natural disaster. I respectfully request that the text of the provision be inserted in the record at this point.

FEDERAL RELOCATION PAYMENTS

Notwithstanding any other provision of law or regulation promulgated thereunder, no application for relocation assistance authorized under sections 105 (c) or 114 of the Housing Act of 1949, title IV of the Housing and Urban Development Act of 1965, or section 107 of the Demonstration Cities and Metropolitan Development Act of 1966, or any other Act of Congress shall be denied because the applicant was required to relocate as a result of a major disaster as determined by the President under the Act entitled "An Act to authorize Federal assistance to States and local governments in major disasters, and for other purposes", approved September 30, 1950, as amended (42 U.S.C. 1855–1855g), if an application for such assistance is filed within one year after such major disaster.

As indicated, this provision would simply extend to those displaced by major disasters relocation payments, if an area is subsequently designated as an urban renewal area and application is made for such payments within one year of the date of the disaster.

As Members know, there are several types of relocation payments which are presently authorized under urban renewal. They are:

1. For individuals and families, up to $200 for direct loss of property and moving expenses including storage costs.

2. For low-income families and elderly or handicapped individuals unable to obtain public housing or Federal rent supplemental housing, additional relocation payments of up to $500 a year for a two year period.

3. For business concerns and nonprofit organizations, up to $3.000 for direct loss of property and moving expenses including storage costs; or for actual moving expense and no direct loss of property, up to $25,000.

4. For certain small businesses, a displacement payment of $2,500.

5. For displaced owner-occupants of 1-to-2 family dwellings, replacement housing payments of up to $5,000 toward the purchase of replacement dwellings. 6. Such payments may also include reimbursement for certain costs pursuant to property transfers.

Mr. Chairman, I have made reference to the tornado activity in May in Lubbock. As fate would have it, among those most seriously injured from an economic standpoint were those least able to rebound.

One of the most severely hit areas was a Mexican-American community on the north side of Lubbock called Guadalupe. This area was almost a total loss. This was always a very low-income area. Today many former residents of the area are almost destitute. The average income in the Guadalupe area is about $3,000 per year and in some households it is less than that.

These are proud people. Many are property owners. Some 65% are property owners, some of the parcels having been handed down from generation to generation. These people have their roots in this community.

Since the havoc of the May tornado, the people are scattered-with relatives, with friends and some in housing made available by the Federal Housing Administration and by the Veterans Administration.

The people want to relocate on their previous home sites. And through hard work by local officials and with the splendid cooperation of officials of the the Department of Housing and Urban Development, an application for a Neighborhood Development Program has been prepared, submitted and approved.

But without the availability of relocation payments as would be the case with the standard Urban Renewal or NDP program-there is in many instances no way to begin the task of reconstruction. Due to the devastation caused by the tornado people are without adequate means to rebuild. And there is no way to clear land titles for redevelopment.

Mr. Chairman, following the tornado, a number of disturbing facts have come to light. Many families, because of the low income and other factors, have not been able to keep abreast of property taxes. An initial survey indicates that some 45 percent of the property is tax delinquent, ranging from $100 to $3,000 per property and averaging about $400 per parcel. In some cases back taxes alone aggregate more than the residual value of the devasted property.

Additionally, there are outstanding paving liens which in the Guadalupe area average $300 per property and range from $30 to $870.

Furthermore, there are a number of families which had little or no insurance on property and their homes and they are left in the position of making payments on property improvements which no longer exist.

Out of some 500 homes in the Guadalupe area, approximately 400 were destroyed by the tornado, hence 80 percent of these needing help the most will not receive the benefit of relocation payments. unless this provision is adopted. The task ahead is a monumental challenge but without relocation payments, those displaced by the tornado will have an almost impossible task of rebuilding. Only a small portion of the area will be reconstructed unless those displaced by the tornado are made eligible for relocation benefits.

Mr. Chairman, I urge that there be included in the bill recommended by the Committee, a proposal which would correct this deficiency in existing law.

It has been demonstrated that relocation payments are a necessary and integral part of an urban renewal program. The nature of the displacement is irrelevant, whether it be by planned, deliberate redevelopment or by sudden and tragic devastation. The people have been removed from their property just as they would be under standard urban renewal, and it is necessary to have these benefits in order to develop a viable renewal program.

In conclusion, I state that the provision I am supporting provides nothing more, nothing less, than is now authorized under the conventional urban renewal program. Similar amendments have been offered to disaster relief legislation pending in the Senate. The principle has the full concurrence of officials of the Department of Housing and Urban Development. The proposition makes sense. I urge its adoption.

Mr. MAHON. Now, what I would like to call carefully to your attention, and as forcefully as I might, is the fact that in order to carry out our urban renewal program in Lubbock, we badly need a certain proviso in your general bill. We have had urban renewal in Lubbock, but we have a new program approved which encompasses much of the tornado area. I have worked with the Housing and Urban Development people and others in securing assistance in the drafting of a proviso. The objective of the provision which I wish to advocate would be to provide relocation benefits in a disaster area, which is subsequently approved as an urban renewal area. In Lubbock we are faced with a situation where the people are not eligible for relocation benefits because the tornado occurred before this area was approved for urban renewal. We had an urban renewal program in other sections of the city which had been in operation a number of years.

Mr. JOHNSON. Mr. Mahon, you are addressing yourself to residential occupants or are you talking about businesses?

Mr. MAHON. We are talking about the whole matter of relocation payments to people in disaster areas which become urban renewal areas. This proviso would extend these benefits to businesses and to individuals where there has been a major disaster, even though at the time of the disaster there was no urban renewal project covering the particular area.

Now, I think all of you know that the urban renewal program cannot succeed, and has not succeeded in areas where there were no relocation benefits. Otherwise you cannot relocate these people. You have to make some provision for them.

I would like to read the proposed language, which is also in the statement which I have presented, and which I would hope the committee would embrace in your bill:

Notwithstanding any other provision of law or regulation promulgated thereunder, no application for relocation assistance authorized under sections 105(c) or 114 of the Housing Act of 1949, title IV of the Housing and Urban Development Act of 1965, or section 107 of the Demonstration Cities and Metropolitan Development Act of 1966, or any other Act of Congress shall be denied because

the applicant was required to relocate as a result of a major disaster as determined by the President under the Act entitled "An Act to authorize Federal assistance to States and local governments in major disasters, and for other purposes", approved September 30, 1950, as amended (42 U.S.C. 1855-1855g), if an application for such assistance is filed within one year after such major disaster.

Mr. Chairman, I have discussed this language with members of your staff, and I realize upon first reading that it may seem a bit complex, but actually the objective is a very simple one of making it possible to have a successful urban renewal project following a major disaster in an area.

Mr. JONES. Thank you very much.

Mr. Clausen.

Mr. CLAUSEN. I think the chairman has made a very excellent suggestion, because we have seen areas where earthquakes have hit which is a similar situation to our own problem out there in California, and the income on the tax base and the economy is just fantastic, so I am sorry to hear of the problem but I am pleased to hear your comments and your suggestions because it seems as though it is parallel to some of the other problems.

Mr. MAHON. I do not think this kind of circumstance will arise too frequently, but it will arise from time to time. As I understand it, the Housing and Urban Development people are strongly in support of this general proviso in the new program.

Mr. ROBERTS. Mr. Chairman.

Mr. JONES. Mr. Roberts.

Mr. ROBERTS. I Would just like to express my appreciation to the distinguished chairman of the House Appropriations Committee, and the co-dean of the Texas delegation-we do not have vice-deans, we have co-deans. We are delighted he is here and appreciate the statement he made, and of course it will always be a pleasure to work with him.

Mr. MAHON. Thank you very much, I say to my colleague from Texas. This morning I had hoped to be here earlier, but we came to a crucial stage in the conference with the Senate on the independent offices appropriations bill, and the final issues were not resolved until 11 o'clock. We hope to have that independent offices conference report before the House on tomorrow. Also we hope to take up the continuing resolution at noon today, because only three of our regular appropriation bills have been actually enacted into law. We need to enact 14, and we have passed 13 through the House, so I think we are making pretty good progress. But there has been considerable delay as a result of the delays in the other body.

Mr. JONES. You need not make any apology because this committee will receive you at any time you can be here and present to the committee some observations that are worthwhile. They are certainly worthy, and we have been wrestling with this problem throughout the years in our highway bills, and our reservoir taking in the exercise of eminent domain, so that I think the committee is sympathetic with what you seek to achieve.

Mr. MAHON. Thank you very much. I must say that the country owes a great deal of thanks and gratitude to what this committee has done for this country in supporting and expanding the economic strength of our natural resources in this country. Not only the country, generally but all Members of Congress owe you a debt of gratitude for what you have done and are doing.

Mr. JONES. Before you leave, you brought up a very pertinent observation that the Chair must make, Mr. Mahon. That is the fact that over the hundred bills that have been passed by the Congress since 1803, 70 percent of them, the disasters, are a result of floods. In that period of time, the investment in flood prevention works in the Tennessee Valley alone, the expenditure of $272 million, has resulted in the benefit, since we do not have floods any more, $520 million. In New England we have saved with an investment of $20 million over $200 million. In the California disaster, in which we attended and observed firsthand, there was a savings of $1.6 billion in damage, had those works not been installed.

So, we do not have any investment program that is as profitable, useful or as accommodating to the tranquility of our people as the investment we make in those projects, notwithstanding the fact that people like to make fun of them, because they are "pork barrels," but they are monuments to imagination and desire of the Congress of the United States to harness these streams and arrest the floods and save the damages and ravages of continuous flooding.

Mr. MAHON. Very well said, Mr. Chairman.

Mr. CLAUSEN. To add to what the chairman has said, during that 2-week period in California where there was $1.6 billion saved, it was found that the investment in flood protection works only by comparison had been in the vicinity of $900 million. I would hope that the chairman could join some of us that are working with these disaster relief problems every day under this committee's jurisdiction in seeing that the Bureau of the Budget or its new agency, and your own committee, if we could somehow I think we can double and conceivably triple the total dollar commitment, and I think it needs to be elevated to a higher position of priority in the total expenditures, tion, you are not going to be able to develop the tax base or the ecobecause unless we can have the security against that kind of devastation, you are not going to be able to develop the tax base or the economic base. I hate to spend these moneys after the fact when I am sure that we can be enhancing the agriculture of the country as well as the economic potential for many people in the sparsely populated areas where floods are a major problem.

Mr. MAHON. Thank you very much.

Mr. JONES. Thank you.

Our next witness is Mr. John Eachon, Jr., Associate Administrator for Financial Assistance, Small Business Administration. We are pleased to have you, Mr. Eachon, and your associates. Would you be kind enough to identify them?

STATEMENT OF JOHN EACHON, JR., ASSOCIATE ADMINISTRATOR FOR FINANCIAL ASSISTANCE, SMALL BUSINESS ADMINISTRATION; ACCOMPANIED BY JIM PROCTOR, ASSOCIATE GENERAL COUNSEL, AND BRYAN SHOEMAKER, OFFICE OF DISASTER RELIEF

Mr. EACHON. Mr. Chairman, on my right is Jim Proctor, who is our Associate General Counsel. On my left is Bryan Shoemaker, who is with our Office of Disaster Relief. My name is John Eachon.

Mr. Chairman, it is a real pleasure to represent the Small Business Administration.

Mr. JONES. Are you representing Mr. Cowles, too?

Mr. EACHON. Mr. Cowles is retired.

Mr. JONES. I understand. He was with us so very long, and we gained his friendship throughout the years, and we hope for you the same pleasurable experience that he had.

Mr. EACHON. Thank you, sir. I had the opportunity of meeting Mr. Cowles for the first time the other day, and my understanding is he had long and very meritorious service in the area of disaster assistance. We appreciate the opportunity of appearing before you to discuss the important subject of disaster assistance.

Before I turn to comments on the bills, I would like to mention briefly our recent and present disaster activity.

Fiscal year 1970, just ended, saw the second largest disaster loan activity in the history of SBA. We approved 17,011 loans for $175.1 million. This record was exceeded only in fiscal year 1966 as a result of our activity in Hurricane Betsy.

Hurricane Camille represented by far the largest part of our disaster program last year (involving, as of July 4, 1970, 13,349 loans for $138.2 million), followed by substantial activity resulting from the tornadoes in Texas. We had as many as 253 SBA personnel working the Hurricane Camille disaster area at one time and 129 personnel in the Texas tornado area at one time. Since many of the people affected by the disasters were of the Mexican-American and black population groups, we made special efforts to see that SBA personnel who could communicate effectively with them were sent to the disaster

area.

As of July 16, 1970, we had approved 1,516 loans for $12.3 million in the Texas disasters. Of these, 1,282 were home loans for $5.4 million. Since these areas were designated by the President as major disaster areas, the provisions of the Disaster Relief Act of 1969 are applicable.

We are still quite active in both disaster areas. Our Administrator, Hilary J. Sandoval, Jr., made several trips to each of these areas to assess the damage, the need for assistance, and to review the effectiveness of the agency's efforts to provide disaster loan assistance. He continues to stay in close personal touch with these disaster operations. In fiscal year 1970, the SBA Administrator made 61 disaster declarations of which 25 were also designated major disasters by the President. Both figures represent sizable increases over the preceding fiscal year. Once again, the devastating human and economic impact of natural disasters has been made vividly clear.

I would like now to comment on the bills which the committee is considering. I will address my remarks to H.R. 17518 and H.R. 17824. The companion legislation in the Senate is S. 3745.

Since many provisions of the Disaster Relief Act of 1969 expire as to disasters occurring after December 31, 1970, it was essential to consider permanent legislation to continue, improve, or supplement the beneficial provisions of the 1969 legislation. The President has recommended legislation to accomplish this.

The provisions of the bills under consideration affecting directly the SBA disaster loan program are found in section 3. A primary objective of these provisions is to eliminate in most respects the disparities which now exist between our disaster loan program in areas de