range of benefits available to them by law under the New Community Development Act.

One of the bills which has been referred to your committee is Sen ate Resolution 141, which was introduced by Senator Humphrey. This expresses the sense of the Senate that public new community develop ers should be eligible to receive the full range of benefits available to them under the New Community Development Act. We would encour age this committee to consider, to favorably report, and to work toward passage of Resolution 141 in order that the sense of the Senate may be expressed to the administration as to the desirability of using public agencies as new communities' developers and as full participants in benefiting from this important legislation.

I'd like to turn to another matter, and that is the whole question of the community development block grants. We are encouraged by the two major pieces of legislation before this committee which call for substantial reform and consolidation of the categorical programs administered by the Department of Housing and Urban Development. The National Governors' Conference has long favored the consolida tion of categorical grant programs. Although the administration's urban special revenue sharing program embodied in S. 1618 and the chairman's Community Development Assistance Act embodied in S. 2333 differ in their approaches to consolidation, I think the fact that both bills propose major simplification of the current categorical programs is far more important than the difference between the two bills.

We were disappointed to learn upon introduction of the administration's urban special revenue sharing program-S. 1618-that States would be ineligible to receive continuing assistance under the program. Although States would be eligible to receive a portion of the discretionary funds made available to the Secretary, these one-time. project-by-project grants to States for community development pur poses are not the type of Federal financial assistance States need in order to commit themselves toward a long term community development program at the State level.

un

This glaring deficiency has been corrected in your bill, Senator. wherein States are eligible as recipients of the sums appropriated der the Community Development Assistance Act.

The involvement of States in community development programs is a relatively new and rapidly growing phenomenon. It is important to note two facts. First, the majority of State housing and community development programs have come into existence within the past

years, and second. State involvement in housing and community de velopment programs has not been the result of any Federal require

ments to do so.

The record of State establishment of housing and community de velopment programs has been impressive. Fifteen States have estab lished housing finance programs which include the sale of tax-exempt revenue bonds to finance low- and moderate-income housing construc tion. Mortgage credit programs consisting of the sale of tax-exempt created in six States. Six States have established statewide public housing authorities. New York has established, and five other States are seriously considering, along with my own, the creation of urban

development corporations which issue tax-exempt revenue bonds to finance or develop large-scale multipurpose urban development projects.

The production rate of these State agencies is also quite impressive. The number of units completed or under construction is now approaching 200,000. These agencies often possess other powers, such as providing seed money and technical assistance to builders and developers, acquiring sites for housing, making construction loans, providing payments in lieu of property taxes, and sometimes are vested with powers to override local zoning and building codes.

Another area in which the States are becoming more and more active is the industrialized housing field. Legislation to create statewide certification requirements for the inspection and approval of housing built in factories has been enacted in 19 States and is being seriously considered in at least eight others.

In my own State of Wisconsin, Governor Lucey has called for the creation of a Housing Division in the Department of Local Affairs and Development. He has directed me to organize a statewide nonprofit agency and to call for the introduction of legislation to create both a State housing finance agency and community development corporation and at his request, a bill to create a statewide factory-built, production-certification process will be introduced in the State legislature next week.

All of this activity, primarily with the last 5 years, has occurred without a single Federal regulation being imposed or a single Federal law being enacted that requires the States to undertake any of these activities. Governors and State legislators have worked for the passage of these legislative proposals, not because they were required by the Federal Government to do so but rather because they are committed o improving the production of low- and moderate-income housing and improving the quality of their urban environments.

This committee is currently considering a major revision in both the housing subsidy and community development programs of the Federal Government. In light of the recent increased State activity in housing and community development programs, Congress now has an opportunity to take advantage of this interest at the State level toward achieving many of the same goals enumerated in the Federal legislation. We strongly endorse the provision of S. 2333 which provides that States are eligible to receive long term Federal financial assistance for community development programs because we believe this growing capacity at the State level will be of assistance to localities in achieving their community development priorities.

The policy of the National Governors' Conference recommends that a consolidated community development grant program be statutorily free of requirements for the submission of detailed plans except for a post-audit review. It is our belief that it's no longer necessary for Federal officials to hold the hand of local government in the planning and implementation of community development programs. Rather han focusing upon the application process to assure compliance with Federal goals and objectives, Congress could be far more helpful to localities if it would provide the financial base for assuring a continuing community development fiscal program which could effectively respond to locally determined public policy. An extensive appli

cation process almost necessarily encumbers a Federal financial grant with programatic constraints that do not adhere to locally determined priorities.

Another important recommendation contained in the policy of the National Governors' Conference which we believe to be of the utmos importance is the recommendation that the grants should be "entrusted to elected officials of general purpose governmental units."

It is our recommendation that State and local public elected officials should be the direct recipients of community development funds or at least, have the power to designate an appropriate community develop ment agency rather than the community development agency pmposed in S. 2333.

Regardless of whether the members of this subcommittee agree with the President's viewpoint or not, one of the byproducts of this administration has been an intense discussion of the merits of restructuring Federal grant programs in order that State and local elected public officials are held accountable for the use of Federal funds.

It's our hope, gentlemen, that one of the legacies of the 92d Congress will be a reform of these various Federal programs to assure the electorate that when a mayor, city councilman, or a Governor is elected to office, he has both the responsibility and the authority to assure the proper utilization of Federal funds. The trend, now, across the country is not toward the creation of independent redevelopment agencies, but of departments within the executive branch of city government directly under the control of mayors and city councils.

I think the Congress should enhance this trend toward placing more responsibility on the offices of State and local elected officials by enact ing legislation which would encourage responsible action rather than autonomous agency decisionmaking.

Senator, I would like to thank you for the time you have given me to present these views of Governor Lucey and the National Governors Conference. I'd be happy to answer any question you may have.

(The complete statement of Mr. Hill follows:)

STATEMENT OF CHARLES M. HILL, SECRETARY, DEPARTMENT OF LOCAL AFFAIRS AND DEVELOPMENT, WISCONSIN, REPRESENTING GOVERNOR PATRICK J. LUCEY AND THE NATIONAL GOVERNORS' CONFERENCE

This is the first time since last year's hearings on housing and new commun ties legislation that the National Governors' Conference has had an opportunity to appear before this Subcommittee. Since our last appearance, the members f the Subcommittee and particularly you, Mr. Chairman, have worked diligent to secure the enactment of Title VII of the Housing and Urban Developme Act of 1970; "The Urban Growth and New Community Development Act." A though few understood the potential impact of Title VII on community devel ment when the bill was enacted, we are confident that passage of the new e munities legislation will become as historic as the first Urban Renewal

of 1949.

Passage of the New Community Development Act has sparked the interest f Governors and state legislators across the country in creating new state comm nity development corporations. Although there is no requirement in the federa act that States create such agencies, state elected officials realize that through strong state initiatives can economically feasible, socially integrated an

quality-constructed new community projects be developed.

tering serious difficulties as to what is the proper role of public developers in

However, in the initial administration of this new program, we are encou

new communities program. This Administration is not totally convinced the public new community developers can play a major role in land aggregatie

infrastructure development, and the delivery of essential public services. The Administration does not fully understand that public developers can borrow money cheaper than private new community developers and thus are able to relend their money at lower interest rates to participating contractors; this Administration does not fully understand that public new community developers, through the powers of eminent domain, can aggregate the sites community projects at less cost and over a shorter period of time than can private new community developers. The Administration does not fully understand that the largest choice of sites for new community projects within a particular region of the country is available to public, and not private, developers. We believe it is essential for public new community developers to be eligible to receive the full range of benefits available to them by law under the New Community Development Act. One of the bills which has been referred to this Committee is Senate Resolution 141, introduced by Senator Humphrey, which expresses the sense of the Senate that public new community developers should be eligible to receive the full range of benefits available to them under the New Community Development Act. We would encourage this committee to consider, to favorably report, and to work toward Senate passage of S. Res. 141 in order that the sense of the Senate may be expressed to the Administration as to the desirability of using public agencies as new communities' developers and as full participants in benefiting from this important legislation.

COMMUNITY DEVELOPMENT BLOCK GRANTS

We are also encouraged by the two major pieces of legislation before this Committee which call for a substantial reform and consolidation of the categorical programs administered by the Department of Housing and Urban Development. The National Governors' Conference has long favored the consolidation of categorical grant programs. Although the Administration's Urban Revenue Sharing program embodied in S. 1618 and the Chairman's Community Development Assistance Act embodied in S. 2333 differ in their approaches to consolidation and in the programs to be consolidated, the fact that both bills propose major simplification of the current categorical programs is far more important than the differences between the two bills.

Appended to this statement is the current Policy of the National Governors' Conference with regard to community development-related programs now ad ministered by HUD in a single broad-purpose block grant. Also recommended is the eligibility of States for participation in a community development block grant program. Funds appropriated under the program should be allocated to states and general purpose units of local government with a minimum review process.

We were disappointed to learn, upon introduction of the Administration's Urban Special Revenue Sharing Program, S. 1618, that states would be ineligible to receive continuing assistance under the program. Although States would be eligible to receive a portion of the discretionary funds made available to the Secretary by S. 1618, these one-time, project-by-project grants to States for community development purposes are not the type of federal financial assistance States need in order to commit themselves towards a long-term community development program at the state level. This glaring deficiency in the Administration's proposal has been corrected in S. 2333 wherein States are eligible as recipients of the sums appropriated under the Community Development Assistance Act.

The involvement of States in community development programs is a relatively new and rapidly growing phenomenon. It is important to note two facts. First, the majority of state housing and community development programs have come into existence within the past five years; and second, state involvement in housing and community development programs has not been the result of any federal requirements to do so.

The record of state establishment of housing and community development programs has been impressive. Fifteen States have already established housing finance programs which include the sale of tax-exempt revenue bonds to finance low- and moderate-income housing construction. Mortgage credit programs consisting of the sale of tax-exempt revenue bonds to establish a secondary mortgage market have been created in six States. Six States have established state-wide public housing authorities. New York has established, and five other States are seriously considering the creation of urban development corporations - which issue tax-exempt revenue bonds to finance (or develop directly) large

cation process almost necessarily encumbers a Federal financial grant with programatic constraints that do not adhere to locally determined priorities.

Another important recommendation contained in the policy of the National Governors' Conference which we believe to be of the utmost importance is the recommendation that the grants should be "entrusted to elected officials of general purpose governmental units."

It is our recommendation that State and local public elected officials should be the direct recipients of community development funds or at least, have the power to designate an appropriate community develop ment agency rather than the community development agency proposed in S. 2333.

with

Regardless of whether the members of this subcommittee agree the President's viewpoint or not, one of the byproducts of this administration has been an intense discussion of the merits of restructuring Federal grant programs in order that State and local elected public officials are held accountable for the use of Federal funds.

It's our hope, gentlemen, that one of the legacies of the 92d Cor gress will be a reform of these various Federal programs to assure the electorate that when a mayor, city councilman, or a Governor is elected to office, he has both the responsibility and the authority to assure the proper utilization of Federal funds. The trend, now, across the country is not toward the creation of independent redevelopment agencies, but of departments within the executive branch of city government di

rectly under the control of mayors and city councils.

I think the Congress should enhance this trend toward placing more responsibility on the offices of State and local elected officials by enact ing legislation which would encourage responsible action rather than autonomous agency decisionmaking.

Senator, I would like to thank you for the time you have given me to present these views of Governor Lucey and the National Governors Conference. I'd be happy to answer any question you may have. (The complete statement of Mr. Hill follows:)

STATEMENT OF CHARLES M. HILL, SECRETARY, DEPARTMENT OF LOCAL AFFAIRS AND

DEVELOPMENT, WISCONSIN, REPRESENTING GOVERNOR PATRICK J. LUCEY AND THE

NATIONAL GOVERNORS' CONFERENCE

of 1949.

This is the first time since last year's hearings on housing and new communi ties legislation that the National Governors' Conference has had an opportunity the Subcommittee and particularly you, Mr. Chairman, have worked diligently to appear before this Subcommittee. Since our last appearance, the members of to secure the enactment of Title VII of the Housing and Urban Development Act of 1970; "The Urban Growth and New Community Development Act." Al though few understood the potential impact of Title VII on community develop munities legislation will become as historic as the first Urban Renewal A ment when the bill was enacted, we are confident that passage of the new com Governors and state legislators across the country in creating new state comm Passage of the New Community Development Act has sparked the interest of nity development corporations. Although there is no requirement in the federal act that States create such agencies, state elected officials realize that only through strong state initiatives can economically feasible, socially integrated and tering serious difficulties as to what is the proper role of public developers in the new communities program. This Administration is not totally convinced that However, in the initial administration of this new program, we are encoun public new community developers can play a major role in land aggregation

quality-constructed new community projects be developed.