act.\nPenalties\ntakes place on its receipt accompanied by\nCourt review of orders\nSection 1318.-Establishes penalties for any\npayment of the fe provided in subsection\nSection any person ag-\nperson who violates the provisions of the act\n(b).\ngrieved by an order or determination of the\nor any rules any regulations issued pursuant\nSection 1305(d).-Requires that informa-\nSecretary, which was issued after a hearing,\nto the provisions of the act. The maximum\ntion contained in or filed with a statement\nto obtain review in the U.S. court of ap-\npenalty is a fine of not more than $5,000 or\nof record be available to the public under\npeals for the circuit in which the person re-\nimprisonment for not more than 5 years, or\nregulations prescribed by the Secretary.\nsides or has his principal place of business\nboth.\nInformation required in statement of record\nor in the U.S. Court of Appeals for the Dis-\nRules, regulations, and orders\ntrict of Columbia.\nSection 1306.Provides that the state-\nSection 1319.-Authorizes the Secretary of\nment of record shall contain certain infor-\nSection Provides that com-\nHousing and Urban Development to make,\nmation and be accompanied by certain speci-\nmencement of proceedings under subsection\nissue, amend, and rescind rules, regulations,\nfied documents.\n(a) will not stay the Secretary's order unless\nand orders necessary or appropriate to the\nspecifically ordered by the court.\nexercise of his functions and powers under\nTaking effect of statements of record or\namendments thereto\nLimitation of actions\nthe act.\nJurisdiction of offenses and suits\nSection 1307(a).-Provides that a state-\nSection 1312.-Bars the bringing of an\nment of record, or any amendment, shall take\naction to enforce any liability created under\nSection 1320.-Provides that the U.S. dis-\neffect on the 30th day after filing or at an\nsection 1310 (a) or (b) (2) unless it is\ntrict courts and the U.S. District Court for\nearlier date if the Secretary SO determines.\nbrought within 1 year after discovery of the\nthe District of Columbia shall have jurisdic-\nWhen additional lands are offered for dispo-\nuntrue statement or the omission or after\ntion of offenses and violations under the act\nsition, a developer may consolidate the state-\nthe discovery should have been made. If the\nand the rules and regulations prescribed pur-\nment with any prior statement of record of-\naction is to enforce a liability established\nsuant to it. It provides these courts con-\nfering subdivided land under the same pro-\nunder section 1310(b) (1), it must be brought\ncurrent jurisdiction with State courts for all\nmotional plan.\nwithin 2 years after the violation upon which\nsuits in equity or at law to enforce liabilities\nSection 1307 -Provides that the Secre-\nit is based. No action under the act may be\nor duties created by this act.\ntary advise the developer within a reason-\nbrought more than 3 years after the sale or\nAppropriations\nable time if the statement is materially de-\nlease of the property.\nSection 1321.-Authorizes appropriation to\nfective. Such notification suspends the effec-\nContrary stipulations void\ncarry out the purposes of this act.\ntive date until 30 days after a corrective\nSection 1313.-Provides that any condition,\nfiling is made. The developer may, however,\nEffective date\nstipulation, or provision requiring a person\nrequest a hearing which must be held within\nto waive compliance with the act, or rules\nSection 1322.-Provides that the act shall\n20 days of the Secretary's receipt of the\nand regulations of the Secretary pursuant to\nbe effective 180 days after enactment.\nrequest.\nit, shall be void.\nTITLE XIV-TEN-YEAR HOUSING PROGRAM\nSection .-Requires the developer to\nfile an amendment to a statement if any\nAdditional remedies\nSections 1401-1404.-Adds new provisions\nchange occurs subsequent to its effective date\nSection 1314.Provides that rights and\nto the housing laws requiring the President\nremedies under the act are in addition to\nto submit a report, not later than January\nwhich affects any material fact required to\nbe contained in the statement.\nother rights and remedies at law or equity.\n15, 1969, containing a 10-year plan for the\nnational housing needs, along with legislative\nSection 1307(d) .-Permits the Secretary to\nInvestigations, injunctions, and prosecution\nrecommendations for fulfilling these needs.\nsuspend a statement of record if it appears\nof offenses\nIn addition, these sections require annual\nto him that it includes an untrue statement\nSection 1315(a) .-Authorizes the Secretary\nreports to be made by the President on Jan-\nof a material fact or omits to state a ma-\nto file suit to prohibit violations of the act or\nuary 15, 1970, and on each succeeding year\nterial fact required to be stated or necessary\nany rule or regulation promulgated pursuant\nthrough 1978 showing the progress made un-\nto make the statement not misleading.\nto the act in any U.S. district court or in\nder the plan and the reasons why, if any, the\nSection 1307 (e) -Empowers the Secretary\nthe U.S. District Court for the District of\ngoals set forth in the plan have not been\nto make an examination to determine\nColumbia. The Secretary is also authorized\nreached along with estimates of the need for\nwhether an order should be issued under\nto transmit evidence concerning prohibited\nthe following year. This title also requires a\nsubsection (d) and allows him to have access\nacts or practices to the Attorney General who\nfinal report to be submitted by January 15,\nto and demand production of any relative\nmay institute criminal proceedings.\n1979.\nMay 24, 1968\nCONGRESSIONAL RECORD-SENATE\nS6401\nTITLE XV-MISCELLANEOUS\nAdditional assistant Secretary for Housing\nto the same extent that such work could\nModel cities\nand Urban Development\nnow be done with project funds.\nSection 1507.-Amends the first sentence\nSection section 110(e)\nSection 1501.-Amends section 111(a) of\nof section 4(a) of the Department of Hous-\nof the Housing Act of 1949 to make it clear\nthe Demonstration Cities and Metropolitan\nDevelopment Act of 1966 to authorize an\ning and Urban Development Act to increase\nthat the restoration of historic properties\nappropriation of $1 billion for the model\nthe number of assistant secretaries for\ncan be carried out as an urban renewal proj-\nsuch department from five to six.\nect cost for those projects approved for three-\ncities program for fiscal year 1970. In addi-\nfourths Federal grant assistance on a limited\ntion, this section adds an authorization of\nInternational housing\nproject cost basis.\n$12 million for planning assistance and ad-\nSection 1508.-Rewrites section 604 of the\nSection (d).-Amends section 1101(c)\nministrative expenses for the demonstration\nHousing Act of 1957 to clarify authority of\n(3) of the National Housing Act to permit\ncities program to be made available for fiscal\nHUD to: (1) Exchange data on housing and\namortization of the mortgage term under the\nyear 1969.\nurban development with foreign countries;\nmedical group practice facilities program to\nUrban renewal demonstration grant program\n(2) employ private citizens to participate in\ncommence after completion of construction\nSection 1502.-Amends section 314(a) of\nintergovernmental and international meet-\nof the facility rather than at the time the\nthe Housing Act of 1954 to permit demon-\nings sponsored or attended by HUD; and\nmortgage is executed.\nstration grants to be made to nonprofit\n(3) accept funds and other donations from\nSection -Amends section 213(o)\norganizations for carrying on demonstration\ninternational organizations, foreign coun-\nof the National Housing Act to clarify the\nprojects and other activities for the preven-\ntries, and private foundations in connection\nauthority of the Secretary to invest all\ntion of slum and blight. (Existing law per-\nwith activities carried on under interna-\nmoneys, not currently needed for the opera-\nmits grants to public bodies only.) This sec-\ntional housing programs.\ntion of the cooperative management housing\ntion provides that such demonstration un-\nLow-rent public housing-corporate status\ninsurance fund, in Government bonds or\ndertakings by nonprofit organizations must\nSection 1509 (Technical).-Amends sec-\nobligations, or in the purchase on the open\nbe consistent with any plans of a local pub-\nmarket of debentures which are the obli-\ntions 3 and 17 of the United States Housing\nlic agency. This section also increases the\nAct of 1937 to repeal language which is now\ngation of the fund.\npercentage of the Federal grant from two-\nobsolete.\nSection section 810(e)\nthirds of project cost to 90-percent of project\nof the National Housing Act to permit an\ncost. This section further increases the\nEligibility for rent supplement payments\nindividual, who is approved by the Secre-\namount of capital grant funds available for\nSection 1510.-Extend eligibility to par-\ntary, to be a mortgagor under the FHA sec-\ndemonstration projects from $10 million to\nticipate in rent supplement program to two\ntion 810 housing program for military per-\n$20 million.\nprojects in New York City.\nsonnel or employees or personnel of NASA\nAuthorization for urban information and\nConsolidation of the low-rent public housing\nor AEC research or development installations.\ntechnical assistance services program\nin Washington, D.C.\nHome Owners' Loan Act of 1933\nSection 1503.-Amends section 906 of the\nSection 1511.-Allows the National Capital\nSection section 5(c) of\nDemonstration Cities and Metropolitan De-\nHousing Authority in Washington, D.C., to\nthe Home Owners' Loan Act of 1933 to au-\nvelopment Act of 1966 to authorize an appro-\nconsolidate, pursuant to section 15(6) of the\nthorize Federal savings and loan associations\npriation of $5 million for fiscal year 1969 and\nUnited States Housing Act of 1937, into its\nto invest in time deposits or certificates of\n$15 million for fiscal year 1970 to carry out\nannual contributions contract for its 8,423\ndeposit in banks insured by the FDIC under\nthe purposes of the \"Title IX Program\" un-\nunits of low-rent housing under title II of\nregulations issued by the Federal Home Loan\nder which matching grants are made to States\nthe District of Columbia Alley Dwelling Act,\nBank Board and also amends section 5(c)\nto help them provide urban information and\nthe operating income and operating expense\nto broaden the authority of a Federal savings\ntechnical assistance services to communities\naccounts for its 72 units of low-rent housing\nand loan association to invest up to 1 percent\nof less than 100,000 population.\nunder title I of such act.\nof its assets in loans guaranteed by the\nAdvances in technology in housing and urban\nUrban renewal project in Garden City, Mich.\nAgency for International Development to\ndevelopment\nhelp finance housing projects or home finan-\nSection 1512.-Makes local expenditures in\nSection 1504.-Amends section 1010(d) of\ncing institutions in developing nations out-\nconstruction of the Florence Primary School\nside of Latin America.\nthe Demonstration Cities and Metropolitan\nin Garden City, Mich., eligible as a local\nAct of 1966 to authorize the appropriation of\nSection section 5(c) of\ngrant-in-aid to the Cherry Hill urban renewal\nsuch money as may be necessary to continue\nthe Home Owners' Loan Act of 1933 to per-\nproject in Garden City, Mich.\nthe advances in technology in housing and\nmit a Federal savings and loan association to\nurban development programs authorized un-\nUrban renewal project in Sacramento, Calif.\nmake loans for the construction of new\nder section 1010. This section would also per-\nSection 1513.-Makes local expenditures in\nstructures related to residential use of the\nmit the letting of research contracts for pe-\nconnection with the construction of a storm\nproperty under the existing exception appli-\nriods of up to 4 years instead of the present\ndrainage stem eligible as a local grant-in-aid\ncable to property improvement loans.\nauthorized 2-year period.\nto the Capitol Mall Riverfront urban renewal\nSection 1517(c) .--Amends section 5(c) of\nproject in Sacramento, Calif.\nthe Home Owners' Loan Act of 1933 to au-\nCollege housing\nSection 1505.-Amends title IV of the\nSelf-help studies\nthorize a Federal savings and loan associa-\ntion to invest in loans to federally supervised\nHousing Act of 1950 by adding to the exist-\nSection 1514.-Amends section 207 of the\nfinancial institutions secured by investments\ning college housing 3-percent direct loan pro-\nHousing Act of 1961 to permit the Secretary\nin which the association has statutory au-\ngram a new program of annual grants to\nof HUD to include the study of self-help\nthority to invest directly.\ncover the difference between the average\nin construction, rehabilitation, and main-\ntenance of housing for low-income persons\nFederal Home Loan Bank Act\nannual debt service an educational institu-\ntion is required to pay on borrowings from\nand families in the low-income housing\nSection 1518.-Amends section 12 of the\nprivate sources and the average annual debt\ndemonstration program. Also directs Secre-\nFederal Home Loan Bank Act to authorize\nservice it would be required to pay under the\ntary of HUD to make a report to Congress\nFederal home loan banks, subject to regula-\n3-percent rate presently available under the\nwithin 1 year after date of enactment of this\ntions by the Federal Home Loan Bank Board,\ndirect-loan program. Annual grants with re-\nact, setting forth the results of the self-help\nto purchase AID-guaranteed housing loans\nspect to any project could be contracted to\nstudies and demonstrations carried out un-\nand to sell participations therein to any\nbe made for periods up to 40 years. The total\nder section 207 with such recommendations\nblank member.\namount of annual contracts contracted to\nas he deems appropriate.\nFederal Reserve Act\nbe made for this interest rate subsidy could\nEarthquake study\nSection 1519.-Amends section 24 of the\nnot exceed $10 million and this amount\nSection 1515.-Amends section 5 of the\nFederal Reserve Act to authorize construc-\nwould be increased by an additional $10\nSoutheast Hurricane Disaster Relief Act of\ntion loans up to 36 months in length as an\nmillion on July 1, 1969.\n1965 to extend the time the Secretary of\nexception to the limitation on real estate\nFederal-State training programs\nHUD is required to report his findings and\nloans. (Under existing law, such construc-\nSection 1506.-Amends sections 801, 802,\nrecommendations on earthquake insurance\ntion loans may not exceed 24 months.)\nand 805 of title VIII of the Housing Act of\nfrom October 31, 1968 to June 30, 1969.\nPRIVILEGE OF THE FLOOR\n1964 to expand the program to permit grants\nTechnical amendments\nMr. SPARKMAN. Mr. President, I ask\nto States for the training of subprofessional\nSection 1516(a) .-Amends section 110(c)\nunanimous consent that staff members\nas well as professional persons who will be\nof the Housing Act of 1949 to make it clear\nemployed by nonprofit organizations as well\nof the Committee on Banking and Cur-\nthat urban renewal project funds can be\nas public organizations in the field of hous-\nrency, including the Housing Subcom-\nused for \"the restoration of acquired prop-\ning and community development. This sec-\nperties of historical or architectural value.\"\nmittee thereof, be authorized to be on\ntion would also allow grant assistance to be\nthe floor during the consideration of the\nSection 1516(b).-Amends section 110(d)\nextended to Guam, American Samoa and the\nof the Housing Act of 1949 to make it clear\nbill.\nTrust Territory of the Pacific in order to\nthat grant-in-aid credit can be given for\nThe PRESIDING OFFICER. Without\nmeet the needs of these areas for training\nexpenditures by a public body for the con-\nobjection, it is so ordered.\ncapable housing and community develop-\nstruction of foundations and platforms on\nMr. SPARKMAN. Mr. President, on\nment technical and professional personnel.\nair rights sites in urban renewal projects\nyesterday afternoon, the distinguished\nS 6402\nCONGRESSIONAL RECORD - SENATE\nMay 24, 1968\nsenior from Maine [Mrs. SMITH] asked\nthority to give assistance for training\nguished Senator has fully answered the\na question and asked that it be answered\nand other types of services and counsel-\nquestion. I am happy to respond to the\nin the course of the debate. I should like\ning that would help lower income fami-\nrequest of Senator SMITH. I was particu-\nto answer the question of the Senator\nlies be more responsible homeowners.\nlarly pleased to have her cosponsor the\nfrom Maine at this time. And if I omit\nAs the Senator from Maine knows,\nNational Home Ownership Foundation\nanything, I should like the Senator from\nseveral other bills, in addition to S. 1592,\nAct inasmuch as she is my senior col-\nIllinois [Mr. PERCY] to feel free to prompt\nwere introduced during the first session\nleague on the Aeronautical and Space\nme.\nof the 90th Congress to provide assist-\nCommittee as well as chairman of the\nMr. President, the senior Senator from\nance toward helping lower income fami-\nRepublican conference. Her support of\nMaine [Mrs. SMITH] asked in the CON-\nlies become homeowners. The bills, like\nthe principles enbodied in S. 1592 has\nGRESSIONAL RECORD of yesterday, at page\nS. 1592, contained a variety of ways in\nmeant a great deal to me.\nS6293, that I list the portions in the com-\nwhich such housing would be financed.\nThe spirit of the committee has been\nmittee bill, S. 3497, which were adopted\nThe committee considered all of these\nto embrace the principles of S. 1592. In\nfrom S. 1592, a bill introduced by the\nmatters and developed a committee bill\nonly one point did we actually fail to\nSenator from Illinois [Mr. PERCY], of\nwhich encompasses the best ideas for\nachieve one important objective of the\nwhich the Senator from Maine was a co-\nhomeownership from all the bills sub-\noriginal bill, and this was in the ability\nsponsor, as well as list those portions of\nmitted. The committee bill uses the es-\nof the National Home Ownership Foun-\nS. 1592 which were not included in the\ntablished FHA mortgage insurance pro-\ndation to issue debentures that would be\ncommittee bill.\ngrams to proniote homeownership\nguaranteed by the Federal Government.\nMr. President, I will ask the Senator\nrather than giving a nonprofit private\nMr. SPARKMAN. The Senator is cor-\nfrom Illinois to check me on my state-\nfoundation Federal guarantee backup\nrect. The Senator knows that there was\nment if I am incorrect. I said that Mrs.\nfor obtaining funds with which to pro-\nconsiderable question about it in the\nSMITH was a cosponsor of the measure.\nmote housing as was proposed in S. 1592.\ncommittee as a whole and downtown-\nI believe that every Member on the Re-\nThat is, we did not authorize the is-\nthe idea of the Treasury guaranteeing\npublican side was a cosponsor, and\nsuance of debentures guaranteed by the\nbonds issued by a private corporation.\nthere were three Democrats in addi-\nUnited States, backed up by the Treas-\nYet, we said that the program we worked\ntion to that. Furthermore, the bill was\nury.\nout would give us a chance to try it out,\nintroduced by 112 Members of the\nIn considering S. 1592, the committee\nand then we could chart the course in\nHouse of Representatives. So it had\nwas mainly concerned about giving a\nthe future.\nvery broad representation. Much of\ncompletely private nonprofit foundation\nMr. PERCY. May I say at that point\nS. 1592 is in the committee bill, S. 3497.\na $2 billion bonding authority where the\nthat no Senator, particularly a freshman\nSome Senators on the minority side of\nFederal Government would have very\nSenator from the minority party, could\nthe aisle have spoken to me about the\nlittle jurisdiction and supervision over\nhave been given more time and attention\ncommittee bill, and I said, \"Oh, sure,\nany of the activities of the Foundation.\non this particular point.\nyou certainly ought to support it, be-\nThe committee, did, however, accept the\nI recall one afternoon last year in a\ncause you are one of the cosponsors.\"\nidea of creating a National Home Owner-\nCapitol conference room, when we felt\nAnd that is just about what it amounts\nship Foundation with certain functions\nthat the whole process of government\nto.\nfor the purpose of providing technical\nwould slow up because we had SO many\nDoes the Senator from Illinois wish to\nassistance and encouraging local non-\npeople from downtown tied up-from\nbe recognized?\nprofit groups to sponsor housing pro-\nHUD, the Federal Reserve, the Treasury,\nMr. PERCY. Mr. President, I should\ngrams for lower income families. The\nand other agencies-to try to work out\nlike to comment that not only was the\ncommittee bill authorizes an appropria-\nthis principle.\nSenator from New York [Mr. JAVITS]\ntion of $10 million for the Foundation to\nThe committee itself has directed that\nexceedingly gracious in working very\ncarry on its activities.\n6 months after the enactment of this bill,\nclosely with me on this bill, but also I\nSince S. 1592 and the several other\nwe take another look to see whether suf-\nbelieve it very important that the Sen-\nproposals before the committee were\nficient money is flowing into the de-\nator from Washington [Mr. MAGNUSON]\naimed toward providing homeownership\npressed rural and slum areas of our\nbe recognized. He was an original co-\nfor lower income families, it would be\ncities. If we find that mortgage credit is\nsponsor, and, of course, is chairman of\nvery difficult to list all of those portions\nnot sufficient to do the job then the com-\nthe Independent Offices Subcommittee\nwhich were included, or not included,\nmittee will come back to take another\nof the Senate Appropriations Commit-\nfrom S. 1592 and the other bills in the\nlook, to see how greater capital can be\ntee.\ncommittee bill.\ncreated.\nMr. SPARKMAN. The Senator is cor-\nSince S. 1592 was introduced by Sen-\nrect. I did not name the Democratic\nator PERCY, who is a member of the\nBut in the meanwhile, I was very\nSenators, but I do know that there were\nBanking and Currency Committee and\npleased that the principle of partnership\nthree Democrats. I do recall that Sena-\nwho supports the committee bill, I invite\nand government reinforcement was in-\ncluded in the administration request this\ntor MAGNUSON was one.\nhim to elaborate on these remarks, if he\nwishes, for the benefit of the Senator\nyear.\nAs the Senator from Maine knows, S.\nfrom Maine.\nMr. SPARKMAN. The Senator is cor-\n1592 proposes the creation of a National\nPersonally, I feel that a very refresh-\nrect. S. 2700 did not contain that provi-\nHome Ownership Foundation which\ning idea was brought to the committee\nsion, but the new bill does.\nwould have the authority to issue $2 bil-\nMr. PERCY. At some point in the fu-\nlion worth of federally guaranteed de-\nby the proposal of the Senator from Illi-\nbentures. The funds raised by the issu-\nnois, as embodied in S. 1592. Much of\nture, the need may be SO great and the\nance of these debentures would be\nthe essence of it was first contained in S.\nimpact on the budget so great that if\nloaned to local \"eligible borrowers\"-\n2700, which the committee reported last\nwe move ahead with the type of job that\nyear, and now is contained probably to\nmust be done we may come back-after\nthat is, nonprofit corporations and orga-\nnizations. In turn, these local organiza-\na greater extent-certainly, the interest\nwe have had experience with the bill\ntions would construct or rehabilitate\nsubsidy is more in line with what he ad-\nand the National Home Ownership Foun-\nhousing units and sell them to families\nvocated-in the present bill.\ndation-and give this bonding power to\nAgain, I am glad to pay tribute to the\nthe National Home Ownership Founda-\nneeding housing. When appropriate, an\ndistinguished Senator and to all those\ntion SO that it can issue debentures back-\ninterest rate subsidy would be given to\nthe purchaser.\nwho joined in sponsoring that bill. It is\ned up by the Federal Government.\nFunds necessary to provide debt serv-\nlargely included in the present bill.\nI believe we have proceeded in a cau-\nice for the debentures when not paid\nMr. PERCY. Mr. President, will the\ntious, prudent manner, and I am fully\nback to the National Home Ownership\nSenator yield?\nsatisfied that every consideration has\nbeen given to S. 1592. I believe we could\nFoundation by the homeowner receiving\nMr. SPARKMAN. I yield.\nhave moved ahead faster by giving bond-\nthe loan and subsidy would be made up\nMr. PERCY. I will be very happy to\ning authority to the Foundation now,\nby direct appropriations from the U.S.\nstudy carefully the distinguished Sen-\nbut I am willing to wait and see whether\nTreasury.\nator's statement.\nor not we have fulfilled the need in the\nS. 1592 also proposed that the Foun-\nIn quick analysis, from what I have\ncommittee bill and to reassess the situa-\ndation would be given very broad au-\nheard, it seems to me that the distin-\ntion in the future.\nHousing\nMay 24, 1968\nCONGRESSIONAL RECORD - SENATE\nS 6403\nMr. SPARKMAN. I thank the Senator.\nEXCERPTS FROM REMARKS OF SENATOR FUL-\nmittee on Housing, April 15, 1960, read in\nI appreciate the patience of the Sena-\nBRIGHT TO THE SENATE, AUGUST 11, 1966\npart, as follows:\ntor from New York in waiting for us to\nMr. FULBRIGHT. Mr. President, I congratu-\n\"The subcommittee recommends\nan\nconclude these remarks.\nlate the Senator from Alabama and his col-\namendment of existing law to require the fol-\nMr. JAVITS. Mr. President, first I\nleagues on the Banking and Currency Com-\nlowing annual report from the President:\nshould like to state to the Senator from\nmittee for their continuing attention to the\nAt the beginning of each session of the Con-\nhousing needs of the Nation. For several years\ngress, the President shall transmit to the\nAlabama that it is I who am indebted to\nduring my chairmanship of the Banking and\nSenate and the House of Representatives a\nhim. I missed the time allocated to me\nCurrency Committee, it was my privilege to\nreport stating, among other things, (1) the\nbecause of a plane difficulty, and hence,\nserve under the capable leadership of the\nminimum number of housing units which\nquite properly, was called on to await my\nSenator in his capacity as chairman of the\nshould be started during the calendar year,\nturn. He has been very gracious, and SO\nHousing Subcommittee-a position which he\nor 2 calendar years following submission of\nhave Senator PERCY and Senator TOWER\nstill holds.\nthe report, in order to be consistent with the\nThrough these years and through many\nprogram of the President, (2) the manner in\nfor allowing me to proceed.\nprior years, the committee was periodically\nwhich discretion contained in law will be\nfaced with crises in the homebuilding indus-\nused by Federal agencies to achieve this\nECONOMIC POLICIES WHICH AF-\ntry, because our economy was allocating an\nminimum number of starts, and (3) recom-\ninadequate quantity of savings to home\nmendations for changes in law which may be\nFECT THE HOMEBUILDING IN-\nmortgage credit. Time after time, the com-\nrequired to enable the achievement of this\nDUSTRY\nmittee recommended and the Senate passed\nminimum number of starts.\"\nbills designed to relieve critical shortages of\nThis reconmendation was subsequently\nMr. FULBRIGHT. Mr. President, I am\npleased to note that title XIV of S. 3497\nmortgage money. Today we are in the midst\nexpressed in bill form-S. 3379 of 1960-and,\nof another such crisis.\nin modified form was included in the\nrequires the President to submit to Con-\nI intend to support the committee recom-\nomnibus housing bill of 1960-S. 3670, Senate\ngress annual reports upon progress in\nmendations, and I urge other Senators to do\nReport No. 1575. During debate on S. 3670, on\nachieving our national goal of \"a decent\nlikewise. I believe that the time has come,\nJune 16, 1960, the provision to require an\nhome and a suitable living environment\nhowever, to treat the cause of this recurring\nannual housing goal was deleted from the bill\nfor every American family.\" This has\nailment rather than to continue ministering\nby a vote of 44 to 37. It is interesting to note,\nbeen our goal since the enactment of\ndoses of aspirin and antihistamines, which\nMr. President, that the proposal for an an-\nthe Housing Act of 1949.\nmerely relieve the unpleasant symptoms.\nnual housing goal was supported by the late\nMr. President, the drastic curtailment of\nPresident Kennedy, by President Johnson,\nThe requirements of title XIV are quite\nhomebuilding-described in the committee\nand by Vice President HUMPHREY. In fact, a\nsimilar to a bill which I introduced on\nreport-is a result of national fiscal and\ntotal of 50 Senators voted for or were an-\nAugust 11, 1966. The purpose of my bill-\nmonetary policies. But the effects of these\nnounced in favor of the proposal, and only\nS. 3714, 89th Congress, second session-\npolicies on homebuilding are never publicly\n47 Senators voted or were announced in\nwas to require public debate of economic\ndebated until they have been implemented\nopposition.\npolicies which affect the homebuilding\nand their damaging effects have begun to\nMr. President, I submit that if section 101\nindustry.\nreverberate throughout the economy. We\nof S. 3670 had been enacted into law in 1960,\ncan no longer afford the waste and sacrifice\nwe would not today be debating emergency\nI support title XIV wholeheartedly,\ninevitable in a cycle of boom and bust in\nmeasures to relieve a critical depression in\nand I hope that it may result in a na-\nhomebuilding. Roller coasters are for amuse-\nhomebuilding. If section 101 had been en-\ntional effort to achieve stability and ex-\nment parks and should not be characteristic\nacted, the Congress would have deliberated\npansion in the production of housing by\nof an economic system capable of relative\nthe economic plans of the President in 1961,\nthe thousands of private businessmen\nstability.\n1962, 1963, 1964, 1965, and 1966 as they spe-\nengaged in homebuilding.\nEven a cursory review of the effects of fis-\ncifically related to the supply of home mort-\nMr. President, I ask unanimous con-\ncal and monetary policies over the last 20\ngage credit, and there would have been ap-\nsent to have printed in the RECORD: First,\nyears will reveal the circumstances under\npropriate action to maintain stability in this\nwhich home mortgage credit will be plentiful\nvital economic commodity.\nthe text of my bill, S. 3714; second, ex-\nor will be scarce. Decisions made by the\nSo far as I know, the need for better plan-\ncerpts from my remarks in the Senate\nFederal Reserve Board, by the Treasury De-\nning has not attracted attention since 1960.\non August 11, 1966; third, a letter which\npartment, by the Bureau of the Budget, by\nThis is because 1966 is the first crisis year\nI wrote to the President of the National\nthe Department of Housing and Urban De-\nsince that time-but it will not be the last\nAssociation of Home Builders on Octo-\nvelopment, and by the Federal Home Loan\nsuch crisis, if we continue to let homebuild-\nber 19, 1966; fourth, an excerpt from the\nBank Board, turn the volume of homebuild-\ning be the primary deflator of an overheated\nNAHB statement of policy for 1967; and,\ning up or down like water from a faucet.\neconomy.\nBut these policies are never discussed or\nfifth, an excerpt from pages 119 and 120\nMr. President, it has been our practice to\ndebated in specific terms until the home-\nrely upon economic policies which periodi-\nof the report (No. 1123) of the Senate\nbuilding industry is drowning in a sea of\ncally victimize the homebuilding industry. I\nCommittee on Banking and Currency on\ntight money and going down for the third\npropose that we devise economic policies\nS. 3497.\ntime. The present crisis has been foreseeable\nwhich promise greater stability in allocating\nThere being no objection, the items\nfor many months. Each time that the dis-\npublic and private savings to satisfy the\nwere ordered to be printed in the REC-\ncount rate is raised, each time that com-\ngrowing shelter needs of the Nation.\nORD, as follows:\npetition for savings causes a rise in yields of-\nI considered offering an amendment to the\nS. 3714\nfered to investors, each time that rates to\npending bill, but have decided instead to in-\nborrowers are raised, the ultimate effect upon\nBe it enacted by the Senate and House of\ntroduce a separate bill which may be studied\nthe supply and price of home mortgage cred-\nRepresentatives of the United States of\nprior to the next session of Congress. If\nit becomes clearer and more certain. But\nAmerica in Congress assembled, That the\nthere is no evidence of improvement in our\nthis effect of monetary and fiscal policies is\nprogram of the President as expressed in his\nnational economic planning in the Economic\nnever discussed specifically in terms of the\nannual message to the Congress shall include\nReport of the President next January, the\nhomebuilding industry.\nstatements and recommendations concerning\nCongress should give prompt attention to the\nThis unhealthy state of affairs was re-\na residential construction goal. In further-\nenactment of appropriate legislation.\ncognized by the Committee on Banking and\nance of the realization of this goal the Presi-\ndent shall transmit to the Senate and the\nCurrency in 1960. In that year the commit-\nOCTOBER 19, 1966.\ntee concluded a 2-year study of home mort-\nHouse of Representatives, after the beginning\nMr. LARRY BLACKMON,\ngage credit needs anticipated for the present\nof each session of the Congress, but not later\nPresident, National Association of Home\ndecade. The first recommendation made by\nthan January 20, a report which shall include\nBuilders, Washington, D.C.\nthe following: (1) a statement indicating the\nthe committee was addressed to the problem\nDEAR MR. BLACKMON: Thank you for your\nI am discussing. The committee recognized\nminimum number of housing units which\nletter of October 13 and for your kind re-\nshould be started during the then current\nthat fluctuations in home building do not\noccur by accident.\nmarks concerning my support of housing\ncalendar year, or such year and the next fol-\nlegislation. I agree with you that action\nlowing calendar year, in order to be consist-\nThe committee realized that these fluctua-\nshould be taken to relieve the alarming re-\nent with the program of the President, (2) an\ntions are foreseeable and are a result of\nduction in residential construction, but I am\nindication of the manner in which the law\nplanned monetary and fiscal policies. To\nnot very hopeful about the prospect for\nwill be administered by the executive agen-\noversimplify, these policies require home\nmeaningful action in the near future.\ncies to achieve the number of housing units\nbuilding to quickly take up the slack when\nIt seems clear to me that decisions made\nspecified under clause (1), and (3) any rec-\nthe economy is sagging, and to take it in\nby the Treasury, the Bureau of the Budget,\nommendations for legislative action that the\nthe neck when the economy is booming.\nand the Federal Reserve Board, throughout\nPresident determines are necessary or desira-\nMr. President, we can plan better than we\n1966, have been made with knowledge that\nble in order that the construction of such\nhave been doing, and the time has come for\na reduced volume of homebuilding would\nspecified number of housing units may be\nthe Congress to insist upon better planning.\nbe an inevitable result. In other words, ef-\nstarted.\nRecommendations No. 1 of the Subcom-\nforts to defiate an overheated economy have\nS 6404\nCONGRESSIONAL RECORD - SENATE\nMay 24, 1968\naffected homebuilding in greater proportion\nThis statement and finding by Congress\nit stand in adjournment until 12 noon\nthan other segments of the economy, and\nwould be in furtherance of the policy de-\non Monday next.\nthis consequence was foreseeable.\nclared in 1949 and would bring it more into\nThe PRESIDING OFFICER. Without\nUnfortunately, these decisions were made\ncurrent focus by stressing the need for hous-\nwithout any public debate of their effect\ning goals in the immediate future as well as\nobjection, it is so ordered.\nupon homebuilding, and without any public\nfor a plan by which they may be brought to\ndiscussion of alternative deflationary ac-\npublic realization. Such a legislative pro-\ntions. The tremendous cost of the war in\nnouncement would also be in line with the\nTHE VIETNAMESE PEACE NEGOTI-\nVietnam-now engaging U.S. forces in a\nrecent proposal by the President to construct\nATIONS\ndimension exceeded in our history only by\n6 million federally assisted housing units for\nMr. JAVITS. Mr. President, I speak to-\nWW I and WW II-demands reduced eco-\nlow and moderate income families over the\nnomic activity in non-war related pursuits.\nnext 10 years.\nday because I feel a conscientious duty\nOtherwise, the value of the dollar would\ntoward our two Ambassadors in Paris,\nReport outlining plan\nerode at a faster rate than we are now ex-\nAmbassadors Harriman and Vance, with\nperiencing.\nSection 1402 of the bill would require the\nPerhaps it would have been wiser to have\nPresident to make a report to Congress on\nwhom I talked at some length in Paris\nor before January 15, 1969, setting forth a\nTuesday night. I promised them I would\nimposed general wage and price controls, or\n10-year plan covering the period June 30,\nmake some observations in the Senate\nrestricted auto production, or deferred high-\n1968, to June 30, 1978. This plan would con-\nbased on our talks.\nway construction, the space program, and\npublic works projects, or to have chosen a\ntain the number of units anticipated in both\nI have just returned from presiding\ncombination of these and other alterna-\nthe Government-assisted and the conven-\nover a meeting of the Political Commit-\ntives. The fact of the matter is, however,\ntional markets for each of the 10 years, to-\ntee of the North Atlantic Assembly in\nthat none of these alternatives were chosen,\ngether with a statement of what reduction\nand homebuilding is bearing a greater bur-\nin substandard units is expected, an estimate\nBrussels, and from conferring in Paris\nof costs in the various Federal programs for\nwith Ambassadors Harriman and Vance\nden as a result.\nI suggest, therfore, that it would be more\nlegislative action. The report would also in-\nabout Vietnam negotiations. Also, I had\nprudent, and certainly more democratic, to\nclude an estimate of residential mortgage\nthe great privilege of an audience with\ndiscus and debate national economic policies\nmarket needs, including availability and flow\nHis Holiness Pope Paul who has been\nprior to their adoption and implementation.\nof mortgage funds, for the coming year, and\nsuch a respected and persuasive advocate\nIt is for this reason that I introduced S.\nsuch other data and recommendations as are\nof peace in Vietnam.\n3714, about which we corresponded several\ndeemed pertinent.\nThere are certain observations and\nmonths ago.\nPeriodic reports\nrecommendations on Vietnam which\nBased upon present estimates of the course\nSection 1403 of the bill would require an-\nthese experiences have induced me to\nof the war in Vietnam, its demand upon our\nnual reports by the President on January 15\neconomy will not diminish in 1967. Con-\nmake, and I hope they will be of use to\nof each year, which reports would compare\nsequently, some hard decisions must be\nthe results for the previous year with the\nmy colleagues and to our Nation.\nmade with respect to continuing efforts to\ngoals set forth in the plan for that year.\nI found a somewhat more sympathetic\nmaintain national economic stability next\nThese annual reports would be required to\nattitude in Europe regarding the Viet-\nyear.\ngive reasons for not meeting objectives, if\nnam war. While we were being roundly\nIf the annual Economic Report to the\nthat be the case, and would also set forth\ncondemned before by many, European\nCongress were to address itself specifically\nany revised objectives as would be necessary,\nto prospects for homebuilding as estimated\ncriticism is being muted. However, I see\ntogether with an estimate of the availability\nto be affected by Federal fiscal and monetary\nand flow of mortgage funds. The annual re-\nno real prospect of material support for\npolicies, it is possible that courses of action\nports would also provide an analysis of the\nour efforts in the war.\nmight be chosen which would lessen the\nmonetary and fiscal policies for the coming\nThere is, however, relief and a sense of\nburden upon your industry. If not, oppor-\ncalendar year required to carry out the ob-\nconfidence in Europe that a beginning\ntunity would have been afforded to face the\njectives of the plan, and could contain such\nhas been made to attain the peace. In\nissue squarely prior to adoption and imple-\nfurther legislative recommendations as\nshort, there is an attitude of sympathy\nmentation of policies predictably depressing\ndeemed appropriate by the President.\nto homebuilding.\nin Europe as we carry on the negotia-\nFinal report\nIf you are reluctant to support S. 3714 in\ntions.\nits present form, I would be pleased to re-\nSection 1404 of the bill would provide for a\nAs to the negotiations themselves, our\nceive your recommendations for modifica-\nfinal report by the President on January 15,\nnegotiators are Ambassadors of the\ntion.\n1979 showing in detail the success or fail-\nhighest character and proven skill. They\nWith best wishes, I am,\nure of the plan and an analysis of the rea-\nsons therefor.\nare, of course, bound by their brief from\nSincerely yours,\nJ. W. FULBRIGHT.\nThe committee believes that there should\nWashington and their efforts are sub-\nbe unification toward national housing ob-\nject to what is happening in the war it-\n[Excerpt from NAHB statement of policy\njectives among the several departments and\nself so long as it continues. It is about\nfor 1967]\nagencies of the Federal Government. While\nthis especially that I wish to speak.\nthe Department of Housing and Urban De-\nIV. NATIONAL HOUSING GOALS\nFor, we must have a clear idea of\nvelopment is primarily involved in this sub-\nwhat we want to attain to be able to\nThe events of the past year emphasize the\nject, both the Department of Agriculture and\nneed for a statement of specific National\nthe Veterans' Administration have direct con-\nattain it. Also, we must be prepared to\nHousing Goals to minimize the danger of\ntact with the public regarding it. The opera-\nhear the other side uttering the abrasive\nconstant change in the direction of housing\ntions of the Federal Reserve Board respecting\nwords so typical of the Communists. All\nwithout the kind of orderly national debate\nthe flow of credit and the volume of borrow-\nthe while, the threat of a walkout hangs\nwhich should precede any major shift in\nings permitted through the Federal Home\nover the heads of all, as well as the use\nimportant public policy.\nLoan Bank Board, as well as the marketing\nof the talks for propaganda purposes.\nNAHB will take the lead to establish such\nand purchasing prices and policies of the\nThis is standard operating procedure for\ngoals and to obtain recognition of them by\nFederal National Mortgage Association should\nall appropriate Federal, state, and local gov-\nnot be determined or conducted without a\nthe Communists. Therefore, we must\nview toward achieving some minimum vol-\nhave a basic concept from which we can-\nernments. We will seek the cooperation of all\ngroups in home building and residential fi-\nume of housing production consistent with\nnot depart even though there is always\nnance and all others concerned with hous-\nthe need for both housing and general eco-\nthe risk that negotiations may break\ning opportunity for all.\nnomic stability.\noff for a time as a result. At the same\nIt is the view of the committee that the\ntime, this concept must be of such a\n[Excerpt from S. Rept. 1123 on S. 3497]\nstating in definite terms of annual minimum\nbasic nature that we are prepared to\nTITLE XIV-10-YEAR HOUSING PROGRAM\nhousing goals with this added requirement\nface a \"moment of truth\" with the Gov-\nof giving specific reasons in case they are\nDeclaration of purpose\nnot met, can do much toward achievement\nernment of South Vietnam when we may\nSection 1401 of the bill declares that the\nof the volume and stability of housing pro-\nfeel that we are willing to make peace on\nnational commitment made in the Housing\nduction that is so essential to the orderly\na set of agreed negotiated terms and\nAct of 1949 to the goal of \"a decent home and\ngrowth of the country.\nthey may not. That may happen.\na suitable living environment for every Amer-\nWhat we seek, as I understand it, is to\nican family\" can best be attained through a\ndefinite plan providing for the effective uti-\nORDER FOR ADJOURNMENT\nend the war by transferring the struggle\nlization of available resources and capabili-\nto the political forum. Also, that we in-\nties existing in both the public and private\nMr. BYRD of West Virginia. Mr. Presi-\ntend that the political resolution be on\nsectors of the economy over a fixed period\ndent, I ask unanimous consent that when\na one-man, one-vote basis. In other\nof 10 years.\nthe Senate completes its business today,\nwords, the political forum must be gen-\n5856\nCONGRESSIONAL RECORD - HOUSE\nJuly 1, 1968\nMr. ROGERS of Colorado. Mr. Speak-\ngress will toss this $3.5 billion subsidy\nI do believe, however, that the bill con-\ner, Secretary of Interior Stewart Udall\nbill in the \"legislative wastebasket.\"\ntains a great deal that is good and use-\nwas recently scheduled to speak at the\nA month ago, the Rules Committee\nful, and that it has benefited greatly\nJune commencement of my alma mater,\nfailed to report the legislation to the\nfrom the ideas of the minority. There is\nthe University of Denver. Senator Ken-\nfloor of the House, but on June 18 it was\na new emphasis on homeownership for\nnedy's tragic death prevented Mr. Udall\nreported for consideration on the floor of\nlower-income families, improvement in\nfrom going to Denver. He sent, by wire,\nthe House. Evidently the sponsors are\nthe rent certificate or leased public hous-\nthe following eloquent remarks, which\nplanning on passing this bill in the clos-\ning program, a tightening of provisions\nChancellor Maurice B. Mitchell read to\ning days of the session when, by reason of\nrequiring residential urban renewal to\nthe graduates.\nabsentees and confusion in the final\nserve the housing needs of low- and\nI include these inspiring words in the\nhours they might succeed in passing the\nmoderate-income Americans, increased\nRECORD, as I think they have value for\nsame and extending the farm subsidy\nauthorizations for the water and sewer\nus all during these difficult times:\nthrough 1970. Every Member should be\nprogram which is of benefit to every con-\nMESSAGE FROM STEWART UDALL\non the alert against this contingency.\ngressional district in the country, and\n(Read by Chancellor Maurice B. Mitchell of\nI am herewith enclosing with my re-\nrenewed efforts at establishing an effec-\nUniversity of Denver at Commencement on\nmarks a letter received from Mr. Charles\ntive flood insurance program. All of these\nJune 7, 1968)\nB. Shuman, president of the American\nprovisions reflect original efforts on the\nIf ever there was a time I would like to\nFarm Bureau Federation. The same\nparty of the minority, as does the rec-\nbe with young people, it is now. If ever there\nspeaks for itself.\nognition by the committee of the need to\nwas a moment when youth-in a world it did\nAMERICAN FARMER BUREAU FEDERATION,\ncut through the redtape and bureau-\nnot make-requires an encouragement of its\nWashington, D.C., June 25, 1968.\nenergies and talents and capacities to remake\ncratic delays that so often accompany\nHon. RAY J. MADDEN,\nthe world, it is now. If ever there was a time\nattempts to utilize existing programs.\nU.S. House of Representatives,\nwhen tragedy must yield to hope and rea-\nTo describe some of these efforts, I\nWashington, D.C.\nson, instead of despair and frustration, it\nDEAR CONGRESSMAN MADDEN: The House of\nwould like to include at this point my\nis now.\nI can not be with you because Robert F.\nRepresentatives will soon consider H.R. 17126,\nsupplemental views to the committee re-\nKennedy was a man I loved and whose pro-\na bill to extend the Food and Agriculture Act\nport. I would also urge every Member of\nfessional and personal life I shared. I had\nof 1965 for one year-to December 31, 1970.\nthis body to carefully study the majority\nto be with his family.\nPassage of this bill would be unnecessary\nand minority views in House Report No.\nand unwise.\nOne searches for words on an occasion\n1585. The bill, H.R. 17989, as well as the\nwhen rhetoric itself is totally inadequate.\nIt is unnecessary to act in 1968. The pres-\nreport, is of considerable size. It repre-\nThe opening words of Dickens' A Tale of Two\nent legislation does not expire until Decem-\nsents a major undertaking and, despite\nCities have more appropriateness and poig-\nber 31, 1969. Rejection of this bill would per-\nnancy than any I could frame: \"It was the\nmit Congress to develop an alternative pro-\nits length and complexity, should have\nbest of times, it was the worst of time, it was\ngram next year.\nthe fullest consideration that can be\nthe age of wisdom, it was the age of foolish-\nIt is unwise to act because the Act of 1965\nachieved in an informed debate.\nness, it was the epoch of belief, it was the\nis a failure. It has failed:\nMy supplemental views follow:\nepoch of incredulity, it was the season of\nTo stabilize the food costs of consumers.\nSUPPLEMENTAL VIEWS OF REPRESENTATIVE\nLight, it was the season of Darkness, it was\nTo expand farmers' export and domestic\nWILLIAM B. WIDNALL TO BANKING AND\nmarkets.\nthe spring of Hope, it was the winter of\nCURRENCY COMMITTEE REPORT ON HOUSING\nDespair; we had everything before us, we\nTo improve-or even maintain-the in-\nACT OF 1968\nhad nothing before us, we were all going di-\ncomes of farm families.\nIn supporting H.R. 17989, I am not unmind-\nrect to Heaven, we were all going direct the\nThe farm parity ratio stood at 81 when the\nother way.\"\nAct of 1965 became effective. Now when we\nful of the fact that reasonable men may differ\nBut these words-as any words-can only\nare less than half-way through the third year\nover certain provisions, or that new programs\nframe a question. The answer which must be\nof the program, it stands at 73. Farmers want\nauthorized or old ones extended by the meas-\nsomething better than to be locked into the\nure are open to constructive criticism relat-\nthe ultimate victory of reason over madness\nis for you-and all youth-to provide. This is\npresent low-price situation. And, while farm-\ning to conception and execution. On balance,\nincreasingly your world-both by the\ners have suffered a drop in their prices, the\nhowever, I believe the bill is both necessary\nstrength of your numbers and the power of\nfederal government's costs for wheat, feed\nand worthwhile. It has benefited from ideas\ngrain, and cotton programs have steadily in-\nand proposals offered by the minority, and I\nyour concern and commtiment.\ncreased and now total over $3 billion annu-\nthink it is appropriate to call particular at-\nThere is an end to a man's life; there need\nto be no end to the things he stood for and\nally.\ntention to this fact.\naspired for all men, everywhere. Those\nWith Congress having passed a 10-percent\nForemost among these minority sugges-\nthings-to which John F. Kennedy and Mar-\ntax increase and a requirement that the\ntions has been the concept of fostering on a\ntin Luther King and Robert F. Kennedy dedi-\nPresident reduce budgeted expenditures $6\nmajor scale homeownership among low- and\ncated their careers, and for which they gave\nbillion in the next fiscal year, it is incredible\nmoderate-income citizens. Homeownership\ntheir lives, are in your hands. The power to\nthat Congress would even consider extend-\nas a desirable goal is an idea deeply rooted\ning legislation which has proved to be so\nin American tradition. For the low- and mod-\ncreate is greater than the power to destroy.\nIndeed, that power is in your hands-and\ncostly and ineffective.\nerate-income citizen, particularly the minor-\nhearts.\nWe respectfully urge you to vote against\nity group citizen, this has become increas-\nH.R. 17126.\ningly the impossible dream. Statistics show\nSincerely yours,\nthat the percentage of existing one-family\nFARM SUBSIDY RAID ON U.S.\nCHARLES B. SHUMAN,\nhomes insured by FHA for families with in-\nTAXPAYER\ncomes less than $4,000 fell from 42.8 percent\nPresident.\nof the total in 1950 to 1.3 percent in 1966.\n(Mr. MADDEN asked and was given\nFor new homes, the drop was from 56 percent\npermission to address the House for 1\nto 1 percent in the same period.\nminute, to revise and extend his remarks,\nTHE OMNIBUS HOUSING BILL CON-\nIn order to reverse this trend, I introduced\nand to include extraneous matter.)\nTAINS MANY PROPOSALS SPON-\nH.R. 8820, the National Home Ownership\nMr. MADDEN. Mr. Speaker, the Agri-\nSORED BY THE MINORITY\nFoundation Act on April 20, 1967. One hun-\nculture Committee of the House of\ndred thirteen other House Members, includ-\n(Mr. WIDNALL asked and was given\ning eight members of the minority of the\nRepresentatives presented H.R. 17126, a\npermission to address the House for 1\nBanking and Currency Committee, joined in\nbill to extend the Food and Agriculture\nminute, to revise and extend his remarks,\noffering a similar bill at that time.\nAct of 1965 for 1 year.\nand to include extraneous matter.)\nThe proposal had as its basic goals the\nAlthough the pending bill has a year\nMr. WIDNALL. Mr. Speaker, the\nenlargement of housing opportunities and\nand a half before it expires on December\nHousing and Urban Development Act of\nchoice for our lower income families, both\n31, 1969, the recipients of annual sub-\nrural and urban. We proposed to tap private\n1968 has been voted out of the House\ncaiptal, private management and technical\nsidies to thousands of farmers and farm\nBanking and Currency Committee and\nexperience, and private, community-oriented\ncorporations all over the Nation are\ngranted a rule for floor action in the near\ninitiative. The Government role was to be\npressuring the Congress for another year\nfuture. As I stated in my supplemental\nlimited to one of stimulus and reinforce-\ncontinuance of this \"boondoggle,\" SO that\nviews to the committee report, I am not\nment, rather than execution and control.\nit can carry through the year 1970.\nunaware that reasonable men may differ\nFEATURES OF THE NHOF BILL\nEvidently these recipients of a \"guar-\nover certain provisions, or that new or\nThe National Home Ownership Foundation\nanteed annual income\" from the Ameri-\nold programs deserve careful scrutiny\nAct proposal, besides its basic change in\ncan taxpayers are afraid the next Con-\nand constructive criticism.\npolicy advocating homeownership in contrast\nJuly 1, 1968\nCONGRESSIONAL RECORD - HOUSE\n5857\nto traditional federally assisted renter-\nwithin the American public appear to have\nThe Secretary is directed to report back\noriented projects, contained a number of\nchanged the administration's mind. The\nwithin 6 months on his actions. This provi-\ninnovative features. In summary they were\ncumulative result can be seen in H.R. 17989.\nsion was secured in the bill despite the ob-\nas follows:\nIn summary, the similarities between the\njections of the Department of Housing and\n1. The establishment of the National Home\ncommittee bill and the proposal outlined\nUrban Development, objections which, in\nOwnership Foundation, a congressionally au-\nabove are as follows:\nturn, persisted, despite the evidence that\nthorized nonprofit corporation, with a board\n1. The committee bill establishes, In title\nsuch a plan was necessary and capable\nof directors drawn from the private sector.\nI, section 107, a National Home Ownership\nof being established, and despite a favorable\nBesides making mortgage capital available,\nFoundation. Its purposes follow those sug-\nreport in the early 1960's, commissioned by\nthe Foundation was to conduct a technical\ngested for the technical assistance service\nthe Housing and Home Finance Agency, fore-\nassistance service to aid in the development\nunder the minority's NHOF bill of last year.\nrunner of HUD.\nand formation of low- and moderate-income\nThe Foundation is directed to encourage and\n6. The committee bill, in section 405,\nhomeownership program, including interim\nassist public and private bodies at the na-\namends the urban renewal law to permit\nplanning loans, and the conduct of support-\ntional, community, and neighborhood levels\nland to be sold to qualified low-income mort-\ning programs in such fields as training, em-\nin initiating, developing, and conducting\ngagors and nonprofit sponsors of homeown-\nployment, credit counseling, and budget\nprograms to expand low-income homeowner-\nership program and, by an amendment I of-\nmanagement to enable lower income families\nship and housing opportunities. This in-\nfered, private homebuilders acquiring land\nto assume the privileges and responsibilities\ncludes arrangements for technical and man-\nfor subsequent resale to low- and moderate-\nof homeownership.\nagerial assistance and training, aid in find-\nincome home buyers.\n2. Authority to the Foundation to raise\ning mortgage financing, insurance, and the\n7. By an amendment which I offered, sec-\n$2 billion in mortgage loan funds through the\nlike, encouraging research and innovation,\ntion 3 was added to H.R. 17989 which re-\nsale of its debentures, guaranteed by the\ncollecting and distributing information, and\nquires, to the greatest extent feasible, the\nFederal Government to supplement available\nassistance in expanding job opportunities.\nemployment of lower income residents from\nmoneys from existing mortgage lending in-\nThe Foundation may make loans or grants\nthe area served not only by homeownership\nstitutions. The object was to bring together\nto cover organizational or administrative ex-\nactivity but other federally assisted housing\nin one coordinated effort, and one pool of\npenses for homeownership programs, neces-\nprojects as well, in jobs created by these\nfunds, sufficient capital to carry out a major\nsary preconstruction costs including land op-\nprojects. The possibility of the home buyer\nlower income homeownership program. It was\ntions, architectural fees, and similar items,\ncontributing his own labor toward the cost\nexpected that the federally guaranteed bonds,\nand the costs of providing counseling to\nof his housing has also been recognized in\ncarrying a market rate of return, would at-\nlower income families in budget manage-\nsection 2 and in title I.\ntract new capital, for the mortgage market,\nment, home maintenance, and home man-\nCAN HUD CARRY OUT THE PROGRAM?\nfrom such sources as union pension funds.\nagement. The bill authorizes $10 million in\n3. A market-interest rate mortgage, with a\nappropriations.\nOne of the purposes behind establishing\ndirect subsidy paid by the Treasury to the\n2. The committee bill, in title VII, au-\nthe National Home Ownership Foundation\nholder of the mortgage, thus lowering the in-\nthorizes the new Government National Mort-\nin the minds of its cosponsors last year, was\nterest rate and monthly payments for the\ngage Association to guarantee securities is-\nto provide a quasi-public alternative to direct\nhome buyer. The purpose was to avoid the\nsued by FNMA or other private issuers,\nFederal bureaucratic control by the Depart-\nmajor budget impact that accompanies the\nbacked by a pool of FHA and VA loans or\nment of Housing and Urban Development.\nuse of the below-market-interest rate mort-\nmortgages. The purpose is the same as that\nThe sponsors of the NHOF bill were not\ngage program involving Federal National\nof the NHOF-guaranteed debentures sug-\nalone in questioning the capacity or will of\nMortgage Association purchase of these\ngested by the minority; namely, to increase\nthe Department to carry out an expanded\nmortgages utilizing special assistance funds.\nthe supply of mortgage funds and tap new\nprogram of housing for low-in.come citizens.\nThus, each Federal dollar would have a mul-\nsources such as pension funds. It is permis-\nThis presents a considerable challenge to\ntiplier effect many times greater than the\nsive only, limited in scope, the funds raised\nthe Department, in carrying out the proposals\nauthorized in H.R. 17989.\nBMIR mortgage purchase dollar, a major ac-\nwould not be limited to use for lower in-\ncomplishment in a time of expenditure cur-\ncome homeownership. The Department, in\nWhile the Department's testimony before\ntailment. The interest subsidy would be re-\nthe hearings, admitted to not knowing what\nour committee has been reassuring. the con-\npaid into a revolving fund, if and as the buy-\namount of additional funds this approach\ntinued opposition of HUD to my 1966 amend-\ner reached an adequate income level, pre-\nmight attract.\nment requiring a substantial number of low-\nscribed as 70 percent of existing 221 (d) (3)\nAs a result, it is unlikely that the massive\nand moderate-income housing in each pre-\nprogram income limits.\nattraction of new funds for lower income\ndominently residential urban renewal project\n4. Maximum utilization of community-\nhomeownership envisioned by the sponsors\nhas had the opposite effect. As the committee\nbased or neighborhood non profit corpora-\nof the National Home Ownership Foundation\nreport notes, the definition of substantial as\ntions, including technical assistance for their\nAct last year will occur under this bill. The\nonly 20 percent of the project units is hardly\ndevelopment and operation of lower income\nFHA insurance provisions in title I also\nin keeping with the dramatic need for more\nhomeownership programs. This would also\ndepend upon existing lenders and mortgage\nand better housing for our underprivileged\nprovide an opportunity for the prospective\nmoney supply. This makes all the more im-\ncitizens. The change contemplated by sec-\nhome buyers in the area to have a voice in\nportant the direction in section 107(f) (2) to\ntion 413 of this bill increases this percentage\nthe conduct of the program. It would also\nthe Foundation to report to the Congress\nto 51 or better for the aggregate number of\nenlist the aid, expertise, and financial back-\nwhenever insufficient funding is available for\nunits in approved projects within a com-\ning of local community leaders in Govern-\nlower income homeownership purposes. The\nmunity; that is, projects which have had\nment, business, labor, civic organizations,\nFoundation is also directed to make recom-\ntheir plans approved by the Department, not\nthe professions and the like, to build a part-\nmendations for alternate means of securing\nthose which are only in the planning stage.\nnership within the private sector at the na-\nadequate financing.\nThe new amendment, worked out in conjunc-\ntional and local levels.\n3. The committee bill, in title VIII, au-\ntion with Representative Henry Reuss, of\n5. Authority to develop a program of mort-\nthorizes the establishment of a private cor-\nWisconsin, as a bipartisan statement of con-\ngage equity payment insurance, to protect\nporation for profit which is designed to\ngressional intent, also contains a 20-percent\nthe home buyer from losses of income due to\nencourage a partnership approach among\nminimum aggregate for low-income housing\nillness, death, unemployment, and other\ninterests in the private sector at the na-\nsuggested by Representative William Brock,\ncauses not within the home buyer's control.\ntional and local level, in order to encourage\nof Tennessee. It is perhaps the best example I\nTo the greatest extend possible, the Founda-\nlow-income housing. Part of the purpose of\nknow of in the bill of bipartisan. congres-\ntion was directed to work out the program\nthe National Home Ownership Foundation\nsional initiative in the legislative field. Cer-\nwith the private insurance industry, and re-\nauthorized by the bill is also to encourage\ntainly, all of the other low-cost housing pro-\nport back to Congress.\nprivate involvement, including the develop-\ngrams will come to naught if land or struc-\n6. Utilization of the urban renewal pro-\nment of neighborhood organizations inter-\ntures are not assembled and made available\ngram as a means of obtaining land and build-\nested in homeownership programs, which\nat low cost, which is is the major benefit of\nings at reasonable prices to lower the cost of\nwould involve the citizens themselves from\nurban renewal use.\nconstruction, rehabilitation, or the use of\nthe area. Maximum utilization of area resi-\nTwo other amendments which I offered\nexisting housing for the homeownership pro-\ndents or the lower income families to be\nand which have been accepted in title I de-\ngram.\nserved by the program is not pronounced as\nserve mention, if only because of the opposi-\n7. Increase employment opportunities and\na major goal in the committee bill, however,\ntion by HUD to their inclusion. The first\nthe use of self-help for area low-income resi-\nin contrast to the NHOF proposal last year.\nopens the homeownership sections up to\ndents and prospective home buyers.\n5. By amendment to title I (sec. 109)\nutilization of existing housing, as well as\noffered by Representative Garry Brown, of\nhousing involving new construction or sub-\nSIMILARITIES WITH THE PRESENT BILL\nMichigan, the minority obtained inclusion\nstantial rehabilitation. A survey made by my\nAlthough the Department of Housing and\nin the bill of an authorization to the Sec-\noffice among District of Columbia real estate\nUrban Development greeted the NHOF pro-\nretary of HUD to develop, in cooperation with\nagencies indicated the availability of houses\nposal last year with skepticism both for its\nthe private insurance industry, a plan of\nselling for under $18,000 and needing little\ntechnical provisions and its goal of lower\ninsurance to help homeowners meet mort-\nrepair, if any. It also uncovered the poten-\nincome homeownership, sufficient support\ngage payments in times of personal economic\ntial availability of many more renter-oc-\nfrom a variety of groups and individuals\nadversity.\ncupied houses, which would come on the mar-\n5858\nCONGRESSIONAL RECORD HOUSE\nJuly 1, 1968\nket if these very same renters had access to\nCommittee. This in the face of applications\nThe promise it holds for the future of\nmortgage funds. Negro real estate brokers\nfrom needy communities which numbered\nhuman association is due in no small\nwere particularly conscious of this opportu-\nover $4 billion. There is to my knowledge\nnot a single congressional district that does\nmeasure to President Johnson, whose\nnity. The use of existing housing will also\nmean, as the U.S. Civil Rights Commission\nnot have an application for water-and-sewer\nfaith in such an agreement never fal-\nhas pointed out, the immediate implementa-\nfunds and many are most desperate. Under\ntered and whose encouragement and\ntion of the new homeownership program.\nthe circumstances, I think the increase I\nsupport provided a constant stimulus\nCertainly in this time of tension and trouble\nhave suggested is most modest and I know\nand inspiration over 4 long years of ar-\nwithin our cities, any tool that can provide\nit is badly needed.\nduous negotiations.\nan immediate impact, and thus new hope\nNATIONAL FLOOD INSURANCE\nThe importance of the treaty lies not\nto the less fortunate, should be welcomed.\nIt was with a deep sense of personal satis-\nonly in the hopeful pause it offers in the\nWill the Department of Housing and Urban\nfaction to me that the Committee on Bank-\nreckless race toward nuclear armament.\nDevelopment heed this opportunity? Only\ning and Currency adopted my amendment,\ntime will tell.\nIt lies equally in its significance as an\nAnother amendment makes nonprofit\nin the form of a proposed title XI, National\nexample of the ability of humankind to\nFlood Insurance.\ngroups eligible for inclusion in the pro-\nMembers of the House will recall that the\nagree on major issues affecting its wel-\ngram for homeownership financing that\nwish to use existing housing instead of tak-\nproposed national flood insurance legisla-\nfare. It is a tribute to reason which SO\ntion passed the House-H.R. 11197-and the\noften founders when the passions and\ning on the task of rehabilitation in a multi-\nSenate in 1967 but because of far-reaching\nthe ambitions of men are stirred.\nunit project. It is my expectation that as\nthese nonprofit groups, whether church or\nchanges made by a House floor amendment\nThe world looks brighter today, despite\nlabor union, or civic association sponsors,\nin the financing mechanism in the House\nthe turmoil and the turbulence that be-\nbill efforts to resolve the differences between\ngain in confidence and experience, they will\nsets it. The Treaty for the Nonprolifera-\nthe House and Senate versions in conference\nmove on to the more demanding but no less\ntion of Nuclear Weapons has already\nimportant task of increasing the supply of\nhave been abandoned. In short, prior to in-\nstandard housing for homeownership pur-\nclusion of title XI in H.R. 17989, most ob-\nopened the way to further progress in\nservers conceded that flood insurance legis-\nthe stated willingness of the United\nposes.\nTHE RENT CERTIFICATE PROGRAM\nlation had little if any chance of enactment\nStates and the U.S.S.R. to examine the\nin the 90th Congress.\npossibility of limitations on strategic nu-\nIn 1964, I, with other members of the Re-\nAs an original cosponsor of a national\nclear delivery vehicles.\npublican minority introduced the rent cer-\nflood insurance program, the events leading\ntificate plan. It became legislation in 1965,\nThere is indeed reason to rejoice.\nup to the current legislative statement are\nand has since made a great record for some-\nMy congratulations go out to this ad-\nindeed regrettable. Within the past month,\nthing that was opposed by the administra-\nministration and to the men whose\nthe State of New Jersey experienced its worst\ntion and generally not promoted by them.\nnatural disaster of the 20th century, sus-\nabundant good will, skill, and patience\nTo date, it has far outstripped its companion\ntaining more than $150 million in flood dam-\nproduced this splendid new hope for the\nlegislation, rent supplements, in terms of\nage to private and public property. Having\nfuture of mankind.\npeople housed, having provided shelter for\npersonally witnessed the human tragedy and\nover 16,000 families while the rent supple-\nwidescale property damage in the wake of\nment total is just over 2,500. This means\nthese devastating floods, my belief in the\nTHE TAX-EXEMPT FOUNDATION: A\nthat the rent certificate program is respon-\nurgency of a national flood insurance pro-\nsible for placing over 60,000 people in de-\nNEW MAJOR THREAT TO CLEAN\ngram was further sustained.\ncent, safe, and sanitary housing that they\nPOLITICS\nWhen the House last November rejected\ndid not have previously.\nthe proposed financing through Treasury\nThe SPEAKER pro tempore (Mr. PAT-\nIn the present bill there are three sec-\nborrowing authority contained in the flood\nTEN). Under previous order of the House\ntions, 208, 209, and 210 which are perfect-\ninsurance bill, the circumstances surround-\ning amendments that I introduced to facili-\nthe gentleman from New York [Mr.\ning that action were far different than those\ntate the operation of the program.\nROONEY] is recognized for 60 minutes.\nWhere the Secretary had previously re-\nwhich prevail today. I refer to title X of the\nMr. ROONEY of New York. Mr.\nstricted the program in certain localities to\nproposed housing bill where the Congress is\nrehabilitated housing, on the completely\nbeing asked to approve Treasury borrowing\nSpeaker, I want to address you briefly\nauthority in order to finance a national pro-\non what I consider to be a grave and\nunjustified claim that it would cause rents\nto rise, section 208 makes clear that he can\ngram of riot reinsurance. While I support\nlargely unnoticed peril to the election\ntitle X, I think it would be uncharacteris-\nprocess in this country. It has to do with\nno longer impose such regulations unless\nit is specifically SO provided in the act.\ntically inconsistent for a majority of the\none of the most delicately sensitive\nWhere HUD had taken the position that\nHouse of Representatives to support Treasury\nareas; namely, the financing of elections.\n1t could not use the program unless in quan-\nborrowing authority for riot insurance,\nAlthough some Members of the Con-\ntities of 10 or more units, section 209 makes\nwhile rejecting this form of financing for a\ngress have an income from business or\nclear that it can.\nnational flood insurance program of far more\nIn section 210, we have acted to enable\nmodest proportions.\nsome other profession, most of us think\nIn this regard, we should keep in mind\nof ourselves primarily as politicians. All\ntenants to become purchasers of the homes\nthey occupy through the medium of the\nthat flood insurance proposals have been\nof us are proud to be SO designated. Like\nlocal housing authority. This innovation was\nbefore the Congress for more than 10 years,\nmedicine and law, politics is a profes-\nprompted by spontaneous offers from build-\nlong before any thought whatsoever was\nsion with a sacred trust.\ners in all parts of the country, attracted by\nbeing given to the need for a Federal pro-\nI think virtually all Members of the\nthe economics of the operation, to build for\ngram of riot insurance.\nCongress want fervently to keep their\nleasing purposes.\nStated in its most candid terms, if the\nprofession clean, to keep it ethical, to\nNow where the housing authority deems\nCongress of the United States can see its way\nclear to underwrite insurance protection\nkeep it closely responsive to the people,\nit advisable, it may include in its lease an\noption to purchase to be exercised when de-\nagainst lawlessness in our cities, it can ill\nand to keep it operating within certain\nsirable in behalf of the tenant.\nafford to turn a cold shoulder on the personal\nstatutory boundaries.\nThis latter provision could be used even\ngrief and tragedy of those of our law-abiding,\nAnd that is why I think it important\nin multi-family structures where tenants, so\ntaxpaying citizens who experience huge prop-\nto call to your attention what I have\ndesiring to act, occupy units having more\nerty losses caused by floods, or by what are\nhad to overcome in winning the Demo-\nthan 80 percent of the total value of the\nsaid to be \"acts of God.\"\ncratic renomination in my district. The\nstructure.\nfact that I did win does not lessen my\nWATER AND SEWER GRANTS\nTREATY FOR NONPROLIFERATION\nduty to tell you about a device that was\nSection 505 ups the matching sewer and\nOF NUCLEAR WEAPONS\nused by one of my opponents. For, if the\nwater grants from $200 million annually to\nsame device is used extensievly over the\n$500 million annually. I do not particularly\n(Mr. MORGAN asked and was given\ncountry, I think it will truly endanger\nlike to increase authorizations beyond de-\npermission to address the House for 1\nthe democratic process by destroying the\npartmental recommendations. In the case of\nminute and to revise and extend his re-\nrules that now govern the financing of\nthis program, however, I am quite ready to\nmarks and include extraneous matter.)\nelections.\nmake an exception. This is a vital program.\nMr. MORGAN. Mr. Speaker, this ad-\nTo put it bluntly-and I address my-\nUpon it have depended at times, the question\nministration may well congratulate itself\nself personally to every Member of this\nof whether or not a city would have to im-\nport water for drinking purposes.\nupon the tremendous achievement rep-\nCongress-unless you are a wealthy per-\nThe administration has not only given this\nresented by the Treaty for the Non-\nson or unless you have wealthy support-\nprogram a low priority. It has asked for only\nproliferation of Nuclear Weapons. It is\ners who can help you fight back, you\nhalf the funds which Congress authorized\nindeed the most significant development\nmay find yourself in some future elec-\nwhen appearing before the Appropriations\nsince the advent of nuclear power itself.\ntion being overwhelmed by a deluge of\nAPRIL 5, 1968 / VOLUME 7, NUMBER 6\nHERE'S THE ISSUE\nPublished every other week while Congress is in session by the Legislative Department, Chamber of Commerce of the United States,\nWashington, D. C. Subscriptions: $2.50 per year to members of the National Chamber; $3.50 per year to non-members. Rates for multiple\nsubscriptions or bulk orders available on request. Material in this bulletin may be reproduced with or without credit. Editor: Wallace Davies\nThe Housing and Urban Development Act\nPresident Johnson, in a Special Message to Congress,\nrequested in the bill for programs running for one to four\noutlined plans for achieving a formidable housing goal-\nyears beyond fiscal year 1969 are about $10 billion.\nthe construction of 26.2 million new housing units in the\nBut bigger Federal spending is only part of the proposal.\nnext 10 years.\nAlso included are:\nSome perspective on the dimensions of this goal is gained\nfrom the fact that we built only 14.4 million in the last 10\nNew approaches to the way in which housing-subsidies\nare provided for low and moderate income families.\nyears.\nThe President's plans were embodied in the Housing and\nAdditional efforts to tap the resources and skills of\nUrban Development Act of 1968 (S. 3029, H. R. 15624).\nprivate industry.\nAs Congressional hearings opened on this proposal, Robert\nIn essence, these new approaches and additional efforts\nC. Weaver, Secretary of Housing and Urban Development,\nare designed to result in 300,000 publicly-financed housing\nsaid:\nstarts in fiscal 1969-triple the present rate-through (1)\nThe specific housing and community development pro-\na new program of homeownership; (2) modifications and\ngram which we are presenting has many unique features.\nextensions of existing Federal programs in rental and co-\nBut most significant, I believe, is the fact that this total new\noperative housing; and (3) the authorization of a National\neffort is aimed primarily at achieving a single, specific and\nHousing Partnership program, as recommended by the\nunified national goal-the building and rebuilding in 10\nPresident's Committee on Urban Housing, chaired by Edgar\nyears of enough good housing to permit the replacement of\nsubstantially all substandard dwellings.\nF. Kaiser. These partnerships, operating on a national scale,\nwould combine private capital with business and organiza-\nAs befits such a formidable goal, the bill embodying the\ntion skills to construct and operate housing for low and\nplans for achieving it is also a formidable document. In-\nmoderate income families.\ncluded in its 154 pages are 11 major titles and 90 sections,\nranging from grants for model cities to urban mass trans-\nHomeownership\nportation grants to urban planning.\nUntil now, Federal housing assistance for low and mod-\nImportant proposals would make changes in the oper-\nerate income families has been directed almost entirely to\nations of the Federal National Mortgage Association\nrental housing. A limited, experimental program was au-\n(FNMA), and remove the statutory six-percent ceiling on\nthorized in 1966, which authorizes insured mortgages at\nFHA-insured mortgages. Recognition of a market-rate in-\n3 percent interest to non-profit organizations for the pur-\nterest principle is expected to have beneficial effects\nchase and rehabilitation of substandard homes for sub-\nthroughout the housing industry.\nsequent resale, with 3 percent mortgages, to low-income\nMuch of the bill, however, deals specifically with pro-\nfamilies.\nposals to stimulate construction and rehabilitation of hous-\nThis experimental program would be incorporated in a\ning for moderate and low income families.\nnew section, which, essentially, is designed to promote\nOut of the 26 million new housing units envisioned,\nhomeownership by providing a Federal subsidy for inter-\nit is proposed that public assistance be provided for the\nest payments.\nconstruction of 4,000,000, compared to 500,000 in the\nIt is patterned after provisions approved last year by the\nlast decade.\nSenate Banking and Currency Committee, but opposed by\nIt is also proposed that public assistance be provided\nthe Administration. This year, the Administration has en-\nfor the rehabilitation of 2,000,000 existing units in the\ndorsed the principle.\nIt would work, this way:\nnext decade, compared to 25,000 in the past decade.\nA family would pay 20 percent of its monthly income\nAs usual, part of the stimulation to the new construction\nto principal repayment, interest, taxes, insurance and mort-\nand rehabilitation of publicly-assisted units is to come from\ngage insurance premiums. (In computing the monthly in-\nthe appropriations of bigger sums.\ncome, $200 could be deducted for each dependent child.)\nIt is estimated that appropriations and authorizations\nIf the 20 percent did not cover the cost of the mortgage\npayment, the subsidy would cover enough of the interest\ntary of HUD to provide technical assistance 80 percent\ncost to result in the home purchaser paying the equivalent\ninterest free loans for pre-construction costs of non-profit\nof one percent interest.\nsponsors of low or moderate income housing undertakings.\nA mortgage limit of $15,000 ($17,500 in high cost\nIn explaining the provision, HUD spokesmen said:\nareas) would be imposed, except for a family of five or\nMuch of the Federal housing policy for low and moderate\nmore persons where the limits could be $17,500 and\nfamily income families has been geared to the use of the\n$20,000 respectively.\nnonprofit sponsor. However, the experience so far has not\nWhat this could mean specifically is that the average\nbeen satisfactory. Except in rare instances, nonprofit spon-\ncost of $125 to $130 a month on a $15,000 mortgage\nsors have been lacking in experience and technical capacity\ncould be brought down to $71 a month.\nto develop housing.\nThe provision of loans to cover\ncertain preconstruction costs is essential if nonprofit orga-\nUnlike the experimental plan, which depends on direct\nnizations are to have a significant role in the expanded low\nFederal lending from the special assistance funds of Fed-\nand moderate income housing program.\neral National Mortgage Association (FNMA) to support\nits three percent mortgages, this program will rely on the\nRental Housing\nprivate mortgage market to finance it.\nThe bill establishes a new program of interest subsidies,\nBecause the base figure is 20 percent of income, obvious-\nsimilar to the home ownership proposal, which is designed\nly the amount of subsidy will vary according to the income\nto aid low and moderate income families in rented or co-\nof the homeowner, and could decrease as income rises. The\noperative housing.\nbill provides that the family's income be recertified every\nUnder this plan, a non-profit organization or cooperative\ntwo years and appropriate changes be made in the assist-\nwhich operates rental housing would receive subsidies from\nance payment.\nthe Federal Government for the difference between a one\nAssistance under this program will generally be limited\npercent interest rate on the money which was borrowed to\nto new or substantially rehabilitated housing, although a\nconstruct or rehabilitate housing and the actual interest it\nfamily displaced, for example, as the result of an urban\nhad to pay to borrow the funds.\nrenewal project could buy an existing home. Also author-\nThe subsidy would permit the nonprofit operator to\nized for assistance are those families purchasing their dwell-\ncharge lower rents. Tenants would pay either a basic rental\ning unit in a rental project.\ncharge or 25 percent of their average monthly income un-\nLiberalization of FHA Requirements. Homeownership\nder the plan.\nwould also be facilitated by making FHA mortgage insur-\nThe program is intended to replace a present three-\nance available for families who have heretofore been un-\npercent loan program, as well as the program of direct\nable to meet requirements because of their credit histories\nthree percent loans for the elderly and the handicapped.\nor irregular family income patterns, and by extending FHA\nTo provide authorization to assist in the construction or\ninsurance to properties in older declining areas that do not\nrehabilitation of about 1.4 million units of rental housing\nmeet the standards of more stable areas.\nfor low and moderate income families, $75 million in au-\nThe HUD Secretary would be authorized to provide\nthority is asked prior to July 1, 1969, $125 million, for\ncounseling services on such things as budgets, debt man-\n1970, $150 million for 1971, and $150 million for 1972.\nagement to persons who had been turned down previously\nRent Supplements. The bill would make available an\nas bad credit risks.\nadditional $40 million in contract authority for rent supple-\nA new \"special risk insurance fund,\" not intended to be\nment payments in fiscal 1970, plus an additional $100 mil-\nactuarily sound, would be established to cover the Home-\nlion in contract authority in each of the fiscal years 1971,\nownership program, and the credit assistance above, as\n1972, and 1973.\nwell as some parts of the rental and cooperative housing\nUnder the rent supplement program, the Government\nprogram.\npays the difference between 25 percent of a family's in-\nCondominium and Cooperative Ownership. Another\ncome and the actual cost of rent in a privately-owned\nmechanism to permit low and moderate income families to\ndwelling.\nattain an ownership interest in their dwellings is also pro-\nThe $340 million in new contract authority, HUD offi-\nposed. This plan would allow them to purchase an individ-\ncials say, will start the construction or rehabilitation of 2.35\nual family unit in a multi-unit project which has been\nmillion units through fiscal 1973.\nconstructed with Federal funds at below-market-rate in-\nPublic Housing. The bill proposes a sharp increase in\nterest-if the project is converted into a cooperative or\npublic housing,over the next five years-to 775,000 units.\ncondominium. At least a 3 percent down-payment would\nPresently, there are now in operation 680,000 units, with\nbe required, and the purchase could be financed by a 40-\nanother 55,000 units under construction.\nyear mortgage, at below-market interest rates.\nHUD officials say this authorization is \"a key element\nInterest-Free Loans. The bill would authorize the Secre-\nin the President's program of providing six million low and\nmoderate income housing units over the next 10 years.\"\nOther changes include: grants to local housing authori-\nThey say that major emphasis will be placed on produc-\nties to assist them in upgrading their management activities\ntion under the Turnkey method, with about half of the\nand providing additional tenant services, as well as the\nunits expected to be so provided.\nbroadening of existing law to permit local authorities to\nUnder the Turnkey method, private developers can con-\nsell low-rent housing units to tenants in public housing\ntract to build housing or rehabilitate property for eventual\ndevelopments.\nsale to a local housing agency.\nUnder Turnkey, which cuts red-tape, a low-rent project\nNational Housing Partnerships\ncan be constructed in less than half the time traditionally\nAdministration experts have concluded that one reason\nrequired for public housing. The Turnkey concept is also\nwhy big firms and institutional investors, such as insurance\nbeing extended to permit private industry to manage public\ncompanies and pension funds have shied away from invest-\nhousing developments, as well as build them.\nment in low and moderate income housing projects is that\nThe authorization will also be used to lease or buy exist-\na single project is too big a risk.\ning housing, and to provide funds for the extensive mod-\nTo spread the risk, the President asked Congress to au-\nernization of older, existing public housing.\nthorize National Housing Partnerships.\nOther Proposals\nThe bill would authorize an additional $350 million\nIn addition to the proposals for expanding home\nto be earmarked for model cities programs and an addi-\nownership (Title I); rental housing (Title II); and\ntional $1.4 billion for fiscal 1970, including funds for\nthe creation of a National Housing Partnership (Title\nfuture model cities programs.\nIX), discussed in this publication, the bill would make\nThe maximum rehabilitation grant to a low income\nmany other changes in present housing and urban\nhomeowner in an urban renewal or code enforcement\ndevelopment programs. For example:\narea would be increased from the present $1,500 to\nFHA Insurance Operations. The statutory ceiling on\n$2,500, and the three-percent direct loans to rehabilitate\nFHA insured mortgages would be removed, and the Sec-\nproperty in such areas would be extended to June 30,\nretary of HUD would be authorized to set rates as he\n1973. (Title V.)\nfinds necessary to meet the mortgage market.\nUrban Planning and Facilities. The program of supple-\nAmong other things, the maximum FHA-insured prop-\nmental grants for public areas which currently are made\nerty improvement loan would be raised from $3,500 to\nonly in metropolitan areas would be extended to rural\n$5,000 and the maximum maturity would be increased\nareas and the existing program of comprehensive plan-\nfrom five years to seven years. (Title III.)\nning grants would be extended to State agencies for rural\nNew Communities. The Secretary of HUD would be\nand other non-metropolitan areas. (Title VI.)\nauthorized to guarantee up to $50 million in bonds, notes,\nMass Transportation. $190 million would be author-\ndebentures, and other obligations issued by the developer\nized for all mass transportation grants in fiscal 1970 and\nwho is building an entirely new community. The total\nthe definition of urban mass transportation would be\nauthorized amount of the loan guarantees would be $500\nbroadened to permit grants for a greater variety of ex-\nmillion. (Title IV.)\nperimental programs. (Title VII.)\nUrban Renewal. Under a new approach, projects, in\nFNMA. The Federal National Mortgage Association's\neffect, would be divided into annual increments and the\nsecondary market operations would be transferred to a\nFederal commitment at any given time would be limited\nGovernment-chartered private corporation. Two other\nto the net costs in the coming year. Under a \"Neighbor-\nfunctions of the FNMA-special assistance, and man-\nhood Development Program,\" a community could re-\nagement of liquidation, would be reconstituted as the\nceive assistance to carry out urban renewal activities in\nGovernment National Mortgage Association within\none or more urban renewal areas through annual grants\nHUD. (Title VIII.)\nfor two-thirds (or three-fourths in smaller communities\nRural Housing. Direct and indirect insured loans to\nand economic redevelopment areas) of the net cost of\nlow and moderate income families in rural areas which\nthe year's activities. The principal difference from the\ncould not otherwise qualify for Federal housing assist-\npresent system would be that each year the community\nance would be authorized. (Title X.)\nwould request assistance for specific activities it pro-\nDemonstration Projects. Federal payment of the full\nposed to carry out that year, rather than having all the\ncost of urban renewal demonstration projects is among\nfunds tied up for a number of years as now happens in\na number of miscellaneous changes in housing law pro-\nlarge projects.\nposed in Title XI.\nUnder the plan, a Federally chartered corporation would\nIt appears, too, that the annual income eligibility scale\nbe set up as a limited partnership. Big companies would be\nof about $3,800 to $7,200 per family, as approved in\nencouraged to invest in the partnership and buy stock in\nS. 2700 last year, will prevail, at least in the Senate Com-\nthe national corporations.\nmittee, as compared to the Administration's proposed scale\nThe National partnership would then become partners\nthat would subsidize housing for families of five or six\nwith builders in a \"whole host of housing developments\"\nwith annual incomes as high as $10,000.\nfor low and moderate income families.\nThe eligibility income scale for homeownership and\nThe National Partnership would be limited to providing\nrental programs continues, in fact, to be one of contro-\n25 percent of the equity in any individual project, with the\nversy. Despite strong political pressures to include as many\nrest coming from the local areas.\npeople as possible, there is a strong case for concentrat-\nPresidential Assistant Joseph Califano has estimated that\ning such Federal programs on the truly low-income seg-\nas the depreciation on these projects for income tax pur-\nments of our society, rather than dissipating funds through\nposes \"passed through\" the national partnership back to\na larger range.\nthe investors, the after-tax return could be from 13 to 20\nThe Republican members of the Senate Subcommittee\npercent on equity.\nbelieve firmly that the upper level of the income scale\nGenerally Approved\nshould be lowered as much as possible so that families with\nAlthough there are criticisms of details and mecha-\nannual incomes in the $3,000-$5,000 range will benefit\nnisms, the principles of home ownership, a bigger role\nthe most from the rental and home ownership program.\nfor private industry, and more realistic interest rates are\nIn a recent speech, Senator Tower of Texas, pointed\nbeing generally approved.\nout that subsidizing families with incomes up to $10,000\nEspecially important is the shift from the principle of\nannually would encompass 70 percent of all families. He\ndirect Federal lending to private enterprise markets.\nadded:\nHarvey G. Hallenbeck, Jr., Secretary of the Chamber's\nWe should reach out to assist those who but for such\nUrban Affairs Committee, reminded the House Housing\nassistance could not decently house themselves. We should\nSubcommittee that \"in the past, Federal efforts to foster\nresist the philosophy which urges us to reach out and sub-\nbetter housing frequently took the course of attempting to\nsidize higher incomes, and we should demand that hous-\nreduce housing prices (monthly mortgages or rentals) by\ning produced with direct Government assistance be de-\nestablishing artificial interest rates that were below market\nvoted to true low-income housing. There is no such em-\nrates.\" As a result, the Government had to lend the money\nphasis in the Administration's proposals.\ndirectly and then raise it either by taxing or borrowing.\nMr. Hallenbeck also attacked the public housing pro-\nHe said:\ngram on the grounds that the \"families whose incomes are\nIn this way, an elaborate apparatus of transactions and\nthe very lowest, and who have the least potential for in-\nadministrative devices is erected through which Govern-\ncreasing their incomes are being largely ignored.\nment subsidizes housing by, in effect, losing money on its\n\"The low-rent public housing program, with the changes\nlending-and-borrowing and by incurring Government ad-\ncontemplated in this bill will not meet the housing needs\nministrative costs in developing and managing a mortgage\nof the poorest people. It never has met those needs.\"\nportfolio and floating its own issues.\nNot only does this system of direct government lending\nHe recommended that the program be re-directed to\ntend \"to produce disrupting effects in capital markets,\"\nmeeting these needs.\nhe emphasized, \"it also results in the irregular, off-again,\nIn a recent talk, Chairman John Sparkman (D-Ala.),\non-again flow of funds that makes planning for the future\nof the Senate Banking and Currency Committee, declared:\ndifficult for builders who want to provide shelter and for\nSome people believe the only answer to slums and city\nfamilies of modest means who would like to buy or rent\nproblems is money. They point the finger at Washington\nadequate homes.\"\nand the Congress and denounce them for failing to appro-\nProblems\npriate huge sums of money to save our cities.\nThose of you who are familiar with my stand on hous-\nGeneral approval of the new approaches does not mean,\ning know how persistently I work for Federal assistance\nof course, that there are no problems.\nfor housing. However, I disagree strongly with the attitude\nFor one thing, there is the problem of cost at a time\nof some who constantly look to the mote in the eyes of\nof extreme financial urgency.\nCongress rather than to the beam in their own eyes.\nAs a result, it is considered likely that Congress will\nAll of the money in the Federal Treasury would not\ncut down the proposed five-year authorization to a two-\nsolve the problems of our cities. I believe that these prob-\nor possibly three-year authorization.\nlems will only be solved when our nation and all of us\nIt is also considered likely that the proposed subsidy\nare willing to utilize to the fullest extent possible all of our\nto bring the interest rate down to one percent for both\navailable resources.\nhomeowners and rental housing programs may be limited\nOne of our biggest resources, he said, is the efficiency\nto a two percent rate.\nof our private enterprise system.\nIN CONGRESS\nCONGRESS\nincluding provisions imposing a 10 percent\nMembers of Congress generally agree\ntax surcharge and a mandatory $6 billion\nthat the President's decision not to seek\nreduction in Federal spending.\nre-election will have substantial repercus-\nIncluded were changes in Social Security\nsions in Congress, but there is less agree-\nwelfare payments, a two-year extension of the\nment on how it will affect specific bills.\ntime in which States could decide whether\nAlthough Chairman Wilbur D. Mills (D-\nto permit welfare recipients to participate\nArk.) is non-committal, most Members seem to\nin the voluntary part of Medicare, a freeze\nbelieve that the President's action coupled\non Federal employment, quotas on certain\nwith his renewal request for a tax boost may\ntextile imports, the restoration of a tax\nhave brightened prospects for that legisla-\nexemption for advertising revenues of publi-\ntion.\ncations issued by non-profit groups, and\nHouse Appropriations Committee Chairman\nrevocation of a tax exemption for State and\nMahon (D-Tex.), for example, said that a\nlocal industrial bonds, and others.\nbreak in the tax-spending deadlock was prob-\nHow many, if any, of these amendments\nably in the works anyway and might now come\nwill survive the conference is debatable;\nsoon. He, and others, apparently reason that\nthe House has always proved to be jealous of\nas a non-candidate, the President will find\nits tax-initiating authority.\nit easier to abandon some of his spending\nANNUAL RATE CREDIT\nrequests, and thus meet Congressional demands\nfor spending cuts before a tax boost is en-\nAfter months of delay, the\nacted.\nfirst meetings of conferees on the Annual\nRate Credit bill (S.5) are now scheduled for\nHouse Speaker McCormack refused to com-\nment on the effect of the President's\nApril 9-10. The Conference Committee seems\nto be somewhat weighted in favor of the more\nannouncement on specific legislative propos-\nsevere House version of the bill.\nals, but many of the lawmakers obviously\nagree with the views of Rep. Patman (D-Tex.),\nANTI-CRIME\nwho doubts that any further significant act-\nThe Senate Judiciary Committee is\nions will be taken by the 90th Congress.\nexpected to order reported the Safe Streets\n\"Congress is practically over for this ses-\nand Crime Control Act (S. 917) within the\nsion,\" he said, \"in the belief that the\nnext few days. The Senate bill includes\nlegislators will now want to wait and hear\nmany features not contained in the House-\nthe views of the new President-elect.\"\npassed bill (H.R. 5037), such as provisions\nSenate Majority Leader Mansfield (D-\npermitting wiretapping under court orders.\nMont.) said the President's speech opens up\nAn amendment, offered in Committee by Sen.\nthe possibility that\"we may clean up our\nRoman L. Hruska (R-Neb.), to approve a House\nprogram and adjourn around August 1.\"\nprovision, which would allocate 90 percent\nMost experienced observers believe that\nof the funds in block grants to the States,\nthe net over-all impact will be the passage\nwas defeated 8-7.\nof \"must\" legislation, such as appropria-\nTRAVEL TAX\ntions, but that most new proposals involv-\nA travel tax proposal (H.R. 16241),\ning large expenditures will remain on the\nwhich is sharply curtailed from the Adminis-\nshelf.\ntration's request, has been overwhelmingly\nTAXES\napproved by the House. After debate in which\nAlthough conferees started work immed-\nno opposition was voiced, the House voted to\niately, few people were willing to predict\nput a 5 percent ticket tax on all overseas\nhow long it would take them to resolve the\nairline flights, similar to the one now\nsubstantial differences in the Senate and\nimposed on domestic flights. The bill also\nHouse versions of H.R. 15414. The bill was\nreduces from $100 to $10 the amount of duty-\napproved by the House as a comparatively\nfree goods that travelers abroad can bring\nsimple extension of present excise taxes on\nhome.\nautomobiles and telephone services and a\nNot included was the Administration's\nspeedup in corporate income tax payments.\noriginal, and highly-controversial, request\nThe Senate added more than a dozen tax changes,\nthat a graduated tax be placed on virtually\nall overseas tourists outside the Western\nhemisphere who spend more than $7 a day.\nOTHER DEVELOPMENTS\nA new bill (H.R. 16363) governing in-\nThe House Judiciary Committee has filed\nspection of poultry processing plants has\nits. report on a new holiday measure (H.R.\nbeen agreed to by the House Agriculture Com-\n15951, McClory, R-I11.). The bill would\nmittee. The bill generally follows the\nestablish Monday observance of four holidays:\nprinciples of the meat inspection law passed\nWashington's Birthday, to be observed on the\nlast year. It would give States two years\nthird Monday in February; Memorial Day, the\nto implement their own inspection systems\nlast Monday in May; Columbus Day, the second\nand exempts intra-state plants doing less\nMonday in October; and Veterans' Day, the\nthan $15,000 business annually.\n***\nfourth Monday in October.\n***\nA spokesmen for the National Chamber,\nThe House Select Subcommittee on Labor\ntestifying in support of S. 3065, has asked\nthat the bill be clarified before enactment.\nnow tentatively plans to start markup sessions\nThe measure authorizes the Federal Trade Com-\nof the Occupational Safety and Health Act\n(H.R. 14816) the week of April 8. It is\nmission to seek preliminary injunctions a-\nreliably reported that the bill will be ex-\ngainst any person it believes to be engaged\ntensively revised.\nin unfair practices against a consumer. The\n***\nChamber urged that the bill make clear the\nThe Agriculture Fair Practices Act (S.\ncourt has unquestioned authority to exercise\n109) has gone to the White. House for signa-\n\"sound discretion\" before granting the in-\nture, following approval by the Senate of\njunction.\n***\nHouse amendments. The bill is designed to\nSen. Ellender (D-La.), Chairman of the\nprôtect the right of an agricultural producer\nHouse Agriculture Committee, has taken the\nto decide, free from improper pressures,\nwhether he wishes to belong to a marketing or\nunusual step of asking the House to defeat\nor modify a bill approved by his Committee.\nbargaining association.\n***\nThe bill, S. 1975, forbids the import. of\nThe Senate Banking and Currency Committee\nlong-staple cotton from any nation severing\nhopes to order reported its omnibus housing\ndiplomatic relations with the U.S.; i.e.\nbill (S. 3029) by the Easter recess, and is\nEgypt and the Sudan. Senator Ellender says\nscheduled to hold executive sessions on the\nthe bill is unnecessary.\n***\nmeasure on April 8,9, and 10. Observers\ndoubt that work on the complicated measure\nThe House Commerce Committee has approv-\ncan be completed in three days.\ned H. J. Res. 958, providing a $2 million\n***\nstudy of the Nation's automobile insurance\nA new vocational education bill (H.R.\nsystem. The Senate Commerce Committee has\n16460) has been introduced in the House by\nalso approved a similar bill.... Meanwhile,\nthe Communications and Power Subcommittee of\nRep. Meeds (D-Wash.) and 35 other House mem-\nbers. The bill would boost the Administra-\nthe House Commerce Committee, has approved\ntion's request for $290 million in fiscal\nan amended version of the Senate-passed bill,\n1969 to $785 million, and provide annual in-\nS. 1166, which provides Federal safety regu-\ncreases to a level of $2 billion by 1972.\nlation of natural gas pipelines. The Sub-\nThe bill contemplates a major overhaul of\ncommittee excluded some 63,000 miles of dis-\nvocational education in the Nation's schools,\ntribution lines and lessened the proposed\nso that every high school graduate would be\npenalties for offenses.\n***\nequipped with a skill.\n***\nA close battle is expected in the House\nRules Committee over granting a rule for H.R.\n16014, which would bring farm laborers under\ncoverage of the National Labor Relations Act.\n***\nHERE'S THE ISSUE\nThe Housing and Urban Development Act\nAPRIL 5, 1968\nDIFFERENCES BETWEEN RENT CERTIFICATE PROGRAM (GOP) &\nRENT SUPPLEMENT PROGRAM (DEM.)\nThere has been considerable confusion between the Rent Supplement Program sponsored\nby the Administration and the Republican-sponsored Rent Certificate Program.\nThe Rent Certificate Program (which makes use of privately-owned, privately-operated,\nhousing units paying full taxes) is a part of the Public Housing program and is not\nonly fully funded but already in operation. The Rent Supplement Program has taken\nsome time to get into operation. Current figures (8/31/68) as to people housed are:\nRent Certificates - 26,000 units (100,000+ people) Rent Supplements - 3,000 units\n(10,000+ people).\nBasically, the differences between the two programs which point up the advantages\nwhich the Rent Certificate Program has are listed below:\n1. The Rent Certificate Program can and is immediately available because it\nuses existing housing that is \"decent, safe, and sanitary.\" The Rent\nSupplement Program, on the other hand, is one to two years away from full\noperation if it achieves that. Even though it is now funded, it cannot\nbe used to house people now chiefly because its program is restricted to\nnewly constructed or major rehabilitated housing. It cannot use existing\nhousing except for the 231 and 202 elderly housing programs which by law\nsplit 5 percent of the authorization although at present (9/1/68) they\naccount for 60 percent plus of the units that are rent supplemented, all\nof which could have been utilized under the Rent Certificate Program at\nless cost to both the government and the tenant.\n2. The Rent Certificate Program will cost less than either Rent Supplements\nor present public housing. Subsidy payments for Rent Certificates are\nrestricted to that which can be paid for comparable units in the regular\npublic housing program. Such a limitation was included in the original\nRent Supplement Program, but stricken by Democratic action, because they\nknew they could not stay within the bounds set. Also, the Rent Certifi-\ncate Program will not carry many of the administrative and construction\ncosts of the regular public housing program.\n3. The Rent Certificate Program will not require the creation of a parallel\nbureaucracy as it is specifically tied to the present housing program\nand the officials managing it. Rent Supplements will be paid out through\nthe Federal Housing Administration, which is not set up to screen ap-\nplicants and has neither the personnel nor the offices (76 FHA offices\nas against over 1,700 local housing authority offices) to operate an\nefficient, large program.\n4. The Rent Certificate program has a high measure of local control in-\nherently and also must be approved by the local governing body of its\narea. The Administration is continuously seeking to avoid this control\nfor Rent Supplements and succeeded in avoiding it in the basic legis-\nlation. The Appropriations Committee attached the control as a con-\ndition precedent to granting the program funds.\n5. Rent Certificate units must be voluntarily offered. Tenant selection\nis centered in the owner of the privately operated units. Rent Sup-\nplements have something of this, but Lent Supplement tenants will OC-\ncupy 90 to 100 percent of their structures. In the Rent Certificate\nProgram only 10 percent of the available units in all but the smaller\nbuildings can be used by Rent Certificate tenants, without specific\nwaiver.\n6. The Rent Certificate Program is limited to one to five year leases\nthat can be renewed. The Rent Supplement Program contracts run ir-\nrevocably for 40 years. Thus, the Rent Certificates permits a con-\nsiderable amount of flexibility with which to deal with whatever\nexperience is encountered. Rent Supplements do not. You contract\nfor 40 years.\nBoth the Rent Certificate and the Rent Supplement programs will be paying full taxes\non the quarters subsidized. In either case, this would be more than public housing\npays through its system of Payments In Lieu of Taxes (Pilot).\nWILLIAM A. BARRETT, PA., CHAIRMAN\nWILLIAM B. WIDNALL, N.J.\nLEONOR K. SULLIVAN, MO.\nPAUL A. FINO, N.Y.\nTHOMAS L. ASHLEY, OHIO\nFLORENCE P. DWYER, N.J.\nWILLIAM S. MOORHEAD, PA.\nDEL CLAWSON, CALIF.\nROBERT G. STEPHENS, JR., GA.\nHOUSE OF REPRESENTATIVES\nGARRY BROWN, MICH.\nFERNAND J. ST GERMAIN, R.I.\nHENRY B. GONZALEZ, TEX.\nJ. J. MCEWAN, JR., STAFF DIRECTOR\nHENRY S. REUSS, WIS.\nKENNETH W. BURROWS\nSUBCOMMITTEE ON HOUSING\nDEPUTY STAFF DIRECTOR\nOF THE\nCASEY IRELAND\nMINORITY STAFF MEMBER\nCOMMITTEE ON BANKING AND CURRENCY\nNINETIETH CONGRESS\nWASHINGTON, D.C.\n23 September 1968\nCONFIDENTIAL\nTO: The Honorable William B. Widnall\nFROM: Casey Ireland, Minority Staff Member\nRE: Presidential Instructions to HUD to More Than Double\nProduction of Low Income (Public Housing) Units.\nIn 1964, Congress raised the annual subsidy level at which\npublic housing could be supported from $336 million to $366 mil-\nlion, authorising an additional 37,500 housing starts. In 1965,\nit increased the support level by $188 million to $554 million,\nsupposedly providing the HAA with an additional capability of\n60,000 more units annually for the ensuing four years.\nDespite this, the annual number of units placed under manage-\nment rocked along at approximately 30,000. It has been at this\nfigure - a little above it or a little below - for years. Present\nsupport payments have only recently gone above $200 million. so\ndespite the Administration's citation of figures proving the need\nfor the program, their production to meet this need remained at\njust about what it had been during the Eisenhover years. Then....\nOn September 12, 1967, Secretary Robert C. Neaver of HUD and Presi-\ndential Special Assistant Joseph A. Califano held a press confer-\nence in the press secretary's office in the White House.\nMr. Califano opened the conference by saying:\n\"Early in August the President asked Secretary Neaver to\nsee if he could double the number of low income housing units\nthat would be available for occupancy in the next year. Secre-\ntary Weaver has been working on this for the past several weeks.\nHe reported to the President that he would be able to achieve\nthis.\"\n-continued-\n- 2 -\nSecretary Weaver continued, saying:\n\"That means whereas currently we are producing some 35,000\nsuch units annually, we will be able to produce 70,000 units for\nthe next 12 months. Translated into people, that means increas-\ning the mumber of low income families housed from 150,000 to\nabout 300,000.\"\nI am attaching a full copy of the published transcript of\nthat conference which centains the above quotes. Further on,\non page two, you will note a passing reference to \"our leasing\nprogram\" which you first proposed as legislation in 1964 and\nwhich was adopted by the Congress in 1965 despite HUD's bitter\nopposition. (The latter can be found together with your rebuttal\non pages 210-211, and 217 of the 1964 Housing hearings of the\nHouse of Representatives.)\nThe Housing Acts of 1964 and 1965 increased the authorise-\ntion subsidy for public housing sufficiently so that HUD esti-\nmated that the Department would be able to preduce 277,500 more\nunits for addition to the program. (The authorisation is expressed\nin dollars in the law, but the Department publicly speaks of\nunits.) The dollar increases were $30,250,000 by the Housing\nAct of 1964 and $188,000,000 by the Housing Act of 1965.\nDespite these large contract authorizations in the two years\nmentioned, the units placed under management-those available for\noccupancy-still hovered,aprevioualy stated, at around the 30,000\nfigure annually. The new contract authority, HUD said, would -\nable the Department to produce at twice the level previously. It\nnever came cless.\nI believe the MID press conference of a year age was called\nto cover up the Department's failure to raise production after\nbeing authorized to do so. Not having reached their announced\ngoals, and no longer being able to blame Congress for refusing to\nincrease an authorization they had been unable to implement, HUD\nused publicity to cover up their production failure and to propare\nthe way for its 1968 request for even a greater authorization.\n-continued\n- 3 -\nSince they had to strain mightily to produce 35,000 units\nin the 12 month period prior to the press conference, the\nquestion arose as to just how in a year's time they expected to\ndouble to an annual production of 70,000. The following quote\nfrom page 7 of the transcript of the press conference indicates\ntheir publicised thinking:\n\"Secretary Neaver: No. we don't know. I can tell you that\nthe vast majority will be in new construction. Maybe 10 or 15 per-\ncent will be rehabilitation and about 10 percent leasing, roughly.\n'Q. And the new construction will be mostly Turnkey?\n'Secretary Weaver: Yes.\"\nStange as it some, the Administration, although it is a\nlittle past a year in time from the announcement of its press\nconference, is close to realizing its goal. Its \"turnkey\" opera-\ntion has not, however, been the answer as the Secretary predicted\nit would be.\nWhat has turned the trick for them - they have presently\nbagged about 62,500 of the 70,000 unit goal - has been the scerned\n(because it was a GOP proposed innovation) rent certificate leas-\ning program. Their normal annual preduction has rocked along as\nusual, roughly the 30,000 unit level. The leasing program, how-\never, has shot up into the high 20 thousand level and continues\nto grow in popularity. The balance is accounted for by acquisi-\ntions of existing structures and projects, an implementation of\nthe leasing program's principle of using existing housing.\nI am bringing this to your attention because of my consider-\nable suspicion that the Administration intends to call public at-\ntention to its \"momentous\" achievement as soon as the goal of\n70,000 units is reached. I further suspect that they will at-\ntempt to make use of it in the campaign. The foregoing facts are\nmade available for you for such rebuttal as you may wish to make.\n-continued-\n- 4 -\nThe point simply is that the Administration was able to\nreach the goal it did, not through redoubling its efforts, but\nthrough the use of a program which you and the GOP minority\noriginally proposed, which they fought in 1964, add which was\nenacted in 1965 at the same time as the much touted rent supple-\nment program. Today, the rent certificate-leasing program is\nsheltering over 100,000 people in its 26,000+ units, and is mere\nthan eight times as large as the rent supplements' 3,000+ units.\nIt is also giving about ten times as many people decent, safe,\nand sanitary homes.\nI am sending a copy of this memorandum to Don Webster, who\nis on the staff of former Vice President Mixon's Key Issues Com-\nmittee, operating here in Washington, against the possibility\nthat the matter may enter into the National Campaign.\nAs a final note, the level of subsidy at which public hous-\ning can now be supported has been raised by the 1968 Housing Act\nfrom $554 million 250 thousand, to $954 million 250 thousand -\na $400 million increase. Present payment amounts to $350 million\nannually. At present rates of progress, it could be a long time\nbefore HUD needs to come back for additional authorisation, even\nthough most of the authorization is eaten up by inflation and the\ninability of the agency to really produce. The $400 million in-\ncrease referred to above should produce-at present costa-150,000\nhomes. BUT WHEN?\nFOR IMMEDIATE RELEASE\nSEPTEMBER 12, 1967\nOFFICE OF THE WHITE HOUSE PRESS SECRETARY\nTHE WHITE HOUSE\nPRESS CONFERENCE OF HON. ROBERT\np50mg\nC. WEAVER, SECRETARY, HOUSING AND\ncut\nURBAN DEVELOPMENT; AND JOSEPH\nA. CALIFANO, JR., SPECIAL ASSISTANT\nTO THE PRESIDENT\nTHE PRESS SECRETARY'S OFFICE\nAT 12:35 P.M. EDT\nMR. CALIFANO: The President met this morning for\nabout 30 minutes with Secretary of Housing and Urban Develop-\nment Weaver.\nEarly in August the President asked Secretary\nWeaver to see if he could double the number of low income\nhousing units that would be available for occupancy in the\nnext year. Secretary Weaver has been working on this for the\npast several weeks. He reported to the President that he would\nbe able to achieve this.\nI will let the Secretary take over and tell you\nwhat he is going to do.\nSECRETARY WEAVER: By revising our procedures,\nwe will be able -- as the President requested -- to double the\nnumber of low rent housing units that will be occupied by\nfamilies over the next 12 months.\nThat means whereas currently we are producing some\n35,000 such units annually, we will be able to produce 70,000\nunits for the next 12 months. Translated into people, that\nmeans increasing the number of low income families housed\nfrom 150,000 to about 300,000.\nThis is a continuation of the effort which we started\nsome time ago -- again at the President's request -- in order\nto make changes, to upgrade, and to make more effective and\nefficient the public housing program.\nFirst, there was the Turnkey approach to construc-\ntion. As you know, this is the approach which involves a\nprivate bidder who acquires a site, and does the planning in\naccordance with the requirements of the local housing authority.\nHe hires the architect, completes the building, and turns the\nkey over to the local housing authority when the building is\ncomplete. This effects great savings in time -- cutting time\nsometimes over more than a half and also gives significant\neconomies in cost.\nSecond, a fortnight ago we announced --- at the\nPresident's request -- the utilization of private management\nin operation of the projects which are being built under the\nTurnkey method in public housing.\nMORE\n- 2 -\nFinally, we have a revision of priorities in the\nprocessing of these projects. Briefly, what we are going to\ndo is this:\nFirst, we are having every local housing authority\nlook at its inventory of projects that it has in the pipeline.\nThese may be in planning. They may be in just preliminary\nplanning. We are asking them to identify every one of these\nprojects which can be put under construction in the next 9\nmonths.\nWe will then give priority to those projects which\ncan then be started within the next 9 months.\nAs a result of the utilization of our leasing\nprogram and the rehabilitation program, we will be able to\ndouble the number of units that will be in occupancy in the\nnext 12 months.\nBriefly, this is what we are going to do and how\nwe are going to do it. If you have any questions, I will\ntake them.\n2\nMr. Weaver, you cited an increase in the number\nof low income families that could be housed?\nSECRETARY WEAVER: Yes.\nQ\nYou mean an increase in the number of additional\nones to be housed?\nSECRETARY WEAVER: Yes.\n2\nWere 35,000 units a year the number you would\nneed to house 150,000 people, not families?\nSECRETARY WEAVER: Yes. The figures that I gave,\n35,000 and 70,000, are dwelling units. 150,000 and 300,000\nare individuals.\nI\nMr. Secretary, how will this affect the cash out-\nflow from HUD? Will this increase the costs of the various\nprograms?\nSECRETARY WEAVER: This will be done under our\npresent authorizations. It will simply accelerate the program\nwhich we already have authority for.\nQ\nCan you tell us what that present authorization\nis, Mr. Secretary?\nSECRETARY WEAVER: We have an authorization which goes\nback over many years, but have 240,000 units of public housing\nin the last omnibus bill. This will be within that authoriza-\ntion. You see in this program, you authorize a number of units\nrather than a dollar amount.\nQ\n240,000 is not an annual figure, is it?\nSECRETARY WEAVER: No.\nMORE\n- 3 -\nI\nA figure since the Housing Act of '58, or\nwhatever?\nSECRETARY WEAVER: Over a period of four years.\n2\nMr. Secretary, will this cost the Government\nany additional money?\nSECRETARY WEAVER: No. The only difference here\nwill be the time when the annual contributions -- which is the\ncost to the Government -- will be paid may be somewhat more\nrapid than it would otherwise have been, but there will be\nno additional authorization or appropriations needed to carry\nout this program.\nQ\nWill it cost more money in fiscal year 1968\nthan it otherwise would have cost?\nSECRETARY WEAVER: Not in '68, no.\na\nHow about '69?\nSECRETARY WEAVER: In '69, it will accelerate the time\nit begins so your outlay will be greater in that year.\na\nMr. Secretary, what kind of programs will have\nto be delayed in order to give priority to these?\nSECRETARY WEAVER: The programs that would be delayed\nwill be those developments which are now not sufficiently\nadvanced so that they can be put into construction quickly.\nThey will be pushed back in the pipeline.\nThose that can be will be pushed up in the pipeline.\nQ\nMr. Secretary, will this in effect be a one-shot\neffort, or will you be able to sustain this double pace in\nfuture years?\nSECRETARY WEAVER: We will be able to sustain it for a\ncouple of years. By that time, we will have caught up with\nthe pipeline.\nYou cannot continue to do this. What you are\nreally doing is pushing up in the processing in time those\nthings which would normally be perhaps two years from now --\nputting it up in a year's time.\nWhen you do that a couple of years, you about\nrun out.\nQ\nThe yardstick for pushing things up is the\nimpact of speeding up processing, not the social need of one\nproject against another?\nSECRETARY WEAVER: The social needs are about equal.\nThey all are for low income people, displaced and in need\nof housing. All of them have a high incidence of social need\nto be included in the first place.\nAs between one degree of social need which is high,\nand another a little higher, the answer would be yes. But\nthey all qualify so far as social need is concerned.\n- 4 -\nI\nThere is no idea the Federal Government is\ngoing to target those cities where there have been civil\ndisorders?\nSECRETARY WEAVER: No, there is no connection\nbetween that and this program.\n2\nMr. Secretary, we have been dealing with this\nfigure of 35,000. Has that been a limit, a congressional\nlimit, or an informally set goal?\nWhere has this figure come from?\nSECRETARY WEAVER: There are two figures that set a\nlimit on us. First is the amount of annual contributions,\nwhich is the subsidy with which we can enter the contracts.\nThat is around 60,000 units a year.\nThe second is the number of units that are produced\nwithin that limitation. That has been running around 35,000.\nWe are now going to exceed both because we have a backlog.\nSo we will double 35,000 and come up with the 70,000.\nWe can do this for a couple of years under the existing\nauthorization until we catch up with the backlog.\n2\nIs this Turnkey method of construction more\nexpensive?\nSECRETARY WEAVER: No. It is less expensive.\nQ\nWhy is that, sir?\nSECRETARY WEAVER: In the first place, time is\nmoney in building. Where a project is in development and\nplanning for two or three years, you have extremely great\nexpenses of overhead, of operations, of tax estimates if it\nisn't purchased, and of upkeep and maintenance, and so forth.\nSecondly, by the Turnkey method because you don't\ngo out and advertise for bids, because the developer himself\nhas his own planning and architects -- the architectural paper\nwork and amount of plans necessary is much smaller than it would\nbe otherwise.\nUnder a government-owned-and-operated construction,\nyou have to have a great deal of inspection which would be done\nby the architect for a private builder. He would be inspecting\nfor himself because he has to get the product in order so that\nit meets the specifications to get it accepted.\nTherefore, you get these economies. But, I think time\nis the greatest of the economies.\nQ\nMr. Secretary, how many families now live in low\nrent, federally subsidized housing?\nSECRETARY WEAVER: Over 600,000.\nMORE\n- 5 -\n0\nSo this is an increment to that figure?\nSECRETARY WEAVER: Yes.\n0\nSix hundred thousand families or individuals?\nSECRETARY WEAVER: Families.\n0\nWhen you talked about going from 150,000 to\n300,000, you are talking about individuals?\nSECRETARY WEAVER: Yes. But when I talked about units,\nI went from 35,000 to 70,000.\n0\nWhat would be the impact of delaying projects\nnot as far along in the pipeline? Will work stop in architects\nand engineers offices? Will contracts not be let that might\notherwise be let?\nSECRETARY WEAVER: No. By and large, where you have\narchitects and engineers that have progressed to the point\nwhere they have made a significant contribution, there will\nbe a tendency to continue that and bring it to fruition.\nWhere they have not progressed very far and the\namount of expenditure is minimal, we will cut it off and save\nmoney and time.\n0\nMr. Secretary, do you have the names of cities\nwhere you have projects that are far enough along so they can\nbe identified?\nSECRETARY WEAVER: We sent the instructions out on\nthis yesterday. We had a meeting of our regional people on\nFriday. We have worked pretty fast, but not that fast.\n0\nMr. Secretary, why couldn't this have been\ndone before?\nSECRETARY WEAVER: It couldn't have been done before\nlast year, because we didn't have the Turnkey method before\nlast year. It took some time to get the new method understood\nby the local housing authorities and to where they can use it.\nIt has taken about a year's experience for many of\nthem to become convinced that it is workable and to accept it.\nRemember, this is done by local authorities and not directly\nby us.\nSecondly, it took us about 12 months to revise our\nregulations under Turnkey to make it most effective and\nefficient.\n0\nMr. Secretary, do you think most of these 70,000\nunits will be built under Turnkey?\nSECRETARY WEAVER: I would say not all, but the vast\nmajority.\nC\nCan you put any dollar figure on this?\nMORE\n- 6 -\nSECRETARY WEAVER: What sort of dollar figure?\na\nCan you tell us what they would have otherwise\nbeen in '68, but there will be an increase in payout during '69?\nSECRETARY WEAVER: No, I can't, because it depends\non the nature of the project. I couldn't give you an exact\nfigure.\n0\nGenerally speaking, what is the value of the\nlow-rent housing?\nSECRETARY WEAVER: If you mean the value as far as\nconstruction is concerned, these average around about probably\n$14,000 or $15,000 a unit. This is including the land and\nthe construction costs.\nC\nHow much of that will be Federal money? All\nof it?\nSECRETARY WEAVER: None of it.\nO\nWhere does the subsidy come in?\nSECRETARY WEAVER: That has nothing to do with that.\nThat is the construction cost.\nThe way public housing is financed is that there\nare local bonds issued by the local public agency which is the\nlocal authority. These are guaranteed by the Federal Govern-\nment and they are sold as tax-exempt local bonds. Therefore,\nyou get a very relatively -- low rate of interest.\nThe cost to the government on this is not there, be-\ncause the bonds are paid back out of annual contributions.\nThe annual contributions are the figures which cost the\ngovernment. Each unit of housing, in public housing, now\naverages around $700 a unit in subsidy.\n0\nYour annual costs, Mr. Secretary, your annual\ncontributions, are the difference between the revenue that\nthe local people get from the project and the costs of retiring\nbonds? The government makes up that difference through annual\ncontributions?\nSECRETARY WEAVER: No. There are two costs involved,\nof course. There are the costs of the operation of the pro-\nject, management, repair, upkeep, etcetera. Then there are\nthe costs of the retirement of the bonds and the interest\non the bonds.\nAnnual contributions are used to retire and to pay\nthe interest on the bonds.\n0\nFor the entire retirement and interest of the\nbonds from the Federal Government?\nSECRETARY WEAVER: Except sometimes there are\nresidual receipts.\nQ\nBy and large, the receipts cover only the\noperating costs of the project?\nMORE\n- 7 -\nSECRETARY WEAVER: That is right.\nQ\nWill this, in effect, double the construction\nwork, the brick and mortar construction work, that would have\nbeen done under this program; and when will that impact begin\nto be felt, from the contractors' point of view?\nSECRETARY WEAVER: within the next month and it will\ncertainly achieve that purpose during the year. All of it will\nnot be doubled construction, because in some instances the\nleasing program is utilized. But most of it is new construction\nor rehabilitation of existing units.\nQ\nCan you give us a breakdown of the 70,000 units?\nSECRETARY WEAVER: No, we don't know. I can tell\nyou that the vast majority will be in new construction. Maybe\n10 or 15 percent will be rehabilitation and about 10 percent\nleasing, roughly.\nQ\nAnd the new construction will be mostly Turnkey?\nSECRETARY WEAVER: Yes.\n0\nMr. Secretary, can you tell us how long the\nregional commissioners have to sort out this program? Do\nthey have a deadline?\nSECRETARY WEAVER: We expect to get the information\nin within 30 days.\n0\nWill the various projects be announced locally\nor in Washington?\nSECRETARY WEAVER: Locally.\na\nYou will then have to speed up your processing?\nSECRETARY WEAVER: We have already done that. We\ndid that before we announced the program, before we got our\npeople in, SO we would be prepared to meet the new program.\nO If an authority in the mid-West sends a new list\nto Chicago, theoretically they should be able to get approval\nright away: no time lag?\nSECRETARY WEAVER: Nothing happens right away, but\nthey should get it with a minimum of delay. Obviously, we\nare going to have to process real quickly in order to meet\nthis goal.\n0\nMr. Secretary, did the possibility of doing all\nthis come to the President and then he suggested that you go\nahead and do it, or did you just pick out of the air, \"Let's\nsee if you can double it\"?\nSECRETARY WEAVER: This evolved as we went along in\nthis. The President has been pressing on this, as I said,\nover the last year. Fach new step has come out of the others\nand each time he set a higher goal for us to meet. So far,\nwe have been able to meet them.\nTHE PRESS: Thank you, sir.\nEND\nAT 12:50 P.M. EDT\ntomorrow's transportation\nair\n7150\nCONGRESSIONAL RECORD SENATE\nJune 13, 1968\nS. 3641-AIRPORT DEVELOPMENT\nAs was done when highway user taxes\nFEDERAL AIRPORT DEVELOPMENT ACT OF 1968\nACT OF 1968 INTRODUCED\nwere imposed, we should provide that\nOUTLINE OF PROVISIONS\nURGENT NEED FOR TRUST FUND\naviation user taxes be deposited in and\n1. Establishes an Airport Development\nCITED\nadministered under the trust fund ar-\nTrust Fund administered by the Secretary\nMr. RANDOLPH. Mr. President, on\nrangement to serve the purposes for\nof Transportation.\nbehalf of myself and Mr. Moss, I have\nwhich levied and collected.\n2. Fund would be supported by special\ntaxes of 2% on domestic passenger tickets\nintroduced for appropriate reference a\nThe administration has proposed a\nand $2 per passenger in foreign air trans-\nbill, the Federal Airport Development\nprogram predicated on user taxes for\nportation. While the trust-funded program\nAct of 1968.\nairport and airways development, but\nwould function without general tax revenues,\nThe dominant features of the measure\nwithout a trust fund arrangement. That\nit does not preclude such appropriations.\nwould establish an airport development\nproposal is in legislative form and is\n3. Fund would be used:\ntrust fund which would be supported by\nscheduled for consideration in hearings\n(a) primarily for contracts of up to 40\nspecial taxes of 2 percent on domestic\nbeginning June 18 in the Commerce\nyears in length by the Secretary of Trans-\nportation with local airport sponsors to pay\nair passenger tickets and $2 per passenger\nCommittee's Aviation Subcommittee,\nup to 75% of the principal and interest of\nin foreign air transportation on flights\nunder the chairmanship of the distin-\nlocal airport bonds for airfield and terminal\noriginating at U.S. airports. Although\nguished senior Senator from Oklahoma\nprojects; and/or,\nthe trust-funded program would func-\n[Mr. MONRONEY]: That subcommittee\n(b) to guarantee the full amount of such\nheld hearings last fall on the airports\nlocal bonds; and/or,\ntion without general tax revenues, the\nand airways problems and issued tenta-\n(c) to purchase local airport bonds for re-\nlegislation does not preclude such ap-\npropriations. in fact, the measure con-\ntive recommendations that a system of\nsale; and,\nuser taxes and a trust fund arrange-\n(d) to make short-term loans for advance\ntemplates continuation of the existing\nplanning and land acquisition.\nFederal-aid airport program with some\nment be established by law as the core\n4. Funds would be available to:\nexpenditure authorizations. But I visu-\nof a program for solution of the critical\n(a) all airports served by air carriers;\nalize the FAAP-general treasury fi-\nairports and airways situation.\n(b) general aviation airports designed to\nnanced-as being limited essentially to\nI believe in the validity of that tenta-\nrelieve congestion at major airports.\naid for small economic development air-\ntive report issued by the Aviation Sub-\n5. Contemplates continuation and exten-\nsion of authorization of FAAP program con-\nports. The proposed trust-funded pro-\ncommittee earlier this year on the basis\ntinuance for small economic development air-\ngram® would be for the development of\nof its findings during the 1967 hearings.\nports and for general aviation airports.\na better air carrier and general purpose\nThe air carrier industry is almost unani-\n6. Tax revenues of $109 million could be\nairport system.\nmous, I am told in endorsing most of\nrealized in FY 1969 and would support issu-\nCongress has been asked to recognize\nthe recommendations of the subcom-\nance of $1,950,000,000 in local airport bonds\nthat the existing system of air carrier\nmittee. Through the Air Transport As-\nthe first year, if enacted promptly.\nand public use airports and airport\nsociation, the scheduled carriers are on\n7. Congress each year, through appropria-\ntion acts covering FY 1969 and the four suc-\nterminal and access facilities within the\nthe record with their views, as are most\nceeding fiscal years, would authorize the Sec-\nUnited States is rapidly becoming inade-\nother segments of the aviation industry.\nretary of Transportation to make the ex-\nquate to meet the present and future\nSpokesmen for the administration like-\npenditures to meet the obligations incurred.\nneeds for civil aviation operations.\nwise are on the record of the general\nThe program is proposed as a means of\nCongress also should declare that the\nhearings. But now there is to be a round\ngenerating large amounts of capital to meet\nFederal Government has a responsibility\nof hearings on specific legislation.\nthe nation's most immediate major airport\nto plan, encourage, and assist in the de-\nconstruction requirements without any bur-\nFrankly, Mr. President, I believe the\nden on the general taxpayer and without\nvelopment of a system of airports ade-\nbest specific recommendations for a pro-\nunduly burdening airline passengers. The\nquate to meet our civil aviation, postal\ngram of airport development through\nprovision in Sec. 3(b) for federal contracts\nservice, and national defense needs.\nthe user tax-trust fund arrangement\nto pay a portion of local debt service costs is\nThere seems to us to be ample evidence\nhave been those proposed on behalf of\nbased on Sec. 10 of the U.S. Housing Act of\nthat Congress should realize that finan-\nthe air carrier industry by Stuart G. Tip-\n1937, as amended (42 U.S.C. 1410). The trust\ncial assistance beyond that provided un-\nton, president of the Air Transport As-\nfund feature is patterned in part on the\nder existing laws is necessary to assure an\nHighway Trust Fund. (see 23 U.S.C. 120,\nsociation. Those recommendations are\nnote)\nadequate system of air carrier and public\nwell represented in the provisions of the\nuse airports and air terminals and related\nmeasure introduced today, but include\nMr. LAUSCHE. Mr. President, will the\nfacilities.\nprovisions also recommended by numer-\nSenate yield for a question?\nTo those ends, we propose that the\nous other competent sources.\nMr. RANDOLPH. I yield.\ncosts of providing and maintaining such\nIt is our feeling that the ideas for\nMr. LAUSCHE. Do I correctly under-\nairports and facilities should, insofar as\nlegislation embraced in this measure\nstand that the bill just submitted by the\nis practicable, be borne in the main by\nshould be available to the Aviation Sub-\nSenator from West Virginia contem-\nairport operators and the users of such\nplates establishing a trust fund, similar\ncommittee and the full Commerce Com-\nairports. Thus, the base of financing\nto the trust fund under which highways\nmittee at the time of the hearings. They\nwould shift from Treasury general funds\nare built, for the construction of airport\nmerit consideration, as do the admin-\nto reliance principally on user tax in-\nexpansion and new facilities?\nistration proposals and numerous cogent\ncome and trust fund management.\nMr. RANDOLPH. The understanding\nand pertinent concepts espoused by the\nI emphasize that the term \"air car-\nof the Senator from Ohio is correct.\nchairmen and members of both the sub-\nrier airport,\" as used in our proposed\nMr. LAUSCHE. And what is the tax\ncommittee and the full committee.\nlegislation, means any air traffic hub or\nthat would be imposed upon the cost of\nnonhub receiving scheduled service by\nI have confidence that there will\nthe ticket?\nan air carrier or air carriers certificated\nemerge from the subcommittee chaired\nMr. RANDOLPH. Two percent on\nby the Civil Aeronautics Board. The term\nby the able Senator from Oklahoma [Mr.\ndomestic passenger tickets and $2 per\ndoes not contemplate or imply segrega-\nMONRONEY] and the parent Commerce\npassenger on foreign air transportation\ntion of any public use. Federal-aided\nCommittee headed by the distinguished\nat airports where the passenger would\nairport for air carrier utilization only.\nsenior Senator from Washington [Mr.\noriginate his trip in the United States.\nMr. President, I do not believe in total\nMAGNUSON] a comprehensive legislative\nMr. LAUSCHE. I assume that the\nreliance on annual appropriations from\nsolution to the serious airports and air-\nSenator anticipates that the future will\nthe Treasury general fund for Federal\nways system problems.\ndemand larger airports and more air-\naid to airport development, other than\nMr. President, I ask unanimous con-\nports, and that instead of paying for\nfor the small so-called community eco-\nsent to have printed in the RECORD at\ntheir construction out of the general\nnomic development airfields. And, cer-\nthis point a brief outline of the provisions\nfund, the users of the airports should\ntainly, I am opposed to levying new\nof the proposed Federal Airport Devel-\nshare the major part of the cost.\naviation user taxes predicated on their\nopment Act of 1968, introduced today.\nMr. RANDOLPH. The Senator from\nuse for airports and airways develop-\nThere being no objection, the outline\nOhio is correct.\nment purposes, only to have them com-\nwas ordered to be printed in the RECORD,\nIn the earlier days of our highway pro-\nmingled in the Treasury general funds.\nas follows:\ngram in this country, we had no trust\nJune 13, 1968\nCONGRESSIONAL RECORD\nS7151\nfund. We came, of course, to 1956, when\nful purposes. Conceivably an individual\nBoyd to the Vice President transmitting\nwe needed an interstate system, and we\ncould even acquire a nuclear weapon\nthis proposed bill, together with a sec-\nwent to the trust fund for our road de-\nunder SO broad a provision.\ntion-by-section analysis of the provisions\nvelopment.\nMr. President, I fail to see any con-\ncontained in the bill.\nThe same situation now exists with re-\nvincing reason for permitting the sale of\nThe ACTING PRESIDENT pro tem-\nspect to airports. Our airports are inade-\nsuch weapons to private parties.\npore. The bill will be received and ap-\nquate and antiquated, and we need a very\nDestructive devices have no reasonable\npropriately referred; and, without ob-\ndynamic program; and I believe the users\nuse for sport or recreation. They are en-\njection, the letter and section-by-section\nshould pay the major portion of it.\ntirely inappropriate to household protec-\nanalysis will be printed in the RECORD.\nMr. LAUSCHE. Will the Senator al-\ntion. They should simply be removed from\nThe bill (S. 3645) to authorize the Sec-\nlow me to become a cosponsor of the\nthe market. Therefore, in anticipation\nretary of Transportation to plan and\nmeasure?\nthat the recently passed title IV will be-\nprovide financial assistance for airport\nMr. RANDOLPH. I am gratified to\ncome law, I introduce again today a bill\ndevelopment, and other purposes, intro-\nhave the cosponsorship of the Senator\nto prohibit the sale of destructive devices\nduced by Mr. MONRONEY, by request, was\nfrom Ohio.\nto individuals. I hope and believe that\nreceived, read twice by its title, and\nThe ACTING PRESIDENT pro tem-\nwhen the Senate has had a fuller oppor-\nreferred to the Committee on Commerce.\npore. The bill will be received and ap-\ntunity to consider the merits of this pro-\nThe letter and section-by-section\npropriately referred.\nposal it will receive the strong endorse-\nanalysis, presented by Mr. MONRONEY,\nThe bill (S. 3641) to provide additional\nment of this body and the House of\nare as follows:\nFederal assistance in connection with the\nRepresentatives.\nTHE SECRETARY OF TRANSPORTATION,\nconstruction, alteration, or improvement\nI sent the bill to the desk and ask that\nWashington, D.C.\nof air carrier and general purpose air-\nit be printed in full at this point in the\nHon. HUBERT H. HUMPHREY,\nports, airport terminals, and related fac-\nRECORD.\nPresident of the Senate,\nilities, and for other purposes, introduced\nWashington, D.C.\nThe PRESIDING OFFICER. The bill\nDEAR MR. PRESIDENT: There is transmitted\nby Mr. RANDOLPH (for himself and other\nwill be received and appropriately re-\nherewith a proposed bill \"To authorize the\nSenators), was received, read twice by\nferred; and, without objection, the bill\nSecretary of Transportation to plan and pro-\nits title, and referred to the Committee\nwill be printed in the RECORD.\nvide financial assistance for airport develop-\non Commerce.\nThe bill (S. 3643) to amend title 18,\nment, and other purposes\", together with a\nUnited States Code, to prohibit the sale\nsection-by-section analysis.\nThis proposed bill would chart a new\nS. 3643-INTRODUCTION OF BILL\nand delivery of destructive devices,\ncourse for Federal assistance to airport de-\nTO PROHIBIT THE SALE AND\nmachineguns, short-barreled shotguns,\nvelopment. It would authorize direct loans\nDELIVERY OF DESTRUCTIVE DE-\nand short-barreled rifles, introduced by\nfor development of airports which are po-\nVICES, MACHINEGUNS, SHORT-\nMr. BROOKE, for himself and Mr. HART,\ntentially viable but for which loans in the\nBARRELED\nSHOTGUNS,\nAND\nwas received, read twice by its title, re-\nprivate market cannot be obtained on reason-\nSHORT-BARRELED RIFLES\nferred to the Committee on the Judici-\nable terms. The loans outstanding at any one\nary, and ordered to be printed in the\ntime would be limited to $1,000,000,000.\nMr. BROOKE. Mr. President, yester-\nTo assist development of airports served\nRECORD.\nday I introduced a bill to provide for na-\nby local service carriers receiving operating\nS. 3643\ntional registration of firearms. The\nsubsidy from the Civil Aeronautics Board,\nBe it enacted by the Senate and House of\nthe bill would authorize grants up to 50 per-\nmeasure was designed to supplement and\nRepresentatives of the United States of\ncent of the cost of projects attributable to\nstrengthen both our existing gun control\nAmerica in Congress assembled, That the\nservice by the subsidized carrier. As a condi-\nlaws and the recently passed legislation\nCongress hereby finds that destructive de-\ntion to a grant, the Secretary would have to\nawaiting the signature of the President,\nvices (as defined in title 18, United States\nfind, after consultation with the Board, that\nas well as the additional legislation I hope\nCode), machineguns, short-barreled shot-\nthe cost of the project did not exceed the\nwe will soon approve.\nguns, and short-barreled riffes are primarily\nvalue of the service to be provided.\nWith the same sense of urgency, I rise\nweapons of war which have no appropriate\nAll of the proposed Federal assistance\nuse as instruments of sport, recreation or\ntoday to offer on behalf of myself and\nwould be available only for development\npersonal defense; that intrastate commerce\nSenator HART a bill to prohibit the sale\nprojects related to landing areas and safety\nin such devices and weapons affects the flow\nfacilities. It would not be available for ter-\nto private parties of destructive devices,\nof interstate and foreign commerce in such\nminal, hangar, parking, and other passenger\nmachineguns, short-barreled shotguns,\ndevices and weapons; and that therefore it\nservice or industrial purposes.\nand short-barreled rifles. There is no\nis necessary to regulate all commerce in such\nThe bill would require the Secretary to pre-\nconceivable reason why such weapons\ndevices and weapons.\npare, within two years, and revise at least\nshould be sold to private parties. Destruc-\nSEC. 2. (a) section 922(b) (4) of title 18,\nevery two years thereafter, a plan for the Na-\ntive devices have been defined to include\nUnted States Code, is amended to read as\ntional Airport System. The plan must set\nfollows:\n\"any explosive, incendiary, or poison gas\nforth for at least a ten-year period the type\n\"(4) to any person any destructive device,\nbombs, grenade, mine, rocket, or similar\nand estimated cost of all airport development\nmachinegun (as defined in section 5848 of\ndevice; and any type of weapon which\nrequired to meet the needs for airport facil-\nthe Internal Revenue Code of 1954), short-\nities in locations served by air carriers, for\nwill or is designed to or may readily be\nbarreled shotgun, or short-barreled rifle.\"\nthe national defense and postal service, and\nconverted to expel a projectile by the ac-\n(b) Section 922(b) of such title is amend-\nfor the economic development objectives of\ntion of any explosive and having any\ned by adding at the end thereof the follow-\nthe States and their subdivisions.\nbarrel with a bore of one-half inch or\ning new sentence: \"Paragraph (4) of this\nThe growth in aviation activity, both air\nmore in diameter.\" They are obviously\nsubsection shall not apply to any research\ncarrier and general aviation, will continue\norganization designated by the Secretary.\"\nweapons of war, not suitable for personal\nto create a demand for expanded -airport\nSEC. 3. The amendments made by this Act\nfacilities. The Federal Government has a\nuse.\nshall become effective 30 days after the date\nAt the present time, weapons of this\nsubstantial interest in the orderly develop-\nof its enactment.\nment of our Nation's airports, but this Fed-\ndescription can be purchased by a private\neral interest should not be considered over-\ncitizen with no significant controls what-\nriding. Our civil airports are owned and\nsoever, and with no effective provision\nS. 3645-INTRODUCTION OF BILL TO\noperated by State and local governments or\nthat the purchase be reported to the ap-\nBE KNOWN AS THE AIRPORT DE-\nby private individuals. They are used by pri-\npropriate law-enforcement officers.\nVELOPMENT ACT OF 1968-NOTICE\nvately-owned common carriers, by private\nThe omnibus crime control bill, which\nOF HEARINGS\ncorporations, and by private individuals.\nThey are financed largely by these users and\nwas recently considered by this body and\nMr. MONRONEY. Mr. President, I\nby the communities served. The interests and\nwhich is now awaiting the President's\nintroduce, by request and for appropriate\nresponsibilities of these groups must be\nsignature, provides that destructive de-\nreference, a bill to authorize the Secre-\nrecognized in our policies and our planning.\nvices can be sold to anyone who obtains\ntary of Transportation to plan and pro-\nThe aviation industry has reached a new\na sworn statement from his local law-\nvide financial assistance for airport de-\nstage of maturity. The evidence is clear that\nenforcement officer that there is no law\nvelopment and other purposes. I ask\nFederal grant assistance is no longer re-\nagainst his possession of such weapons,\nunanimous consent that there be printed\nquired at most airports. With few excep-\nand that there is no reason to believe\ntions, the direct users of an airport are finan-\nin the RECORD at this point a letter from\ncially capable of bearing the full costs of\nthat the weapon will be used for unlaw-\nSecretary of Transportation Alan S.\ndevelopment and operation. Certainly, the\nS7152\nCONGRESSIONAL RECORD SENATE\nJune 13, 1968\nunsubsidized airlines are capable as a regu-\ntein which extends for at least ten years; in-\nauthority, because the authorizing pro-\nlated industry, of bearing the full costs of\ncludes all types of development required for\ntheir operations. Today, less than 2 per-\nvisions contained the geographical de-\ncargo, passenger, and aircraft handling; and\ncent of the expenses of the scheduled airlines\ncovers all airport development needed in lo-\nscription of \"a Territory or possession of\nare attributable to airport landing fees.\ncations served by air carriers, for the special\nthe United States,\" and, therefore, ex-\nVery few general aviation airports charge\nneeds of national defense and the postal\ncluded Alaska and Hawaii when they\nany landing fee at all. The impact of a\nservice, and to carry out the economic de-\nbecame States. The purpose of this pro-\ninodest fee sufficient to develop and support\nvelopment objectives of State and local gov-\nposed legislation is to restore applicabil-\nthese airports would be negligible in most\nernments.\nity to employees dying in those two\ncases.\nSection 7. Separate Fund. This section es-\nStates.\nA reasonable system of charges should pro-\ntablishes a separate fund in the Treasury for\nI ask unanimous consent that the let-\nvide communities sufficient revenues to at-\nthe purpose of financing the loan program\ntract private financing of needed airport de-\nauthorized by section 3. The initial capitali-\nter dated May 13, 1968, to the President\nvelopment. There are, however, special cases\nzation of the fund will be made by appropri-\nof the Senate from the Secretary of\nwhere Federal financial assistance must be\nations. The Federal National Mortgage As-\nTransportation be printed in the RECORD\ncontinued and the proposed bill would do\nsociation Charter Act is ainended to author-\nat this point, as a part of my remarks.\nthis.\nize the Secretary to establish trusts with the\nThe PRESIDING OFFICER. The bill\nThe Bureau of the Budget has advised\nFNMA for the resale of obligations acquired\nwill be received and appropriately re-\nthat enactment of this proposed legislation\nunder the loan program. All expenses associ-\nferred; and, without objection the letter\nwould be in accord with the President's\nated with the administration of section 3 will\nwill be printed in the RECORD.\nprogram.\nbe paid from the fund.\nSincerely,\nSection 8. Definitions. This section defines\nThe bill (S. 3648) to authorize the\nALAN S. BOYD.\nthe terms \"landing areas\", \"public agency\",\npayment of the expense of preparing\nand \"Secretary\" for the purpose of their\nand transporting to his home or place of\nSECTION-BY-SECTION ANALYSIS OF A BILL To\nuse in the Act.\ninterment the remains of a Federal em-\nAUTHORIZE THE SECRETARY OF TRANSPORTA-\nSection 9. Appropriations. This section au-\nployee who dies while performing official\nTION To PLAN AND PROVIDE FINANCIAL As-\nthorizes appropriations necessary to carry out\nduties in Alaska or Hawaii, and for other\nSISTANCE FOR AIRPORT DEVELOPMENT, AND\nthe Act.\npurposes introduced by Mr. GRUENING,\nOTHER PURPOSES\nSection 10. Effective Date. The Act is to be-\nSection 1. Short Title. This section cites\ncome effective July 1, 1969.\nwas received, read twice by its title and\nreferred to the Committee on Govern-\nthe Act as the \"Airport Development Act of\nMr. MONRONEY. Mr. President, the\nment Operations.\n1968\".\nbill would authorize direct loans for\nSection 2. Declaration of Purpose. This sec-\nThe letter, presented by Mr. GRUENING,\ntion sets forth the finding of Congress that,\nlanding area and safety facility develop-\nis as follows:\nwhile most airport development can be ac-\nment in an amount not to exceed $1 bil-\nTHE SECRETARY OF TRANSPORTATION,\ncomplished through private financing, there\nlion. In addition there would be author-\nWashington, D.C., May 13, 1968.\nis a need for more extensive planning for\nized $100 million for 50-percent match-\nHon. HUBERT H. HUMPHREY,\nfuture airport facilities and the provision of\ning grants at those airports served ex-\nPresident of the Senate,\nFederal financial assistance where private\nclusively by local service carriers.\nWashington, D.C.\ncapital is not available on reasonable terms.\nDEAR MR. PRESIDENT: Enclosed is a draft\nThe need for a new Federal airport as-\nSection 3. Airport Loans. This section au-\nof a bill \"To authorize the payment of the\nthorizes the Secretary to purchase securities\nsistance program is unquestioned and is\nexpenses of preparing and transporting to\nor make loans for projects for the construc-\namply documented not only by the Sec-\nhis home or place of interment the remains\ntion of landing areas and other facilities and\nretary's letter, but also by the interim\nof a Federal employee who dies while per-\ninterests in land necessary to the operation\nreport issued by the Aviation Subcom-\nforming official duties in Alaska or Hawaii,\nof aircraft. The loans are subject to certain\nmittee of the Committee on Commerce\nand for other purposes.\"\nfindings, the most important of which, is\nlast January. I introduce this bill SO that\nIt is recommended that it be enacted by\nthat the project cannot be financed on rea-\nit can be considered, along with other\nthe Congress.\nsonable terms without Federal assistance. It\nUp until the time that Alaska and Hawaii\nproposals for airport development dur-\nis contemplated that loans would be made for\nbecame States, the Act of July 8, 1940 (now\nall or part of the project costs, depending\ning the hearings I have scheduled for\ncodified in Title 5 of the United States Code\nupon whether private financing or grants\nTuesday, June 18.\nas section 5742) authorized payment of the\nwere available for any part of the costs. Se-\nexpenses of preparing and transporting to\ncurities purchased or loans made could not\nhis former home or place of interment the\nexceed 30 years maturity, and would bear in-\nS. 3648-INTRODUCTION OF BILL TO\nremains of a Federal employee who died\nterest at current Treasury rates. Total loans\nAUTHORIZE THE PAYMENT OF\nwhile performing official duties in Alaska\noutstanding could not exceed $1 billion.\nEXPENSES OF TRANSPORTING\nand Hawaii, and the expenses of transport-\nSection 4. Grants to Airports Served by\nBODIES OF FEDERAL EMPLOYEES\ning his family and household effects to his\nLocal Service Carriers. This section author-\nFROM ALASKA AND HAWAII TO\nformer home. However, the change in po-\nizes the Secretary to make grants for air-\nlitical status of Alaska and Hawaii from Ter-\nTHEIR FORMER HOMES\nport development at those airports at which\nritories to States had the effect of canceling\nthe only certificated service is provided by\nMr. GRUENING. Mr. President, I in-\nthe authority, because the authorizing pro-\nairlines receiving operating subsidy from the\ntroduce, for appropriate reference, a bill\nvisions contained the geographical descrip-\nCivil Aeronautics Board. Grants may be made\ntion of \"a Territory or possession of the\nto authorize the payment of the expenses\nonly for projects attributable to the opera-\nUnited States\", and, therefore, excluded\nof preparing and transporting to his\ntions of the certificated carrier, and only\nAlaska and Hawaii when they became States.\nhome or place of interment the remains\nwhere the Secretary finds, after consultation\nThe purpose of this proposal is to restore ap-\nwith the Board, that the cost of the project\nof a Federal employee who dies while\nplicability to employees dying in those two\ndoes no substantially exceed the value of\nperforming official duties in Alaska or\nStates.\nthe service to be provided by the carrier. The\nHawaii, and for other purposes.\nThe authority to pay a third category of\nFederal share may not exceed 50 percent of\nThis bill is introduced at the request\nexpenses, transportation of the remains of\nthe project cost. The total grant authoriza-\nof the Secretary of Transportation. The\ndependents of employees stationed in Alaska\ntion is $100 million. If the demand exceeds\nor Hawaii to their former home, was added to\nSecretary has indicated in his request\nfunds available, the Secretary must appor-\nthe 1940 Act by section 7(b) of the Act of\nto the President of the Senate that up\ntion funds, taking into consideration the\nJuly 15, 1954. This authority was not affected\nuntil the time that Alaska and Hawaii\nrelative effect of each project on the air\nwhen Alaska and Hawaii became States, be-\ntransportation service available to the locality\nbecame States, the act of July 8, 1940-\ncause the 1954 amendment contained the\nserved, and the need to develop a balanced\nnow codified in title 5 of the United\ngeographical description of \"a place outside\nairport system.\nStates Code at section 5742-authorized\nthe continental United States or in Alaska\".\nSection 5. Advances of Funds. This section\npayment of the expenses of preparing\nThus, since enactment of the Act of July 15,\nauthorizes the Secretary to advance funds\n1954, we have had the inconsistent situation\nand transporting to his former home or\nto an airport eligible for assistance under\nwhere the remains of a dependent of an em-\nplace of interment the remains of a Fed-\nployee stationed in Alaska or Hawaii can be\nsections 3 or 4 for the purpose of preparing\neral employee who died while performing\nplans and specifications, and taking other ac-\nreturned at Government expense, but the re-\nofficial duties in Alaska or Hawaii, and\nmains of the employee cannot be.\ntions preliminary to construction, including\nthe acquisition of land and interests therein.\nthe expenses of transporting his family\nThis bill is motivated by geography not\nSection 6. National Airport System Plan-\nand household effects to his former home.\npolitical status. It does not involve special\nning. This section directs the Secretary to\nHowever, the change in political status\nlegislative treatment for Alaska and Hawaii.\nof Alaska and Hawaii from territories to\nIt does involve recognition of geographical\nprepare, periodically revise, and report prog-\nfactors which the conferring of political\nress on a plan for the National Airport Sys-\nStates had the effect of canceling the\nstatus could not change and which pose\nTransportation\nI4520\nCONGRESSIONAL RECORD\nMARITIME June\ncal jackals smelling the blood of the old lion\n2. Informing one's self on issues and\nchairman, contends the latest report is-\nin the presidential palace.\ncandidates.\nsued by the Department of Agriculture\nThe union leaders, especially communists,\n3. Contributing to the party of your\nshows our farmers sinking further into\nstarted out after bread-and-butter issues\nchoice.\nwhile many young workers wanted a new\n4. Voting in political elections.\nthe economic quicksand with each pass-\nsociety. Now it appears the leaders have\nMoreover, employees are free to express\ning year. The April farm income situa-\nlearned from their troops and also seek to\ntheir opinions regardless of where they stand\ntion as published by the Economic Re-\noverthrow the government.\non political issues. In instances where an\nsearch Service of the Department shows\nemployee is asked to speak for the Corpora-\nspecifically farm production expenses on\ntion on a matter on which he personally\nthe increase. In fact the report tells us\nGENERAL ACCEPTANCE CORP.\nholds views contrary to the company posi-\nthat farm production expenses this year\nAND GOVERNMENT\ntion, he is free to decline to speak.\nThe Corporation believes that if all em-\nmay run up to $11/2 billion higher than\n(Mr. ROONEY of Pennsylvania asked\nployees inform themselves of the major pub-\nlast year's Agriculture Department esti-\nand was given permission to address the\nlic issues and problems at the National,\nmate. This only reflects the effect of in-\nHouse for 1 minute and to revise and ex-\nState, and local levels, they will be able to\ncreasing inflation on the American\ntend his remarks and include extraneous\nparticipate more effectively as individuals\nfarmer.\nmatter.)\nin civic, business and political affairs.\nPER ACRE STATISTICS ALARMING\nMr. ROONEY of Pennsylvania. Mr.\nSTATEMENT OF S. H. WILLS, PRESIDENT AND\nThe task force was particularly\nSpeaker, ever since I first entered public\nCHAIRMAN OF THE BOARD\nalarmed at the rise in capital expendi-\nlife I have tried to encourage maximum\nThere has long been a need for business\ntures, taxes and interest payments as\nparticipation in the many facets of pub-\npeople to speak out and act in support of\ncalculated by the Department on a per-\nlic policymaking from the private costors\ntheir convictions. By the same token, sound\nacre basis. Capital expenditures, includ-\nof our Nation.\nbusiness policies for this Corporation can\ning farm buildings, vehicles and other\nTt is my conviction every franchised\nbe developed only with a full understanding\nmachinery and equipment, have risen 55\ncitizen should exercise his voice and his\nof the influence that various other interests\npercent since 1960, according to the re-\nvote in the best interests of his Nation,\nexert at the Federal, State, and local levels.\nport. This same situation report shows\nhis State, his community, and himself.\nWith these realities in mind, we recognize\nNot only does he have the right to be\none of the basic requirements of a true\nthat taxes payable per acre also rose 110\ndemocracy is that all of its components be\npercent during the same period. Com-\nheard in the affairs of the public, but\narticulate in their own best interests, con-\npare such increases with the much\nalso he has a very definite responsibility\nsistent with the best interests of our society\nsmaller 5.7 percent increase in the per\nto participate.\nas a whole.\nacre index on prices received for all com-\nIn the past, I have observed with dis-\nTherefore, with a strong desire for GAC\nmodities as reported in USDA's agricul-\ntubing regularity efforts by some em-\nto portray a positive business image, dedi-\nture statistics publication, and you can\nployers in the private sector to discour-\ncated to fostering the principles of the free\nage their employees from engaging in\nenterprise system and Constitutional gov-\nreadily understand why our farmers feel\nernment. the Corporation intends to partici-\nthe ever-increasing pressures of the cur-\ncommunity, civic, or governmental af-\npate actively in significant public relations\nrent pinch. There is a limit on how much\nfairs. Whenever possible, I have urged\nand civic affairs programs. The Corporation\na farmer can squeeze out of an acre of\nreevaluation of such policies because\nhas an obligation to respond to unfavorable\nland in income, but there seems to be no\nthey are totally inconsistent with the\nand unsound political, social, and economic\nlimit on where his per-acre expenses can\nbasic principles of our democratic so-\nstimuli on behalf of its owner-shareholders,\ngo under current administration policies.\nciety.\nits employees, its customers and its\nThis week, a statement of policy is-\nneighbors.\nIt is evident that the policies developed\nsued by the General Acceptance Corp.,\nIn the following policy statement we urge\nduring the past 7 years in Washington\nbased in my congressional district, came\neach employee, as a private citizen, to as-\nneed a transfusion of new ideas that will\nsume this essential role, as GAC intends as a\nbe responsive to the economic needs of\nto my attention. Because it is an extraor-\ncorporate citizen.\nour farmers and rural America. We must\ndinarily positive policy which recog-\nnizes fully the importance of responsible\nnot forget these polices led to a drop of\n$1.9 billion in realized net farm income\ncitizen participaton in public affairs, I\n(Mr. SIKES asked and was given per-\nam pleased to be able to bring this policy\nthis past year and threatens to perpet-\nmission to extend his remarks at this\nuate the condition.\nto the attention of my colleagues.\npoint in the RECORD and to include ex-\nIt includes both a statement of GAC's\ntraneous matter.)\nWe need a change in Washington that\nwill result in the immediate reversal of\nresolve to fulfill its role as a corporate\n[Mr. SIKES' remarks will appear here-\ncitizen, by Mr. S. H. Wills, president and\nthese deplorable conditions and I would\nafter in the Extensions of Remarks.]\nchairman of the board, and a policy\nbe less than candid to suggest any other\nstatement encouraging employee ac-\ncourse than to get to the root of the\ntivity:\nproblem by changing the leadership that\n(Mr. EDMONDSON asked and was\nPUBLIC RELATIONS POLICY\nhas brought rural America so far down\ngiven permission to extend his remarks\nThe lives and future welfare of GAC em-\nthe road to ruin.\nat this point in the RECORD and to in-\nployees and their families have been and\nclude extraneous matter.)\nwill continue to be greatly influenced by\npublic affairs. Public policy as developed by\n[Mr. EDMONDSON'S remarks will ap-\nLOTS OF LUCK\ncommunity, civic and governmental activi-\npear hereafter in the Extensions of Re-\nMAILLIARD asked an was\nties covers a wide area, bearing directly on\nmarks.]\nthe future status of free competitive enter-\ngiven permission to extend his remarks\nprise in this complex society. If we are to\nat this point in the RECORD and to in-\nhave a voice in the formation of that policy,\n(Mr. EDMONDSON asked and was\nclude extraneous matter.)\nwe must take an active interest.\ngiven permission to extend his remarks\nMr. MAILLIARD. Mr. Speaker, on\nThe employees of the GAC Corporation\nat this point in the RECORD and to in-\nMay 22-National Maritime Day, 1968-\nand its subsidiaries should express informed\nclude extraneous matter.)\nthe distinguished chairman of our Com-\ninterest and actively participate in public\naffairs. In doing so, they will assist in ful-\n[Mr. EDMONDSON'S remarks will ap-\nmittee on Merchant Marine and Fish-\nfilling the objectives of keeping our Nation\npear hereafter in the Extensions of Re-\neries wrote to the President pointing up\nstrong and our social and our economic in-\nmarks.]\nthe needs of the American maritime in-\nstitutions viable. GAC employees are urged\ndustry and concluding that only he, the\nto seek out those cultural, governmental, or\nPresident of the United States, could\ncommunity service activities suited to their\nNEW STATISTICS SHOW FARMER\nright the neglect and wrong our Mer-\nparticular talents, interests, and preferences.\nSINKING FURTHER INTO ECO-\nchant Marine has felt for so many years.\nIn addition, the Corporation encourages\nNOMIC QUICKSAND\nTo the gentleman from Maryland, I\nall employees to support the political parties\n(Mr. LANGEN asked and was given\nsay, \"Lots of luck.\" Two years ago on a\nof their choice with their time and talents\npermission to extend his remarks at this\nsimilar occasion-National Maritime\nand whenever possible, to take an active part\nin the bi-partisan processes of government\npoint in the RECORD and to include ex-\nDay, 1966-I addressed an open letter\nin the communities where they live. This\ntraneous matter.)\nto the President, expressing a similar\nshould include:\nMr. LANGEN. Mr. Speaker, the House\nalarm over the deterioration of our mari-\n1. Registering with a lawful political\nRepublican Agriculture Task Force, of\ntime posture and suggesting certain\nparty.\nwhich I have the privilege of being\nareas for immediate action. Unfortu-\nJune 4, 1968\nCONGRESSIONAL RECORD - HOUSE\n4521\nnately, my expression of concern appar-\npresent decrepit state. You recognized mari-\nmay be taken to revitalize the industry. With\nently fell upon deaf ears. For the sake of\ntime industry's vital trade and defense role\nmore than 80% of our present merchant fleet\nthe American Merchant Marine, I only\nwhich will continue to be demanded of it\nreaching the end of its economic life within\nand which demands it has always met in the\nhope my colleague fares better than I.\nthe next five years, we can no longer afford\npast.\nfurther pursuit of this dilatory and most un-\nThe full text of my open letter to\nThat need continues at this very moment\nprofitable course.\nL. B. J. on Maritime Day, 1966 and the\nbut no progress is as yet in sight. Instead,\n\"We had hoped that the 'new' maritime\nletter of the chairman of our Merchant\nwe are treated to a few examples of lack of\npolicy which you promised in your State of\nMarine and Fisheries Committee to the\nconcern-perhaps even worse.\nthe Union Message in January 1965 would\nPresident follows:\nIn these critical times, it is essential that\nresolve this conflict. However, more than six-\nCOMMITTEE ON\npositive and constructive declarations on our\nteen months have now elapsed, and we still\nMERCHANT MARINE AND FISHERIES,\nmerchant marine come from you as our na-\nhave no new maritime policy. Instead, we\nWashington, D.C., May 22, 1968.\ntional leader. This is a pressing need. We in\nhave two additional and conflicting reports\nThe PRESIDENT,\nCongress can then seek to legislate your\non what should be done. We have received\nmaritime wishes. We must not, however, be\nThe White House,\nalso a bill to create a new Department of\nWashington, D.C.\nplaced in a position of being both slighted\nTransportation, in which the Maritime Ad-\nDEAR MR. PRESIDENT: Only as a last resort\nand ignored. The Administration's spokesman\nministration will be submerged much in the\nat the departmental level must not be the\ndo I write you, knowing full well your pre-\nsame manner it now is within the Depart-\nhead of an agency who has been denied this\nment of Commerce. None of these events has\noccupation with many vital matters of na-\nauthority by the Congress itself.\ntional concern. Few can appreciate more\nserved to abate the conflict. Rather they have\nHopefully, it is not already too late, but I\nthan you the responsibilities of the Congress\nserved to increase its severity, raising fur-\nin effectuating and/or initiating programs\nfear only you can right the neglect and wrong\nther doubt over the role of the government\nour merchant marine has felt for too many\nin maritime affairs and the future course of\nand policies of our government. Certainly, I\ncannot add to your knowledge anything on\nyears.\nthe American Merchant Marine.\nSincerely,\n\"So confused has this matter become that\nthe essentiality of creating ocoperative atti-\nEDWARD A. GARMATZ,\ntudes and relationship. between the White\ntoday we are unable even to get agreement\nChairman.\nHouse and the Congress.\non the existing condition of the merchant\nIn recent days, I personally, as Chairman\nmarine, much less on a new policy. We have,\nAN OPEN LETTER TO L. B. J. ON MARITIME DAY\nof the House Committee on Merchant Marine\nfor example, the Maritime Administrator\nand Fisheries, and my colleagues, have been\nFor more than a year now, I have been\nstating that, and I quote: 'Our present fleet\nprodding agencies of the Executive, attempt-\nis, for the most part, physically obsolete.'\ntreated to a rare indignity which we col-\nlectively feel hs been most offensive.\ning to stir them into taking constructive ac-\nThe Deputy Maritime Administrator states,\ntion on the problems of the American Mer-\nand I quote: I, for one, fail to find that\nOn April 23, 1968, our Committee com-\nmenced hearings on legislation to formulate,\nchant Marine. I have made public speeches.\nour merchant marine is in a disastrous situ-\nI have spoken on the floor of the House. I\nation.' Finally, we have the Secretary of\nmodify and improve our merchant marine\nthrough a national policy. We recognized\nhave appeared before Congressional Commit-\nDefense, to whom a considerable amount of\ntees. I have communicated with the Mari-\nresponsibility for the industry appears to\nthat it was impossible to delay much longer\ninitiating mechanisms to rectify the many\ntime Administrator, the Under-Secretary of\nhave been abdicated contrary to existing law,\nCommerce for Transportation, the Secretary\nstating that the American Merchant Marine\nthings wrong with our maritime industry.\nWe invited the Secretary of Commerce, in\nof Commerce, various members of the De-\nis 'adequate.' Yet high-ranking professional\nwhose department the Maritime Administra-\npartment of Defense, and yes, even the Sec-\nNaval officers frequently have stated that it\ntion operates, to appear. In response, I was\nretary of Defense himself. I stand before you.\nis not adequate.\nthis evening, feeling like a 20th Century Paul\n\"Mr. President, this current confusion is\nadvised that all transportation functions\nRevere whose cries of alarm have fallen upon\nsimply a manifestation of my worst fears\nwere placed by you in charge of the Secre-\ndeaf ears.\nentertained in 1961 when the Maritime Ad-\ntary of Transportation. This, in spite of the\nfact that the Congress in approving the crea-\nLet us not, therefore, delude ourselves any\nministration was placed within the Depart-\nment of Coinmerce. In a word. we are bank-\ntion of the Department of Transportation,\nfurther. You know and I know there is but\nspecifically excluded from that department\none man today who can remedy the current\nrupt-bankrupt in federal maritime leader-\nmaritime functions.\ninadequacies of the government's role in\nship; and because of it we find ourselves in\nMoreover, this year the House agreed to\nmaritime affairs. That one man is the Presi-\nthis present deplorable state of affairs. Only\ndent of the United States. For no matter how\nyou, Mr. President, can bring some sem-\nestablish an independent Maritime Admin-\nblance of order out of this chaos.\nistration outside of any specific established\narduously Congress may labor to bring about\ngovernment department.\na constructive maritime program, success or\n\"I respectfully suggest that there are\nFor the Secretary of Commerce, with mari-\nfailure is wholly dependent upon Executive\nanswers to the current problems facing the\nAmerican Merchant Marine. The situation is\ntime authority under him, to decline our in-\nimplementation. Therefore, this evening I\nnot incapable of solution, but we must get\nvitation and, in fact, delegate it to the Sec-\nwill make my presentation to you in the\nretary of Transportation who has been denied\nform of an open letter to the President of\non with a realistic ship construction pro-\nsuch custody, creates confusion for all of us\nthe United States.\ngram.\n\"In your proclamation setting aside this\nand, even worse, denotes a total rejection of\n\"DEAR MR. PRESIDENT: It seems appropriate\nday as National Maritime Day, you stated\nthe expressed will of Congress.\nthat, since you have set aside this day, May\nthat, and I quote: we will continue to\nWe all realize that our merchant marine\n23, 1966, for the 34th annual celebration of\nneed ships-fast, modern descendants of the\nprogram is largely contingent upon the scope\nNational Maritime Day, I should address you\nfamous \"Clippers\"-to carry our products to\nof Federal appropriations therefor. While we\non this occasion, expressing my sincere and\nthe far corners of the earth.' I fear that\nare in the midst of prolonged and basic hear-\nprefound personal concern over the ever-\nunder existing conditions these ships will\nings on this vital subject, we were kept un-\ndeepening crisis developing in the American\nnever be constructed. The subsidized ship\naware of the Administration's thinking on\nMerchant Marine. I unfortunately find little\nreplacement program today is more than 90\nthe amount of appropriations that might\ncause for celebration on this festive occasion,\nships behind schedule. Yet the Congress has\nbe requested in the future. Instead, we\nsince it is my personal belief as a private\nbefore it your budget request for fiscal year\nlearned of the Administration's point of view\ncitizen, as a Naval officer, and as a Member\n1967, which will allow the construction of\nin this regard from the public press on May 9.\nof Congress that, because of the present atti-\nonly 9 to 11 ships. I respectfully suggest\nOn that day, the Baltimore Sun reported, and\ntude of the federal government, the American\nthat this level of federal expenditures for\nSecretary Boyd has confirmed the reliability\nmerchant marine today is being steered along\nship construction is totally inadequate. We\nof that report, to the effect that if the Ad-\na course to disaster. If we hope to preserve\nare, for example, scrapping ships from our\nministration is required to seek reductions\nthe American merchant marine as a useful\nNational Defense Reserve Fleet at ten times\nin Federal expenditures, one of the vehicles\nand effective national asset, we must come to\nthe rate of construction provided for under\nchosen would in effect decimate even the very\ngrips with its problems without further de-\nthis current request.\nlimited appropriations earlier requested.\nlay. Conditions have been allowed. to dete-\n\"I believe you will find upon examination\nThis, Mr. President, is the equivalent of\nriorate to such an extent that now, Mr. Pres-\nof budget requests over the last several years\nending new merchant construction for at\nident, you and you alone can rescue the\nthat the allocation of our national resources\nleast a full year, perhaps longer. This step\nAmerican Merchant Marine from the arena\nto maritime affairs is becoming progres-\nwas apparently taken within the Adminis-\nof endless academic debate.\nsively smaller, while the problems of the in-\ntration without prior consultation with re-\n\"We have endured patiently at least five\ndustry are getting progressively larger and\nsponsible Congressional leaders of your own\nyears of extensive study of the ills of the\nlarger. Even compared with last year's in-\nParty. You can, I am sure, appreciate my\nAmerican Merchant Marine by various groups\nadequate federal budget for ship construc-\nshock, not only at the substantive sugges-\nsponsored by the Executive. Each group has\ntion, this year's request represents a sub-\ntion but at being advised thereof by the\npublished its respective recommendations.\nstantial reduction, a cut of about one-third\npress.\nNone have been disposed of, either through\nin both dollars and numbers of ships. It is\nLast fall, Mr. President, you indicated to\nCongressional or Administrative action. To\none-half the amount of federal funds re-\nme and others of the House and Senate your\nthe contrary, each and every study has served\nquested for ship construction in fiscal 1959\ndesire to move forward with an improved\nonly to provide additional material for de-\nat a time when the total federal budget was\nmodernized merchant marine in light of its\nbate over alternative courses of action which\nonly about 60% of that being requested\nTransportation\nJune 4, 1968\nTO:\nMR. LON WOODBURY\nFROM: ERNEST J. CORRADO, LEGISLATIVE ASSISTANT,\nAMERICAN MERCHANT MARINE INSTITUTE, INC.\nSUBJECT: REASONS FOR MR. NIXON'S SUPPORT OF A\nPOSITIVE AND CREATIVE MARITIME POLICY\nAND PROGRAM\nI. Because such a policy and program are in the national interest\nA. Our merchant fleet is declining both in quality and\nquantity.\n1. We have declined from first to sixth place in\nfleet size, and from first to sixteenth in ship-\nbuilding output.\n2. Of the 965 (as against 1300 fifteen years ago)\nprivately-owned vessels in the fleet today, 682,\nor about 70%, are 20 years old or older. Even the\nsubsidized operators currently have 158 vessels,\nor 49% of their fleet in the over-age category.\n3. On the other hand, 80% of the ships in the Russian fleet\nare less than 10 years of age.\n4. Russia will become a dominant maritime power by\n1970. She is producing approximately 125 ships per\nyear or one million deadweight tons. By the end of\n1970 she will have a fleet of some 15 million dead-\nweight tons.\n5. Russia had 556 large me rchant vessels under construction\nin 1966 totaling 4.5 million deadweight tons.\n6. In 1965 she spent over $600 million for construction\nof merchant ships while the United States spent under\n$150 million.\n7. Deliveries of new ships are running about 8 to 1 in\nRussia's favor. Ships under construction are running\n11 to 1 in tonnage.\nMr. Lon Woodbury - 2.\n8. Over the past 16 year period Russia gained approximately\n1,000 in total number of ships, while the United States\ndecreased by 900 ships.\n9. She transports 75 percent of her own foreign commerce\nin Russian bottoms while the United States carries\nonly 5.7 percent in U.S. flag merchant ships.\n10. The Russian shipbuilding program expends between\n$600 million to $700 million annually against\napproximately $100 million in the United States.\n11. The real danger in this Russian fleet build-up will\nbe their capacity to disrupt and control international\ntrade.\nB. In spite of its deterioration, the American-flag merchant\nfleet contributes significantly to the nation's commerce\nand is the fourth arm of defense.\n1. The private fleet's value to the military and its performance\nin World Wars I and II, Korea, and Vietnam are well\nknown.\n2. Despite the statements of Secretary of Defense\nMcNamara in 1962 to the effect that almost all military\npersonnel would be in the future transported by air,\nthe merchant fleet with its overage ships has carried\napproximately 65% of the military personnel and 96%\nof the materiel to Vietnam.\n3. The American-flag merchant fleet contributes approximately\n$900 million annually toward the improvement of our\nnational balance-of-payments account.\n4. This impressive contribution is amassed on the carriage\nof only about 5.7% of our trade in American bottoms.\n5. If the American-flag fleet were to carry about 30%\nof our foreign trade there would not be any balance-\nof-payments problem.\nII. There is great potential political benefit to be gained from such\nsupport.\nA. The large number of voters involved.\nMr. Lon Woodbury - 3.\n1. The SIU (AFL-CIO Maritime Trade Department)\nhas a six million man membership.\n2. The NMU (AFL-CIO Maritime Committee - NMEBA,\nARA, ILA, MM&P, I.U. of Marine and Shipbuilding\nWorkers) numbers about 350-400 thousand voters.\n3. Numerous other unionized employees connected with\nsupplying components to ships such as the steel\nworkers, the iron workers and the electricians.\n4. The large numbers of employees connected with the\nmanagement side of the maritime industry.\nB. Considerable industry political activity on Capitol Hill\nand elsewhere,\n1. Paul Hall's Maritime Trades Department is a powerful\nlobby. Apparently they delivered the deciding vote to\nbreak the Senate filibuster on P.L. 90-284, the Civil\nRights Act.\n2. These unions mentioned above make heavy political\ncontributions.\nIII. The maritime industry is particularly susceptible at this time\nto a change.\n1. The Administration promised a new maritime program\nin the 1965 State of the Union Message.\n2. For three years the Administration reneged on this\npromise.\n3. The antagonism between the industry and Secretary of\nTransportation Boyd.\n4. The Administration's long-awaited Maritime Program\npresented by Secretary Boyd on May 20, 1968, which\nis completely unacceptable to the industry.\n5. Congressman Gerald Ford's suggestion at a Maritime Trades\nDepartment luncheon in December 1967 to the effect that if\nthe Republicans win in November 1968 the maritime industry\ncan expect better things.\nMr. Lon Woodbury - 4.\n6. Congressman Pelly's (R-Calif) recent statement that the Republican\nPlatform would have a plank devoted to an improved maritime\npolicy and program.\n7. The Democrats are particularly vulnerable on this issue.\n8. It is inconceivable that the Government, in the last analysis,\nwill allow the American merchant fleet to disappear. Thus,\nMr. Nixon may as well get the credit for its salvation."
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