MAY 24, 1966.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

Mr. HAYS, from the Committee on Foreign Affairs, submitted the

following

REPORT

[To accompany H.R. 14019]

The Committee on Foreign Affairs, to whom was referred the bill (H.R. 14019) to amend the Foreign Service Buildings Act, 1926, to authorize additional appropriations, and for other purposes, having considered the same, report favorably thereon without amendment. and recommend that the bill do pass.

COMMITTEE ACTION

In the 1st session of the 89th Congress the Secretary of State sent to the Congress Executive Communication No. 1154, dated May 25, 1965, which included draft legislation for a 2-year program for the acquisition, development, and construction of buildings abroad for the Department of State, USIA, and Agriculture and Defense housing. The draft legislation was referred to the Subcommittee on State Department Organization and Foreign Operations of which Hon. Wayne L. Hays is chairman, on May 27, 1965. The subcommittee began its hearings in August 1965 and concluded consideration in February 1966 during which period they met in two open sessions and seven executive sessions. Witnesses from the Department of State included Hon. William J. Crockett, Deputy Under Secretary of State for Administration; Hon. James R. Johnstone, former Deputy Assistant Secretary for Foreign Buildings; Ralph Scarritt, Director, Foreign Buildings Office; Louis Del Favero, Assistant Director for Program Development, Foreign Buildings Office; as well as officers of the several geographic bureaus and of the U.S. Information Agency. Each of the projects proposed by the Department was examined by the subcommittee after which the subcommittee reported unanimously

on March 28, 1966, to the Committee on Foreign Affairs a bill that reduced the original executive request by $7,105,000. The full committee reported the bill unanimously to the House on May 24, 1966.

PRINCIPAL PURPOSE OF LEGISLATION

The principal purpose of H.R. 14019 is to authorize an appropriation of $27,610,000 for the purchase, construction, major alteration, and long-term leasing of buildings overseas that are necessary for the effective operation of the Department of State in its 275 posts. As justified by the executive, this sum will permit the Department to carry out a building program for the next 2 fiscal years. Included in this sum is $1,600,000 to permit the construction of a chancery in Saigon larger than that planned last year and for which the Congress authorized and appropriated $1 million. The enlarged structure will more adequately accommodate the enlarged staff now assigned to that post. The bill also authorizes the appropriation of $25,350,000 over the next 2 fiscal years for the operational activities of the building program such as maintenance, repair, and furnishings.

The bill amends existing law to allow the acquisition of property by exercise of options to purchase contained in short-term leases, applying to the purchase price all or part of the prepaid rents without reimbursement to the appropriation funding the rent payments. It also contains provisions relating to the disposal of property, the acceptance of settlements for damages to property of the Department abroad, and the acceptance of gifts of property.

The Office of Foreign Buildings of the Department of State administers the office requirements and some of the housing needs of other civilian Government agencies and military attachés abroad. Thus the sums contained in this bill are intended to meet the requirements of many agencies other than the Department of State. Specific sums are authorized separately for USIA and Defense and Agricultural attachés. Office space and living quarters are included for commercial, labor, science, mineral, and fisheries attachés and their staffs. Subject to the availability of Government-owned space, provision is made for office space for all other U.S. Government agencies represented abroad such as Veterans' Administration, Immigration and Naturalization Service, Customs, Federal Bureau of Investigation, General Accounting Office, and the American Battle Monuments Commission. Office space in Embassy buildings for key staff personnel of the Agency for International Development (AID) is also provided. Special requirements for office space and housing for AID personnel are included in AID's own program request.

OBJECTIVES OF THE BILL

In its consideration of the projects proposed by the executive branch the committee has been guided by the objectives it laid down in 1952. These are:

1. To provide representative consolidated office space for the Foreign Service and other agencies of the U.S. Government operating in cooperation with the Foreign Service except where leasing arrangements are more advantageous.

2. To assure through the consolidation, particularly of office facilities, a maximum degree of security with minimum expense to the Government.

3. To provide Government-owned furnished residences for all ambassadors and ministers.

4. To provide Government-owned furnished residences for officers in charge of consular posts and for senior officers at the principal diplomatic missions, including the attachés of the Defense Department and other agencies.

5. To provide Government-owned furnished quarters for a substantial part of the American staff at posts where special housing problems exist, such as health, security, long-term housing shortages, etc., where no practical alternative to Government housing can be found.

In this latter connection the committee has been consistently opposed to the trend toward the acquisition of apartments or compounds to meet housing needs. It rejected a number of proposed projects of this type. Admittedly there are special circumstances that make it desirable or necessary to concentrate U.S. Government personnel in a single building or in a compound. But the committee believes that individuals living as part of the local community, rather than apart from it, not only derive personal advantages but also convey a more favorable impression to the community.

BACKGROUND OF THE BILL

Since the passage of the Foreign Service Buildings Act in 1926, the Secretary of State has had the authority to acquire sites and buildings abroad for our diplomatic and consular establishments as well as for representatives of certain other Government agencies. When title to sites and buildings cannot be acquired by purchase, authority is granted to permit the acquisition of leaseholds of not less than 10 years. Leases for less than 10 years are authorized under Public Law 885, 84th Congress, and are funded under "Salaries and expenses" in the annual Department of State appropriation act.

In the interval between 1926 and 1947 the program was financed intermittently and modestly. Authorizations for appropriations totaled $16,625,000 while appropriations amounted to $11,625,000. Over a period of several years no appropriations were made. During the war years the program almost came to a halt with appropriations of slightly more than $2 million. In each of the years 1946 and 1947 $1 million was appropriated.

The termination of hostilities found the buildings program inadequate to meet the postwar requirements for facilities abroad. Personnel was increased to meet our expanded activities; missions that had been closed because of the war were reopened; and as new nations came into existence, new posts were created. A program commensurate with the demands would have required a heavy dollar outlay for the acquisition and construction of buildings.

The disposal of surplus war property and the postwar settlement of lend-lease accounts made available to the U.S. Treasury large amounts of foreign currencies and foreign credits, most of which could be used only in the country of origin. In 1946 Congress authorized the utilization of these foreign currencies and credits to finance the building program. This made possible the acquisition of valuable real property

holdings for office space and housing at the same time that it reduced dollar appropriations for rentals of office space and the payment of quarters allowances for housing.

The following table shows the authorizations and appropriations for the Foreign Buildings program since 1926.

Authorizations and appropriations for the Foreign Buildings program since the Foreign Service Buildings Act, 1926

Data are exact, since both authorizations and appropriations have been enacted in even thousands of dollars.

2 Transferred from "Government in occupied areas" pursuant to Public Law 83-207.

3 Of this amount, $1,000,000 was transferred from "Government in occupied areas" pursuant to Public I.aw 83-663.

4 For "Other purposes" of act only.

The Department has also had available to it for this program local currencies generated through the sale of surplus agricultural commodities under the terms of Public Law 480, 83d Congress. These local currencies are purchased from the U.S. Treasury with dollars derived from annual appropriations to the Department. Through fiscal year 1966 the appropriations amounted to $25,605,000.

The Department currently maintains 275 posts abroad. Under the Foreign Buildings program, the United States has long-term lease agreements or owns the following improved properties: 242 office buildings, 171 residences for ambassadors and other principal officers, 377 residences for other officers and attachés, 290 other single or duplex residential buildings, 260 apartment buildings with an aggregate of 1,967 apartments, and 151 other buildings such as warehouses and garages. The properties are capitalized at approximately $250 million and their current market value greatly exceeds this amount.

SUMMARY OF PROVISIONS OF THE BILL

Paragraph (2) of the first section of the bill authorizes an appropriation of an additional $1,600,000 for the enlargement of our office building that is now under construction in Saigon. Immediately after the leased office building in Saigon was bombed last March, Congress authorized and appropriated $1 million for the construction of a new building. The new structure capable of accommodating 75 individuals was to be a three-story stripped down adaptation of a six-story structure designed in 1960. In order to provide adequate and relatively secure quarters for a greatly enlarged staff, the Department and the Embassy in Saigon have recommended the construction of a larger building which would add $1,600,000 to the original appropriation. This will permit the construction of two additional floors to the building under construction and of a two-story wing to provide utility and office space. The enlarged structure will be able to house about 240 individuals.

The new section 4(f) added to the act by paragraph (3) of the first section of the bill contains new authorizations for the acquisition, by purchase or construction (including acquisition of long-term leaseholds), of sites and buildings, and for major alterations of buildings acquired under the 1926 act. In addition to authorizing an appropriation for facilities for USIA and for Agricultural and Defense attaché housing, the bill authorizes specific sums for each of five geographic areas. The original request for these programs was $36,065,000. During the presentation of the program on a project-byproject basis the subcommittee examined closely the Department's justification. It regarded some as too costly or as unnecessary. It was particularly critical of the emphasis given to staff apartments. Before the subcommittee had completed its deliberations the Department requested an opportunity to reexamine the entire program in the light of the subcommittee's observations and to comply with the request of the President to reduce appropriations as much as possible. The subcommittee reported to the full committee a sum of $26,010,000, a reduction of $10,055,000 from the original executive request.