AMERICAN ACADEMY OF PEDIATRICS, Hon. JOHN SPARKMAN, Chairman, Senate Housing Subcommittee, Washington, D.C. DEAR SENATOR SPARKMAN: The American Academy of Pediatrics, the national organization of physicians certified in the care of children, wishes to have recorded its support for S. 2269 which amends Title XI of the National Housing Act authorizing mortgage insurance for the construction or rehabilitation of medical practice facilities in certain areas where there is a shortage of doctors. The Academy will publish next month the results of a three year study on the delivery of health care to children. Contained in that report is a recommendation that "incentives be made available to stimulate the better distribution of health professionals to areas of greatest need so as to provide medical care of high quality to the entire spectrum of the population." The provisions embodied in S. 2269 are one means whereby the federal government might exercise initiative by providing assistance to young physicians wishing to establish a medical practice in rural communities or low-income urban areas. At the present time federal statutes authorize FHA insurance for medical practice facilities wherein five or more physicians practice. The Academy favors the logical extension of this authority so that other medical practice facilities to be established by fewer than five physicians might also qualify for FHA mortgage insurance. The medical community and the federal government have been vexd by the problem of maldistribution of physicians and indeed it has become apparent during the past few years that no one approach will adequately solve the problem of physician maldistribution. It is in this spirit that the Academy wholeheartedly supports the provisions of S. 2269 as a logical step forward, one of many which must be taken to promote distribution of physicians into underserved areas. Sincerely yours, GEORGE K. DEGNON, Director, Department of Government Liaison. AMERICAN DENTAL ASSOCIATION, Hon. JOHN SPARKMAN, Chairman, Subcommittee on Housing and Urban Affairs, Committee on Banking, Housing and Urban Affairs, U.S. Senate, Washington, D.C. DEAR MR. CHAIRMAN: I am writing you concerning S. 2269, a bill to amend title XI of the National Housing Act to authorize mortgage insurance for the construction or rehabilitation of medical practice facilities in certain areas where there is a shortage of physicians. The bill would extend to small groups of physicians (not to exceed four), whe would practice in certain physician shortage areas, the benefits of a 1966 law which authorized mortgage insurance to assist certain groups of physicians in establishing group practices. On behalf of the American Dental Association I respectfully request that you give careful consideration to amending the bill to include dentists who would practice in certain dental shortage areas. It is a well documented fact that the manpower and maldistribution problems confronting dentistry are as every bit as severe as are those confronting medicine. The prestigious Carnegie Commission Report on Medical and Dental Education, issued last November, emphasized the severity of the problems facing dentistry. In addition, the health subcommittees of both the Senate and House recognized, when recently considering legislation to extend the health manpower programs, the gravity of the problems facing both dentistry and medicine. All three of these groups based their findings on conclusive evidence illustrating the extent of dental disease, and the shortage and maldistribution of dentists in America. The incidence of dental disease in America is staggering; it is all but universal. Fewer than half of the people in this country have dental exams or treatment in a given year. By age two, approximately 50 percent of America's children have experienced tooth decay. Nearly 50 percent of all children under age 15 have never been to a dentist. This percentage is substantially higher for children in rural areas. In addition, almost 70 percent of the children in poor families have never been to a dentist. For every 100 Selective Service recruits, the Armed Forces needs to perform or supply 500 fillings, 80 extractions, 25 bridges and 20 dentures. The statistics illustrating the severity of the dental manpower shortage and maldistribution are equally gloomy. In 1970, the national average ratio of dentists to population was more than 1 to 2,100. The average ratio for 1950 was nearly 1 to 2,000, which itself is an unsatisfactory figure relative to need. According to the most recent figures available, the average dentist has barely 1,320 patients in his practice. It is conservatively estimated that the shortage of dentists will approximate 20,000 by 1980. The above ratios do not make clear the fact that there are many areas, mostly rural and inner city, which do not have adequate dental services available. In the state of Alabama, for example, the ratio is 1 to 3,100, an alarming ratio at best. However, in Jefferson County, the State's heaviest populated county, the ratio is 1 to 1,712. With such a variance, it is obvious that there must be areas with ratios far exceeding the State average. In fact, there are 45 counties with ratios exceeding 1 to 4,000, with one running as high as 1 to 18,950 (Chambers County). It is clear, then, that these areas especially could benefit from increased dental manpower and better distribution of existing dental facilities. The shortage of necessary manpower and the lack of proper distribution is particularly emphasized in rural areas and areas of low income. The failure of such areas to attract and retain dentists can be attributed to many factors and the problem is a complex one. However, we should provide incentives and encouragement to dentists to meet the needs of those areas. It is for this reason that we request your consideration. We feel the bill should be amended to include dentists so as not to preclude the establishment of a dental facility where such facility and staff were warranted in a community. I would like to thank you in advance for your consideration in this matter. If additional information is desired, please feel free to contact the Association's Washington Office. I respectfully request that this letter be made a part of the Subcommittee's hearing record on S. 2269 and related bills. Sincerely, HAL M. CHRISTENSEN, Director, Washington Office. THE SECRETARY OF HOUSING AND URBAN DEVELOPMENT, Re: S. 1518, 92d Congress (Hollings). Hon. JOHN SPARKMAN, Chairman, Committee on Banking, Housing and Urban Affairs, DEAR MR. CHAIRMAN: This is in further reply to your request for the views of this Department on S. 1518, a bill "To extend and amend laws relating to housing and urban development, and for other purposes." The Housing and Urban Development Act of 1969 extended the authority of this Department under title I of the National Housing Act to include the financing of mobile home purchases. This program is available in rural as well as urban areas and active efforts are being made, with the cooperation of the Farmers Home Administration, to make this availability well known to people in these areas. In addition, the Veterans' Housing Act of 1970 authorized the VA to guaranty loans to finance the purchase of mobile homes. We believe, in the absence of experience to the contrary, that these programs represent an adequate response to the need to which S. 1518 is addressed. We, therefore, do not at this time favor enactment of this bill. The Office of Management and Budget advises there is no objection to the submission of this report from the standpoint of the President's program. Sincerely, GEORGE ROMNEY. STATEMENT OF BRUCE L. NEWMAN, DIRECTOR, OHIO DEPARTMENT OF URBAN AFFAIRS The Department of Urban Affairs strongly supports the purposes of Senate Bill 2261 which recognizes the need to expand the resources available to state and local units of government for the provision of housing and related facilities for persons and families of low and moderate incomes. The recognition of the interrelationship of housing and economic development embodies in the purpose of the legislation and the need for funding the implementation of planned growth and development at the state and metropolitan level is equally supported. For states such as Ohio, which are planning to establish a new Housing Finance Development mechanism, a revised bill could provide the impetus for undertaking community development programs which would not otherwise be possible. A detailed review of the bill, however, points up certain problems and weaknesses which should be addressed to improve both its impact and administration. The authorized bond guarantee limit of $2,000,000,000 will not be sufficient if states and metropolitan development agencies do their job and attempt to utilize provisions of the proposed program. The New York Urban Development Corporation alone has a bonding capacity of nearly $2,000,000,000. Vigorous activity by that agency plus ten to fifteen other state agencies and numerous metropolitan agencies will quickly over-tax federal guarantee limits. The same problem would occur with the proposed $20,000,000 program administration authorization. Heavy bonding action plus administrative costs of new agencies operating throughout the country will quickly drain the resources available. I strongly urge that authorization levels be increased by at least five times to $10,000,000,000 and $100,000,000 respectively. Appropriations for the start-up phase of the program could be considerably less. Section 5 of Senate Bill 2261 appears to place an unreasonable requirement on agencies for participation in the proposed program. There appears to be little reason, for example, to require that an agency be able to “exercise its powers and functions through subsidiaries established by it". This requirement does not allow for local conditions which might make the direct exercise of power by an agency more appropriate, either politically or functionally. Additionally, Section 5 does not provide guidelines or criteria to insure a rational relationship between state and metropolitan agencies. This, I believe, represents a major potential problem and should be addressed in the bill. I would suggest that where a state has a qualified agency, that state agency must establish a working agreement with each metropolitan agency within the state to insure that no serious program duplication or conflict is present. In Section 6, line 5, the term "interest loans" appears to be unrelated to previous portions of the bill, which I understand to propose federal grant payments to reimburse qualified agencies for the interest differential between tax exempt and taxable bonds. Are these payments loans or grants? They certainly would have to be grants. In summary I wish to express my support for both the purposes and approach of Senate Bill 2261. If the bill were passed with certain modifications, as suggested above, it would materially improve the capability of Ohio to develop a sound housing program. STATEMENT OF JAMES A. R. JOHNSON, EXECUTIVE DIRECTOR, COUNCIL OF INTERGOVERNMENTAL RELATIONS, STATE OF CALIFORNIA Mr. Chairman: My name is James Johnson. I am Executive Director of the Council on Intergovernmental Relations of the State of California. The Council is under the jurisdiction of the Honorable Ed Reinecke, Lieutenant Governor of our State. We are the State agency responsible for local and intergovernmental cooperation and also for the administration of the local planning assistance program, better known as 701. I am pleased to be able to present this statement to you and to express the views of our Council, and to indicate to you our support for the proposal to transfer the administration of this program from the Depart ment of Housing and Urban Development to the Executive Office of the President, Office of Management and Budget. Our Council is composed of elected mayors, county officials and State officials. After an extensive discussion of the 701 program, the Council authorized me to communicate its views to you, as follows: Since the advent of the 701 program, the demands for funds and the eligible priorities and programs have increased substantially. Each year, new programs become eligible for funding under 701 and consequently each year, there is an increased demand for its use. At the same time, inflationary pressures over the past few years, along with the constant level of funding over the past three years, have meant cutbacks for most applicants. New agencies such as local Councils of Governments, which have been formed in recent years, have needed and have been allocated, 701 money in order to function. This new agency growth, the increase in number of eligible programs, and the constant level of appropriations have resulted in a net decrease in funding for agencies eligible under this program. The administrative bureaucracy established within the Department of Housing and Urban Development for allocating these funds has grown substantially over the past few years. Under the existing administrative structure, 701 funds are allocated to local jurisdictions in California by three separate agencies. The State, through the Council on Intergovernmental Relations, administers funds to cities under 50,000 and counties of any size. Two area offices of the Department of Housing and Urban Development, which operate independently of each other and of the State agency, fund metropolitan Councils of Governments and special projects in cities. The result of this fragmented approach is an uncoordinated overly complex response to the needs of both the State and its local jurisdictions. Let me illustrate the numerous problems under the Department administered 701 program in the State of California. I. DEMANDS FOR FUNDS The State of California's Council on Intergovernmental Relations received $1,273,000 for funding local jurisdictions out of the FY 1971 national appropriation of $50,000,000. Grant applications received by our Council from local governments requested funds in excess of $4,500,000. These grants reflected the numerous eligible programs ranging from updating of county general plans to Model Cities to minority training, manpower studies, and Indian reservation projects. II. TIMING The State of California and its local jurisdiction operate on a fiscal year basis (July 1 to June 30). Historically, the Department of Housing and Urban Development has transmitted contracts with beginning dates effective from February through May. This creates problems for the State, and especially for our local jurisdictions which have cash flow problems, and which have difficulty budgeting the necessary matcting funds for the grant on a fiscal year basis. The problem of local budgeting is further complicated by the fact that HUD is not consistent with regard to the time that a contract can be entered into, or the time monies will be made available. III. FUNDING From the date Congress actually appropriates funds for the 701 grant program to the time that a contract is entered into between HUD and the State, eight to ten months have usually passed. At the present time the State agency is entering into contracts with local jurisdictions granting funds which you appropriated for the 1971 fiscal year. Right now, the Congress is reviewing the allocation which the State will use in the 1973 fiscal year. IV. COMMITMENT OF FUNDS Under the administration of HUD, funds are directly committed to local jurisdictions by the Department prior to any review by the State. These direct prior commitments to local jurisdictions by HUD are then placed within our grant contract for administration. These dollars which have been allocated by HUD without State review or comment, in turn reduce the overall allocation which the State receives rather than providing additional monies for these projects. V. ALLOCATION OF FUNDS Each year, funds are designated for specific states. However, the State agencies themselves only receive approximately 50 percent of the monies designated. Prior to the establishment of area offices in California, the regional office in San Francisco funded directly to metropolitan Councils of Government and the State of California Council on Intergovernmental Relations funded cities under 50,000 and counties of any size. There was, however, a degree of coordination, since the regional organizations and the State dealt with the same HUD administrators. With the establishment of area offices, each is allocated a certain percentage of the funds designated for the State. The area offices, in Los Angeles and San Francisco, independently of each other, then fund the metropolitan Councils of Government. This situation provides for little or no coordination. It does not allow for review of funding levels or input by the State, nor does it take into account the State's priorities. VI. CONTRACTURAL ARRANGEMENTS In the past, the State of California has had one contract with the regional office within the Department of Housing and Urban Development. Following the establishment of the two area offires in 1970, it was HUD's intent to have the State enter into two contracts: one with each of the area offices for funding of local jurisdictions within the area office's district. The State protested this arrangement, and following intensive negotiations, HUD agreed to continue to allow the State to deal with the regional office. At the same time, however, the two area offices were allowed to not only comment upon our Cuncil's programs and applications, but a'so, in the case of this year's grant, delay the tender of contract and impose a special condition on the contract. Basically, the area office demanded that we find a specific city which had not followed the procedures and guidelines which the Council on Intergovernmental Relations imposed on all cities and counties in the State. The regional office has again reiterated their desire and intent to have the State of California enter into contracts with the two area offices. This not only undermines the basic principle that each State is a single, sovereign entity, but also requires that the State of California coordinate the activities of two area offices within the same federal department. This, we believe, is contrary to the basic principles for which the area offices were established. VII. FRAGMENTATION OF PROGRAMS With the existing division of the State of California by HUD and the fragmentation of funding agencies, local jurisdictions, including cities, counties and regional agencies are unsure as to the priorities to be met, who will fund them. to whom applications should be submitted, and who has money available. Four metropolitan Councils of Governments, which are supposed to be funded by the area offices of HUD were, in fact, not allocated any funds to be used in the fiscal year 1972. As a result, the State of California, out of its local planning assistance funds, was forced to allocate $200,000 to these regional agencies after it was determined, following several months of negotiation, that HUD was not going to make its own funds available for these agencies. It should be made clear that these four agencies had been funded the previous year by HUD and that they were not new organizations or associations. The State of California and its local jurisdictions are in need of a unified, coordinated approach to problem solving. We have identified the needs and estab lished goals and priorities for their accomplishment. These goals and priorities. however, can only be met if the State has coordinative administrative control over the allocation of funds under the 701 program. This has not been the case in the past and is not the case at the present time. For these reasons, we urge your immediate passage and support of legislation which would place the administration of the 701 program within the Executive Office of the President under the jurisdiction of either the Office of Management and Budget or the Office of Economic Opportunity. Our experience with existing administrative framework for the administration and allocation of 701 funds indicates that the red tape and delay in the program is not what Congress intended. The program should recognize fully the rights, powers and responsi bilities of States and local government units and allow them the innovation and |