cluding debt service, administration, maintenance, establishment of reserves, and other costs and charges), an amount equal to such excess shall be applied, or set aside for application, to purposes which, in the determination of the Authority, will effect a reduction in the amount of subsequent annual contributions. In no case shall any contract for annual contributions be made for a period exceeding sixty years: Provided, That, in the case of projects initiated after March 1, 1949, contracts for annual contributions shall not be made for a period exceeding forty years from the date the first annual contribution for the project is paid: Provided further, That, in the case of such projects or any other projects with respect to which the contracts for annual contributions (including contracts which amend or supersede contracts previously made) provide for annual contributions for a period not exceeding forty years from the date the first annual contribution for the project is paid, the fixed contribution may exceed the amount provided in the first proviso of subsection (b) of this section by 1 per centum of development or acquisition cost; And provided further, That the amount of the fixed annual contribution which would be established under this Act for a newly constructed project by a public housing agency designed to accommodate a number of families of a given size and kind may be established, as a maximum annual contribution in lieu of any other guaranteed contribution authorized under this section, for a project by such public housing agency which would provide housing for the comparable number, sizes, and kinds of families through the acquisition, acquisition and rehabilitation, or use under lease of existing structures which are suitable for low-rent housing use and obtainable in the local market.

(d) All payments 2 of annual contributions pursuant to this section shall be made out of any funds available to the Authority when such payments are due, 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 annual contributions.

(e) The Authority is authorized to enter into contracts for annual contributions aggregating not more than $366,250,000 per annum, which limit shall be increased by $47,000,000 on the date of the enactment of the Housing and Urban Development Act of 1965, and by

1 This proviso added by sec. 502, Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 487.

2 The First Independent Offices Appropriation Act, 1954. Public Law 176. 83d Congress, approved July 31, 1953, 67 Stat. 298, 306, provided that all expenditures of the appropriation in that Act for annual contributions should be subject to audit and final settlement by the Comptroller General under the provisions of the Budget and Accounting Act of 1921, as amended.

See sec. 10(k) of the United States Housing Act of 1937, as amended.

3 As originally enacted by the United States Housing Act of 1937, Public Law 412, 75th Congress, approved September 1, 1937, 50 Stat. 888, 892, contracts were authorized for annual contributions aggregating not more than $5,000,000 per annum on and after September 1, 1937, $7,500,000 on or after July 1, 1938, and $7,500,000 on or after July 1, 1939.

The United States Housing Act Amendments of 1938. Public Law 122, 75th Congress, approved June 21, 1938, 52 Stat. 820, authorized contracts for annual contributions aggregating not more than $28,000,000 on and after June 21, 1938.

The Housing Act of 1949, Public Law 171, 81st Congress. approved July 15, 1949. 63 Stat. 413, 427, authorized additional contracts on and after July 1, 1949, totaling $308.000.000 over a six-year period for 810,000 units. This Act further provided that, subiect to the foregoing ceiling, such limit could be increased at any time or times by additional amounts aggregating not more than $55.000.000 upon a determination by the President, after receiving advice from the Council of Economic Advisers as to the general effect of such increase upon conditions in the building industry and upon the national economy, that such action is in the public interest.

further amounts of $47,000,000 on July 1 in each of the years 1966, 1967, and 1968, respectively, but any such contracts for additional units for any one State shall not, after the date of enactment of the Housing Act of 1961, be entered into for more than 15 per centum of the aggregate amount not already guaranteed under contracts for annual contributions on such date: Provided,1 That subject to any contractual obligation outstanding on the date of the enactment of the Housing and Urban Development Act of 1965, any units not under construction within five years from the date they were reserved to a public housing agency may be reserved, allocated, or placed under contract for annual contributions in any State without limitation as to the aggregate amount of units which may be placed under contract for annual contributions in any one State: Provided further, That no such new contract for additional housing units shall be entered into after the date of enactment of the Housing Act of 19612 except with respect to low-rent housing for a locality respecting which the Administrator has made the determination and certification relating to a workable program as prescribed in section 101 (c) of the Housing Act of 1949, and the Authority shall enter into only such new contracts for preliminary loans as are consistent with the number of dwelling units for which contracts for annual contributions may be entered into. 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

In a letter dated July 18, 1950, President Truman requested the Housing and Home Finance Agency to reduce the construction of low-rent public housing units to 30,000 for the first six months of the fiscal year 1951 due to the Korean emergency.

The Independent Offices Appropriation Act, 1952, Public Law 137, 82d Congress, 65 Stat. 268, limited the low-rent public housing program to construction starts for 50,000 dwelling units during the fiscal year 1952.

The Independent Offices Appropriation Act, 1953, Public Law 455, 82d Congress, 66 Stat. 393, 403, limited the public housing program to construction starts for 35,000 dwelling units during the fiscal year 1953, and also prohibited the PHA from entering into future contracts exceeding 35,000 dwelling units during any one fiscal year subsequent to fiscal year 1953 unless a greater amount of units was hereafter authorized by the Congress.

The Independent Offices Appropriation Act, 1954, Public Law 176, 83d Congress, 67 Stat. 298, 307, limited construction starts to 20,000 units and prohibited any future construction contracts unless authorized by Congress.

The Housing Act of 1954, Public Law 560, 83d Congress, approved August 2, 1954, 68 Stat. 590, 630, 631, authorized new contracts for 35,000 additional units, during the fiscal year 1955, with no limitation on construction starts.

The Housing Amendments of 1955, Public Law 345, 84th Congress, approved August 11, 1955, 69 Stat. 635, 638, authorized new contracts for 45,000 additional units, with no limitation on construction starts.

The Housing Act of 1956, Public Law 1020, 84th Congress, approved August 7, 1956, 70 Stat. 1091, 1103, authorized new contracts for 35,000 additional units in each of the fiscal years 1957 and 1958, with no limitation on construction starts. This Act also provided that any balance of the authorization of 45,000 units in the Housing Amendments of 1955, not utilized by July 31, 1956, could be made available.

No further authorization was made for fiscal year 1959.

The Housing Act of 1959, Public Law 86-372, 86th Congress, approved September 23, 1959, 73 Stat. 654, 680, authorized new contracts for 37,000 additional units, with no limitation on construction starts.

No further authorizations were provided for fiscal year 1961.

The Housing Act of 1961, Public Law 87-70. approved June 30, 1961, 75 Stat. 149, 163, made available the remaining balance of the $336 million annual contribution authorization in the Housing Act of 1949 ($28 million from the former authorization, plus the additional $308 million in the 1949 Act), covering approximately 100,000 units.

The Housing Act of 1964, Public Law 88-560, approved September 2, 1964, 78 Stat. 769, 795, increased the annual contribution authorization from $336,000,000 to $366,250,000, and authorized contracts for approximately 37,500 additional units, with no limitation on construction starts.

The Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 487, increased the annual contribution authorization by $188 million covering four years, in increments of $47 million for each of the fiscal years 1966 through 1969 respectively. This increase provides an estimated 60,000 additional low-rent housing units annually over the 4-year period.

1 Sec. 504, Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 487, inserted this proviso.

2 June 30, 1961.

for pursuant to this section, and there is hereby authorized to be appropriated in each fiscal year, out of any money in the Treasury not otherwise appropriated, the amounts necessary to provide for such payments.

(f) Payments under annual contributions contracts shall be pledged, if the Authority so requires, as security for any loans obtained by a public housing agency to assist the development or acquisition of the housing project to which the annual contributions relate.

(g) Every contract for annual contributions for any low-rent housing project shall provide that

(1) the maximum income limits fixed by the public housing agency shall be subject to the prior approval of the Authority and the Authority may require the agency to review and revise such limits if the Authority determines that changed conditions in the locality make such revisions necessary in achieving the purposes of the Act;

(2) the public housing agency shall adopt and promulgate regulations establishing admission policies which shall give full consideration to its responsibility for the rehousing of displaced families, to the applicant's status as a serviceman or veteran or relationship to a serviceman or veteran or to a disabled serviceman or veteran, and to the applicant's age or disability, housing conditions, urgency of housing need, and source of income: Provided, That in establishing such admission policies the public housing agency shall accord to families of low income such priority over single persons as it determines to be necessary to avoid undue hardship; and

(3) the public housing agency shall determine, and so certify to the Authority, that each family in the project was admitted in accordance with duly adopted regulations and approved income limits; and the public housing agency shall make periodic reexaminations of the incomes of families living in the project and shall require any family whose income has increased beyond the approved maximum income limits for continued occupancy to move

1 Sec. 205, Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149, 164, amended this subsection to place greater responsibility in the local housing authorities for admission policies, and sec. 401 (b). Housing Act of 1964, Public Law 88-560, approved September 2, 1964, 78 Stat. 769, 794, further amended this subsection to substitute "displaced families" for "those displaced by urban renewal or other governmental action" in paragraph (2) and to add the proviso at the end of paragraph (2). With the exception of the foregoing amendments by the Housing Act of 1964, sec. 205 of the Housing Act of 1961 amended this subsection to read as set forth in the text. Immediately prior to amendment sec. 10 (g) read as follows:

"(g) Every contract made pursuant to this Act for annual contributions for any lowrent housing project shall require that the public housing agency, as among low-income families which are eligible applicants for occupancy in dwellings of given sizes and at specified rents, shall extend the following preferences in the selection of tenants:

"First, to families which are to be displaced by any low-rent housing project or by any public slum-clearance, redevelopment or urban renewal project, or through action of a public body or court, either through the enforcement of housing standards or through the demolition, closing, or improvement of dwelling units, or which were so displaced within three years prior to making application to such public housing agency for admission to any low-rent housing: Provided, That as among such projects or actions the public housing agency may from time to time extend a prior preference or preferences; And provided further, That, as among families within any such preference group, first preference shall be given to families of disabled veterans whose disability has been determined by the Veterans' Administration to be service-connected, and second preference shall be given to families of deceased veterans and servicemen whose death has been determined by the Veterans' Administration to be service-connected, and third preference shall be given to families of other veterans and servicemen;

"Second, to families of other veterans and servicemen and as among such families first preference shall be given to families of disabled veterans whose disability has been determined by the Veterans' Administration to be service-connected, and second preference shall be given to families of deceased veterans and servicemen whose death has been determined by the Veterans' Administration to be service-connected."

from the project unless the public housing agency determines that, due to special circumstances, the family is unable to find decent, safe and sanitary housing within its financial reach although making every reasonable effort to do so, in which event such family may be permitted to remain for the duration of such a situation if it pays an increased rent consistent with such family's increased income.

1

(h) Every contract made pursuant to this Act for annual contributions for any low-rent housing project initiated after March 1, 1949, shall provide that no annual contributions by the Authority shall be made available for such project unless such project (exclusive 2 of any part thereof covered by a contract or conveyed pursuant to paragraph (9) of section 15, and exclusive of any portion thereof which is not assisted by annual contributions under this Act) is exempt from all real and personal property taxes levied or imposed by the State, city, county, or other political subdivisions, but such contract shall require the public housing agency to make payments in lieu of taxes equal to 10 per centum of the annual shelter rents charged in such project or such lesser amount as (i) is prescribed by State law, or (ii) is agreed to by the local governing body in its agreement for local cooperation with the public housing agency required under subsection 15 (7) (b)(i) of this Act, or (iii) is due to failure of a local public body or bodies other than the public housing agency to perform any obligation under such agreement: Provided, That, with respect to any such project which is not exempt from all real and personal property taxes levied or imposed by the State, city, county, or other political subdivisions, such contract shall provide, in lieu of the requirement for tax exemption and payments in lieu of taxes, that no annual contributions by the Authority shall be made available for such project unless and until the State, city, county, or other political subdivisions in which such project is situated shall contribute, in the form of cash or tax remission, the amount by which the taxes paid with respect to the project exceed 10 per centum of the annual shelter rents charged in such project: Provided further, That, prior to execution of the contract for annual contributions the public housing agency shall, in the case of a tax-exempt project, notify the governing body of the locality of its estimate of the annual amount of such payments in lieu of taxes and of the amount of taxes which would be levied if the property were privately owned, or, in the case where the project

1 Sec. 402, Housing Act of 1954, Public Law 560, 83d Congress, approved August 2, 1954, 68 Stat. 590, 631, amended subsection (h) to read as set forth down to the first proviso. Sec. 404, Housing Act of 1964, Public Law 88-560, approved September 2, 1964, 78 Stat. 769, 795, amended the remainder of this subsection to eliminate the provision which prohibited any payment in lieu of taxes that would reduce the value of the tax exemption to less than 20 percent of the Federal contribution.

Sec. 408 of the Housing Act of 1956, Public Law 1020, 84th Congress, approved August 7, 1956, 70 Stat. 1091, 1108, authorized payments in lieu of taxes for project fiscal years ending prior to April 1, 1956, by housing authorities in Houston, Texas; Quincy, Illinois; Fresno, California; Reading, Pennsylvania; Huntington, W. Va.; Los Angeles, California; Monroe, Louisiana; Dothan, Alabama; Sacramento, California; Cincinnati, Ohio; and Tampa, Florida.

Sec. 907, Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149, 191, authorized payment in lieu of taxes by the Housing Authority of Holyoke, Mass. for its fiscal year ended December 31, 1956.

Sec. 1006, Housing Act of 1964, Public Law 88-560, approved September 2, 1964, 78 Stat. 769, 807, authorized payment in lieu of taxes by the Hawaii Housing Authority to the city and county of Honolulu for the fiscal year ended June 30, 1959.

2 Sec. 507 (b) (1), Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 488, inserted the first part of this parenthetical phrase relating to paragraph (9) of sec. 15. The remainder of this parenthetical phrase was inserted by sec. 206(b), Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149, 165.

is taxed, its estimate of the annual amount of the local cash contribution, and shall thereafter include the actual amounts of such payments or contributions in its annual report. Contracts for annual contributions entered into prior to the effective date of the Housing Act of 19641 may be amended in accordance with the first sentence of this subsection.

(i)2 Notwithstanding any other provision of law or any contract or other arrangement made pursuant thereto, any public housing agency which utilizes public services and facilities of a municipality or other local governmental agency making charges therefor separate from real and personal property taxes shall be authorized by the Authority (without any amendment to the contract for annual contributions or deductions from payments in lieu of taxes otherwise payable) to pay to such municipality or other local governmental agency the amount that would be charged private persons or dwellings similarly situated for such facilities and services.

(i) Repealed.3

(k) All expenditures of appropriations for the payment of annual contributions shall be subject to audit and final settlement by the Comptroller General of the United States under the provisions of the Budget and Accounting Act of 1921, as amended.

5

(1) In any community where it has been determined by resolution or ordinance, or by referendum, that a project shall be liquidated by sale thereof to private ownership, such community may negotiate with

1 September 2, 1964.

2 Sec. 204 (b), Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149, 164, redesignated the former sec. 15 (10) of the United States Housing Act of 1937 as sec. 10(1) and repealed the former sec. 10(1). Immediately prior to repeal by sec. 204 (b), sec. 10(1) read as follows:

"(1) Notwithstanding any other provision of law, the Authority may enter into new contracts for loans and annual contributions for (1) not more than such number of dwelling units as does not exceed the number of units which were covered by annual contribution contracts on the date of enactment of the Housing Act of 1959 and are not built, the contracts therefor being canceled; and (2) additional dwelling units which, together with the dwelling units covered by new contracts entered into under clause (1), do not exceed thirty-seven thousand units: Provided, That the Authority may enter into only such new contracts for preliminary loans as are consistent with the number of dwelling units for which contracts for annual contributions may be entered into hereunder: Provided further, That no such new contract for annual contributions for additional units shall be entered into except with respect to low-rent housing for a locality respecting which the Housing and Home Finance Administrator has made the determination and certification relating to a workable program as prescribed in section 101 (c) of the Housing Act of 1949, as amended: And provided further, That no new contracts for loans and annual contributions for additional dwelling units in excess of the number authorized in this sentence shall be entered into unless authorized by the Congress."

3 Immediately prior to repeal by sec. 206 (c), Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149, 165, subsection 10 (j) read as follows:

(j) Every contract made pursuant to this Act for annual contributions for any lowrent housing project for which no such contract has been entered into prior to the enactment of the Housing Act of 1954 shall provide that

(1) after payment in full of all obligations of the public housing agency in connection with the project for which any annual contributions are pledged, and until the total amount of annual contributions paid by the Authority in respect to such project has been repaid pursuant to the provisions of this subsection, (a) all receipts in connection with the project in excess of expenditures necessary for management, operation, maintenance, or financing, and for reasonable reserves therefor, shall be paid annually to the Authority and to local public bodies which have contributed to the project in the form of tax exemption or otherwise, in proportion to the aggregate contribution which the Authority and such local public bodies have made to the project, and (b) no debt in respect to the project, except for necessary expenditures for the project, shall be incurred by the public housing agency:

(2) if, at any time, the project or any part thereof is sold, such sale shall be to the highest responsible bidder after advertising, or at fair market value, and the proceeds of such sale together with any reserves, after application to any outstanding debt of the public housing agency in respect to such project, shall be paid to the Authority and local public bodies as provided in clause 1(a) of this subsection: Provided, That the amounts to be paid to the Authority and the local public bodies shall not exceed their respective total contribution to the project."

4 Subsection (k) was added by sec. 405 of the Housing Act of 1954, Public Law 560, 83d Congress, approved August 2, 1954, 68 Stat. 590, 633.

5 Subsection (1) was added by sec. 406 of the Housing Act of 1954, Public Law 560, 83d Congress, approved August 2, 1954, 68 Stat. 590, 633.