Funds escrowed in connection with Neighborhood Development conversions would be available to cities after January 1, 1972, if a city chooses to continue that program. However, outlays are to be deducted from the gross "hold harmless" amount, to avoid double funding.

What will happen to Urban Renewal commitments?

All metropolitan cities would get their formula share automatically. Cities could continue to receive disbursements from existing conventional urban renewal reservations. However, the Federal outlays would be deducted from the city's gross "hold harmless" amount to avoid double funding. The net "hold harmless" amount, if any, would then be paid out of the Urban Community Development Revenue Sharing funds.

What will happen to Model Cities programs?

It will be up to the local community to decide if its own Model Cities program meets its local needs, or if the money can be better spent locally on some other urban development program. Model Cities action-year contracts will continue to be approved as scheduled until January 1, 1972, and will continue in effect until the end of the contract year. After January 1, the contracts already approved would be funded from Urban Community Development Revenue Sharing to avoid double funding. Unused Model Cities appropriations would lapse on June 30, 1972. The Revenue Sharing "hold harmless" formula would include the Model Cities component (that is, the 12-month funding level) until conclusion of five-action-years for the particular city. When will cities receive their Urban Community Development Revenue Sharing funds?

The formula share would be distributed automatically, probably to be disbursed as quarterly drawdowns against a letter of credit. The net “hold harmless" amount (determined after subtracting total Federal outlays to the city under categorical grant programs) would be paid to the city at the end of the year.

Revenue sharing payments released would be distributed as Urban Community Development Revenue Sharing funds in the SMSA.

Mr. BARRETT. Thank you, Mr. Secretary, for a very fine statement. I will come back a little later and comment on your statement. But in order to give the members an opportunity to ask questions this morning I am going to forgo my questions. And before proceeding with questions I would like to inform the members that we will be proceeding under the 5-minute rule for the first round of questions. We will then come back and proceed under a 10-minute rule, giving everybody an opportunity to ask questions, and hoping that we can bring the Secretary back this afternoon if it is necessary.

Secretary ROMNEY. Mr. Chairman, not knowing what is going on this afternoon, I have a very important meeting at 4 o'clock. I am available up until 4 o'clock if that doesn't inconvenience the committee. I ought to attend that meeting, because it deals with a matter vitally affecting our Department's activities, and other departments; it is an interdepartmental meeting.

Mr. BARRETT. We will be very careful looking into your time schedule, Mr. Secretary. I want to inform you that after 3 o'clock we pay double time. And the economy can't stand double time, so we will have to let you out at an appropriate time. But we are hopeful that we can bring you back tomorrow morning if it is necessary. Secretary ROMNEY. I hope that isn't because you don't consider me worth double time.

Mr. BARRETT. Mr. Widnall.

Mr. WIDNALL. Thank you, Mr. Chairman.

Mr. Secretary, the community development special revenue-sharing proposal would include the type of activities which are now eligible under the 312 rehabilitation loan program. It would also end the separate fund which now exists for 312 rehabilitation loans. This program has been very successful throughout its history. I dislike seeing the activity in this program diminished. Do you expect that recipients of community development special revenue sharing will set up rehabilitation activities on their own? Wouldn't the administrative problems of each locality setting up a loan program be prohibitive.

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Secretary ROMNEY. I think they would set up such programs, Mr. Congressman, because I think they recognize the importance of these rehabilitation programs. I think there is a growing recognition throughout the country and in local communities of the importance of maintaining the existing housing stock, and therefore the importance of code enforcement and the importance of rehabilitation. The fact that abandonment is growing and spreading across the country is, I think, of concern to local officials. I do think in addition to continuing to make the funds available so that they can determine how much of the money they want to use for rehabilitation-because under the special revenue-sharing approach they would be free to use more money for rehabilitation if they feel that that is a more important priority than other uses but in addition to the special revenue-sharing program and the rehabilitation programs, I am convinced that we do need to improve home repair and modernization programs. And we are working on such recommendations, because I am greatly concerned about this deterioration in existing housing stock.

I admit that there is no way to say with absolute certainty whether the local officials would give equal attention. But I am inclined to think they would.