Annual contributions.

contributions.

centum of such cost. In the case of annual contributions in assistance of low rentals as provided in section 10 the total of such loans outstanding on any one project and in which the Authority participates shall not exceed 90 per centum of the development or acquisition cost of such project. Such loans shall bear interest at such rate not less than the going Federal rate at the time the loan is made, plus one-half of one per centum, shall be secured in such manner, and shall be repaid within such period not exceeding sixty years, as may be deemed advisable by the Authority.

ANNUAL CONTRIBUTIONS IN ASSISTANCE OF LOW RENTALS

SEC. 10. (a) The Authority may make annual contributions to public-housing agencies to assist in achieving and maintaining the low-rent character of their housing projects. The annual contributions for any such project shall be fixed in uniform amounts, and shall be paid in such amounts over a fixed period of years. No part of Local annual such annual contributions by the Authority shall be made available for any project unless and until the State, city, county, or other political subdivision in which such project is situated shall contribute, in the form of cash or tax remissions, general or special, or tax exemptions, at least 20 per centum of the annual contributions herein provided. The Authority shall embody the provisions for such annual contributions in a contract guaranteeing their payment over such fixed period: Provided, That no annual contributions shall be made, and the Authority shall enter into no contract guaranteeing any annual contribution in connection with the development of any low-rent-housing or slum-clearance project involving the construction of new dwellings, unless the project includes the elimination by demolition, condemnation, and effective closing, or the compulsory repair or improvement of unsafe or insanitary dwellings situated in the locality or metropolitan area, substantially equal in number to the number of newly constructed dwellings provided by the project; except that such elimination may, in the discretion of the Authority, be deferred in any locality or metropolitan area where the shortage of decent, safe, or sanitary housing available to families of low income is: so acute as to force dangerous overcrowding of such families.

Equivalent elimination.

Annual contributions: limitations; rate of.

(b) Annual contributions shall be strictly limited to the amounts and periods necessary, in the determination of the Authority, to assure the low-rent character of the housing projects involved. Toward this end the Authority may prescribe regulations fixing the maximum contributions available under different circumstances, giv.

ing consideration to cost, location, size, rent-paying ability of prospective tenants, or other factors bearing upon the amounts and periods of assistance needed to achieve and maintain low rentals. Such regulations may provide for rates of contribution based upon development, acquisition, or administration cost, number of dwelling units, number of persons housed, or other appropriate factors: Provided, That the fixed contribution payable annually under any contract shall in no case exceed a sum equal to the annual yield, at the going Federal rate of interest at the time such contract is made plus 1 per centum, upon the development or acquisition cost of the low-rent housing or slum-clearance project involved: And provided further, That all such annual contributions shall be used first to apply toward any payment of interest or principal on any loan due to the Authority from the public housing agency.

(c) In case any contract for annual contributions is made for a period exceeding twenty years, the Authority shall reserve the right to reexamine the status of the low-rent-housing project involved at the end of ten years and every five years thereafter; and, at the time of any such reexamination, the Authority may make such modification (subject to all the provisions of this section) in the fixed and uniform amounts of subsequent annual contributions payable under such contract as is warranted by changed conditions and as is consistent with maintaining the low-rent character of the housing project involved. In no case shall any contract for annual contributions be made for a period exceeding sixty years.

Annual contributions

contracts: reexamination.

Contracts

(d) All payments of annual contributions pursuant Availability to this section shall be made out of any funds available of funds. to the Authority when such payments are due, except that its capital and its funds obtained through the íssuance of obligations pursuant to section 20 (including repayments or other realizations of the principal of loans made out of such capital and funds) shall not be available for the payment of such annual contributions. (e) The Authority is authorized, on and after the date of the enactment of this Act, to enter into contracts which provide for annual contributions aggregating not more than $28,000,000 per annum. Without further authorization from Congress, no new contracts for annual contributions beyond those herein authorized shall be entered into by the Authority. The faith of the United States is solemnly pledged to the payment of all annual contributions contracted for pursuant to this section, and there is hereby authorized to be appropriated in each fiscal year, out of any money in the

authorized: limitation on

aggregate amount.

82058-38

Payments pledged to secure public housing

agency loans.

Treasury not otherwise appropriated, the amount necessary to provide for such payments."

(f) Payments under annual contributions contract shall be pledged as security for any loans obtained by public-housing agency to assist the development of th housing project to which the annual contributions re late: Provided, That annual contributions shall be use first to apply toward the payment of interest or princi pal as same mature on any loan due to the Authorit from the public-housing agency. The term "any loa due to the Authority" as used in this section shall mea any loan made by the Authority (including any bond or other evidences of such loan which are resold by th Authority) to assist the development of the project t which the annual contributions relate."

Capital

grants: au- · thorization.

CAPITAL GRANTS IN ASSISTANCE OF LOW RENTALS

SEC. 11. (a) As an alternative method of assistanc to that provided in section 10, when any public housin agency so requests and demonstrates to the satisfactio of the Authority that such alternative method is bette suited to the purpose of achieving and maintaining lo rentals and to the other purposes of this Act, capita grants may be made to such agency for such purpose: The capital grants thus made for any low-rent-housin or slum-clearance project shall be paid in connectio with its development or acquisition, and shall be strictl limited to the amounts necessary, in the determinatio of the Authority, to assure its low-rent character: Pro vided, however, That no capital grant shall be made fo the development of any low-rent-housing or slum-clear ance project involving the construction of new dwell

6

As amended by Section 601 of the United States Housin Act Amendments of 1938 (Public Resolution, No. 122, 75t Cong.). Section 10 (e) originally read as follows:

"(e) The Authority is authorized, on and after the date o the enactment of this Act, to enter into contracts which pro vide for annual contributions aggregating not more tha $5,000,000 per annum, on or after July 1, 1938, to enter int additional such contracts which provide for annual contribu tions aggregating not more than $7,500,000 per annum, and o or after July 1, 1939, to enter into additional such contract which provide for annual contributions aggregating not mor than $7,500,000 per annum. Without further authorizatio from Congress, no new contracts for annual contributions be yond those herein authorized shall be entered into by th Authority. The faith of the United States is solemnly pledge to the payment of all annual contributions contracted for pur suant to this section, and there is hereby authorized to be ap propriated in each fiscal year, out of any money in the Treasur not otherwise appropriated, the amounts necessary to provid for such payments."

'Section 10 (f) was added by Section 601 of the United State Housing Act Amendments of 1938 (Public Resolution, No. 129 75th Cong.).

ings, unless the project includes the elimination by demolition, condemnation, and effective closing, or the compulsory repair or improvement of unsafe or insanitary dwellings situated in the locality or metropolitan area, substantially equal in number to the number of newly constructed dwelling units provided by the project; except that such elimination may, in the discretion of the Authority, be deferred in any locality or metropolitan area where the shortage of decent, safe, or sanitary housing available to families of low income is so acute as to force dangerous overcrowding of such families.

(b) Pursuant to subsection (a) of this section, the Same: Authority may make a capital grant for any low-rent- limitation. nousing or slum-clearance project, which shall in no case exceed 25 per centum of its development or acquisition

cost.

of funds.

(c) All payments of capital grants by the Authority Same: availability pursuant to subsection (b) of this section shall be made out of any funds available to the Authority, except that its capital and its funds obtained through the issuance of obligations pursuant to section 20 (including repayments or other realizations of the principal of loans made out of such capital and funds) shall not be available for the payment of such capital grants.

limitation on

(d) The Authority is authorized, on or after the date Same: of the enactment of this Act to make capital grants aggregate (pursuant to subsection (b) of this section) aggregating capital not more than $10,000,000, on or after July 1, 1938, to grants. make additional capital grants aggregating not more than $10,000,000, and on or after July 1, 1939, to make additional capital grants aggregating not more than $10,000,000. Without further authorization from Congress, no capital grants beyond those herein authorized shall be made by the Authority.

any

grant for

labor costs.

(e) To supplement any capital grant made by the Same: addiAuthority in connection with the development of tional capital low-rent-housing or slum-clearance project, the President may allocate to the Authority, from any funds available for the relief of unemployment, an additional capital grant to be expended for payment of labor used in such development: Provided, That such additional capital grant shall not exceed 15 per centum of the development cost of the low-rent-housing or slum-clearance project involved.

contribution.

(f) No capital grant pursuant to this section shall be Same: local made for any low-rent-housing or slum-clearance project unless the public housing agency receiving such capital grant shall also receive, from the State, political subdivision thereof, or otherwise, a contribution for such project (in the form of cash, land, or the value, capitalized at the going Federal rate of interest, of community facilities or services for which a charge is usually made, or tax remissions or tax exemptions) in an amount not

Disposal of Federal projects.

Purpose.

Authorization.

Sale to public housing agencies only.

less than 20 per centum of its development or acquis

cost.

DISPOSAL OF FEDERAL PROJECTS

SEC. 12. (a) It is hereby declared to be the purpos Congress to provide for the orderly disposal of any rent-housing projects hereafter transferred to or quired by the Authority through the sale or leasin such projects as hereinafter provided; and, in orde continue the relief of Nation-wide unemployment an order to avoid waste pending such sale or lease, to 1 vide for the completion and temporary administra of such projects by the Authority.

(b) As soon as practicable the Authority shall sell Federal projects or divest itself of their managem through leases.

(c) The Authority may sell a Federal project only a public housing agency. Any such sale shall be fo consideration, in whatever form may be satisfactory the Authority, equal at least to the amount which the thority determines to be the fair value of the project: housing purposes of a low-rent character (making su adjustment as the Authority deems advisable for a annual contributions which may hereafter be given he under in aid of the project), less such allowance for preciation as the Authority shall fix. Such project sh for loans and then become eligible for loans pursuant to section 9, a either annual contributions pursuant to section 10 or capital grant pursuant to section 11. Any obligation the purchaser accepted by the Authority as part of t consideration for the sale of such project shall be deem a loan pursuant to section 9.

Eligibility

grants.

Leases.

(d) The Authority may lease any Federal low-rer housing project, in whole or in part, to a public housi agency. The lessee of any project, pursuant to this par graph, shall assume and pay all management, operatio and maintenance costs, together with payments, if an in lieu of taxes, and shall pay to the Authority su annual sums as the Authority shall determine are co sistent with maintaining the low-rent character of su project. The provisions of section 321 of the Act of Ju 30, 1932 (U. S. C., 1934 edition, title 40, sec. 303 b3), sha not apply to any lease pursuant to this Act.

(e) In the administration of any Federal low-ren housing project pending sale or lease, the Authority sha fix the rentals at the amounts necessary to pay all ma Rentals pend- agement, operation, and maintenance costs, togeth with payments, if any, in lieu of taxes, plus such add tional amounts as the Authority shall determine are co sistent with maintaining the low-rent character of su project.

ing sale or

lease.

See Appendix V, p. 27.