propose to launch upon a new program that I think we will have to go a little slow on. I mean that, considering the fact we already have two programs under this and now we propose the most difficult one and we are going to rely upon associations of religious and fraternal organizations to, in a sense, underwrite them; is that not right?

Mr. BERTSCH. That is correct, and you may be sure, Congressman Horan and Mr. Chairman, that we will continue to exercise the sort of prudence which I hope has become a trademark of this organization in the administration of this program. We recognize it is a challenging one that will require all the ingenuity we can bring to bear on it. I do not know if there is a term "audacious prudence" or not, but this is the approach we intend to employ in carrying out this program. Mr. HORAN. I would suggest probably the word "austere" would be better because you will not have a big bank balance to fool with in this program.

Mr. BERTSCH. That is correct.

Mr. HORAN. I do not want it to interfere with the program we have now that has really helped some farmers.

Mr. BERTSCH. We think this program will complement what we have previously engaged in.

Mr. HORAN. We have made gentlemen out of some of our rural people that otherwise might have become welfare problems.

That is all from me, Mr. Chairman.

Mr. THOMAS. They have done a good job.

NEED FOR RURAL HOUSING FOR THE ELDERLY

Mr. WHITTEN. There is one statement I would like to make. I do not know how many elderly people you know in rural areas, but the number who want to move is limited, from my observation. Did you ever try to get one of them to stay away from home 2 nights in a row? Mr. BERTSCH. Mr. Chairman, I think this is a phenomenon that gave rise to the passage of this legislation, if I judge the legislative intent properly. At the present time the only opportunity for rural elderly who lack the physical strength or lack the resources to maintain their own homes, the only opportunity is for them to move to urban areas, far from friends, associations, and families and live in multifamily housing in a city. This is an effort to at least preserve for them the relationships they have had through their productive lives and make it unnecessary for them to transfer totally to a city a long way away.

Mr. WHITTEN. I think you had better know the names of those who want loans. You have your people working in every county in the United States, except New York City and a few cities, and it is very easy to get their names.

Mr. BERTSCH. Mr. Chairman, we intend to do that. This is what I mean by prudence. As I said, we have people in half the agricultural counties in the United States serving all the counties.

Mr. THOMAS. Will you yield?

Mr. Administrator, you have a very limited market in this program and you will skim the cream off the top of it since there is no subsidy for all practical purposes. This is long-term money, 50 years. That is your market, is it not?

Mr. BERTSCH. That is correct.

BASIS FOR RENTALS

You will have to be more than careful. I am just wondering about your square footage cost, $6. I assume you will include land cost, utility cost, plus construction cost. If you get in some parts of the United States down in Mr. Whitten's and my part of the country that figure may be realistic, but when you get in the New England States, the Middle West, and so forth, that $6 a square foot including utilities and land costs. So I am just wondering if your rent figure of $50 a month will be realistic?

Mr. BERTSCH. We recognize the hazard of giving a square footage cost on a national basis. It varies a great deal from region to region. I think I base this $6 on our experience in building individual housing. Mr. THOMAS. Since there is no subsidy involved your rent will depend on your construction cost?

Mr. BERTSCH. Yes, sir.

Mr. THOMAS. And your overall cost of $50 per month, I know is a horseback figure you are giving, but I doubt it is a realistic figure. Mr. BERTSCH. We may be coming back

Mr. WHITTEN. I expect you will.

Mr. THOMAS. Mr. Whitten has built a very ample record here. This is a revolving fund. The regular commitee may want a limitation on your administrative cost within your revolving fund and I am sure from time to time the regular committee, Mr. Whitten and Mr. Horan, will go into this quite adequately and in detail, but for the time being I think you have built a fine record, Mr. Whitten.

ELIGIBILITY FOR ELDERLY HOUSING

Mr. Bow. Who is eligible for this housing? Do I understand from your testimony it is those who are financially in such condition they cannot maintain their own homes?

Mr. BERTSCH. Eligibility for this housing would not be limited to such, but I would assume that this character of housing would be appealing only to those who could not afford more elaborate housing. Because of the language of the statute we obviously need to fix certain upper limits, since these funds are made available to low and moderate income families. We propose at this time to make this finding on a county-by-county basis, utilizing our vast network of committees who are familiar with conditions in the counties.

Mr. Bow. I was interested in your justification on page 2 where you

say:

Such housing would be designed to provide homelike accommodations for persons 62 years of age or over who are no longer interested in or capable of maintaining ownership of their own homes.

The term "interested in" is what I am wondering about. I fit into this category perfectly. I am in the age group and live in a rural area and when the crab grass is growing and the Japanese beetles are giving me trouble I am not so interested in maintaining ownership. So, would I fit in this category?

Mr. BERTSCH. Not unless it were a low or moderate income family. Mr. Bow. So when you say "no longer interested in" it is not a correct statement?

Mr. BERTSCH. It is not a complete statement, and if we do not provide also this is limited to low and moderate income families we should have, Mr. Congressman.

Mr. Bow. I should think from the testimony we have had this morning that this is a type of new program that should be gone into in depth by the regular committee. I do not think we have the time.

Mr. WILSON. I would like to ask one or two questions.

ELIGIBILITY FOR LOANS

First, may a city, a township, or a county participate in this program for its elderly people who are not able to help themselves by borrowing this money at a low rate of interest?

Mr. BERTSCH. No, this program is not available to public bodies, only to private nonprofit corporations and consumer cooperatives. Mr. WILSON. If an elderly couple who are very well fixed care to participate in this program by building a dormitory for elderly people and operating it at no profit, could they participate?

Mr. BERTSCH. Mr. Polk is in charge of our loan program. I would like to ask him this question.

Mr. Polk, the question has been raised as to whether or not these loans to nonprofit associations and consumer cooperatives for lowcost rental housing may also be made to public bodies or to individuals who would apply the low-cost provision to their tenants.

Mr. POLK. As we understand it, the loans cannot be made to individuals. The law is rather specific that the loans are to be made to private nonprofit corporations and consumer cooperatives. So we have been interpreting it, with the assistance of the Office of the General Counsel, that we could not make such loans to individuals. Mr. WILSON. Thank you.

Mr. BERTSCH. What about subdivisions of government, townships? Mr. POLK. We have a definition the General Counsel's Office has supplied. May I read briefly from it:

A private nonprofit corporation is an incorporated entity which (1) is owned and controlled by private, rather than public, persons, (2) is organized and operated to further a purpose other than making pecuniary gains or profits for the corporation or for any of its members or stockholders who are not among the occupants of the senior citizens rental housing, (3) is legally precluded—by statute or by its chapter, articles or incorporation, or other basic instrumentfrom distributing, before its dissolution, any gains or profits to its members or stockholders who are not among the occupants of the housing, and (4) makes a satisfactory engagement to keep the rental charges as low as is reasonably consistent with the actual expenses of operation and maintenance of the housing and the debt service of the senior citizens loan and any other indebtedness related to provision of the housing, including the establishment of reasonable

reserves.

Mr. WILSON. Mr. Chairman, that answers my question.

Mr. WHITTEN. I think it would be appropriate to have that opinion in the record. You say it is from your General Counsel?

Mr. POLK. Yes.

(The material referred to follows:)

ELIGIBLE APPLICANTS FOR DIRECT LOANS FOR SENIOR CITIZENS RENTAL HOUSING

What are "private nonprofit corporations" as the term is used in section 515(a) of the Housing Act of 1949?

A private nonprofit corporation is an incorporated entity which (1) is owned and controlled by private, rather than public, persons, (2) is organized and

operated to further a purpose other than making pecuniary gains or profits for the corporation or for any of its members or stockholders who are not among the occupants of the senior citizens rental housing, (3) is legally precluded-by statute or by its charter, articles of incorporation, or other basic instrumentfrom distributing, before its dissolution, any gains or profits to its members or stockholders who are not among the occupants of the housing, and (4) makes a satisfactory engagement to keep the rental charges as low as is reasonably consistent with the actual expenses of operation and maintenance of the housing and the debt service of the senior citizens loan and any other indebtedness related to provision of the housing, including the establishment of reasonable reserves. Mr. WHITTEN. What is the next item that involves a new program? Mr. GRANT. The next item has to do with the Forest Service. Mr. WHITTEN. Could we bypass that at the moment and go to the research service request. What is the research service request?

AGRICULTURAL STABILIZATION AND CONSERVATION SERVICE

Mr. GRANT. Nothing except for pay costs. We do have an item under the Agricultural Stabilization and Conservation Service program for the land use adjustment program under section 101, title I of the Food and Agriculture Act of 1962.

Mr. WHITTEN. Who is in charge?

Mr. GRANT. Mr. Godfrey.

Mr. WHITTEN. Mr. Godfrey, what are you requesting here?

LAND-USE ADJUSTMENT PROGRAM

Mr. GODFREY. We are requesting $6 million composed of two items, $5 million for land-use adjustment rental payments, and $1 million for cost-sharing payments on land covered by expired conservation reserve contracts. The authority is section 101 of title I of the Food and Agriculture Act of 1962.

Mr. WHITTEN. Will you provide it for the record?

Mr. GODFREY. Yes.

(The material follows:)

PUBLIC LAW 87-703

87th Congress, H.R. 12391
September 27, 1962

AN ACT To improve and protect farm income, to reduce costs of farm programs to the Federal Government, to reduce the Federal Government's excessive stocks of agricultural commodities, to maintain reasonable and stable prices of agricultural commodities and products to consumers, to provide adequate supplies of agricultural commodities for domestic and foreign needs, to conserve natural resources, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Food and Agriculture Act of 1962".

TITLE I-LAND-USE ADJUSTMENT

SEC. 101. The Soil Conservation and Domestic Allotment Act (49 Stat. 163), as amended, is further amended as follows:

(1) by repealing subsections (b), (c), (d), (e), (f), and (g) of section 7; (2) by repealing subsection (a) of section 8;

(3) by amending the first sentence of subsection (b) of section 8 of said Act, as amended, by striking out the language "Subject to the limitations provided in subsection (a) of this section, the" and inserting in lieu thereof the word "The"; and

(4) by adding a new subsection at the end of section 16 of said Act to read as follows:

"(e) (1) For the purpose of promoting the conservation and economic use of land, the Secretary, without regard to the foregoing provisions of this Act, except those relating to the use of the services of State and local committees, is authorized to enter into agreements, to be carried out during such period not to exceed ten years as he may determine, with farm and ranch owners and operators providing for changes in cropping systems and land uses and for practices or measures to be carried out primarily on any lands owned or operated by them and regularly used in the production of crops (including crops such as tame hay, alfalfa, and clovers, which do not require annual tillage, and including lands covered by conservation reserve contracts under subtitle B of the Soil Bank Act) for the purpose of conserving and developing soil, water, forest, wildlife, and recreation resources. Such agreements shall include such terms and conditions as the Secretary may deem desirable to effectuate the purposes of this subsection and may provide for payments, the furnishing of materials and services, and other assistance in amounts determined by the Secretary to be fair and reasonable, in consideration of the obligations undertaken by the farm and ranch owners and operators and the rights acquired by the Secretary: Provided, That agreements for the establishment of tree cover may not provide for annual payments with respect to such land for a period in excess of five years.

"(2) No agreement shall be entered into under this subsection covering land with respect to which the ownership has changed in the two year period preceding the first year of the contract period unless (a) the new ownership was acquired by will or succession as a result of the death of the previous owner, (b) the land becomes a part of an existing farm or ranch, or (c) the land is combined with other land as a farming or ranching enterprise which the Secretary determines will effectuate the purposes of the program: Provided, That this provision shall not prohibit the continuation of an agreement by a new owner after an agreement has once been entered into under this subsection.

(3) The Secretary shall provide adequate safeguards to protect the interests of tenants and sharecroppers, including provision for sharing, on a fair and equitable basis, in payments under this subsection.

"(4) The Secretary may agree to such modification of agreements previously entered into as he may determine to be desirable to carry out the purposes of this subsection or to facilitate the practical administration of the program carried out pursuant to this subsection.

(5) The Secretary shall issue such regulations as he determines necessary to carry out the provisions of this subsection.

"(6) Notwithstanding any other provision of law, the Secretary, to the extent he deems it desirable to carry out the purposes of this subsection, may provide in any agreement hereunder for (A) preservation for a period not to exceed the period convered by the agreement and an equal period thereafter of the cropland, crop acreage, and allotment history applicable to land covered by the agreement for the purpose of any Federal program under which such history is used as a basis for an allotment or other limitation on the production of such crop; or (B) surrender of any such history and allotments.

"(7) There is hereby authorized to be appropriated such sums as may be necessary to carry out this subsection. The Secretary is authorized to utilize the facilities, services, authorities, and funds of the Commodity Credit Corporation in discharging his functions and responsibilities under this subsection including payment of costs of administration for the program authorized under this subsection: Provided, That after June 30, 1963, the Commodity Credit Corporation shall not make any expenditures for carrying out the purposes of this subsection unless the Corporation has received funds to cover such expenditures from appropriations made to carry out the purposes of this subsection. The Secretary shall not enter into agreements hereunder which would require payments, the furnishing of materials and services, and other assistance, in amounts in excess of $10,000,000 for any calendar year, except that the Secretary may enter into agreements hereunder with respect to lands previously covered by conservation reserve contracts which would require payments, the furnishing of materials and services, and other assistance, in an additional amount for the cal endar year 1963 not exceeding $15,000,000.”

(5) by adding a new subsection at the end of section 16 of said Act to read as follows:

"(f) The Secretary is authorized to use the services, facilities, and authorities of Commodity Credit Corporation for the purpose of making disbursements to