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Additional data submitted to the subcommittee by-Continued
Kentucky Water Pollution Control Commission-Continued
Letter of May 4, 1959, to Hon. Brent Spence, etc.—Continued

Exhibit G. Letter from Tom Underwood, Jr., Lexington,

Ky., dated May 1, 1959--
Exhibit H. Letter from The Kentucky Co., Louisville, Ky.,

dated December 24, 1958.-
Exhibit I. Letter from Babbage & Kessinger, Lexington,

Ky., dated December 22, 1958-
Exhibit J. Letter from Mayor W. E. Sparks, Greenville,

Ky., dated May 1, 1959.
Exhibit K. Petition from citizens of Olive Hill, Ky., to De-

partment of Health, Education, and Welfare, dated Sep

tember 12, 1957--
Exhibit L. Statement of D. H. Bennett, Radcliffe, Ky.,

concerning sewage disposal, dated April 29, 1959..
Exhibit M. Letter of May 7, 1959, enclosing letter from

Mayor H. H. Jacobs, Sr., Cumberland, Ky--
Mitchell, Ernest R.:

Commissioners' Resolution R-58–59, passed April 22, 1959-
Northern Kentucky communities that could be helped by H.R.

5944.
National Association of Home Builders:

Policy statement for 1959.
“The Worst Public Works Program,” article from Fortune maga-

zine of December 1958.
National Association of Manufacturers:

Table 1.–Value of new public construction of sewer and water

facilities.--
Table 2.-Expenditures for new hospital construction by State

and local governments and from Federal grants.. National Wildlife Federation:

"Let's Clean Up All Our Poisoned Rivers,” article from Reader's

Digest, October 1957.-
"Sewage Works Double, but Federal Aid Faces Battle,” article

from Engineering News-Record, February 12, 1959Spence, Hon. Brent:

Excerpt from "Planning for Public Works”, prepared under the

direction of the special assistant to the President for public
works planning--
The Nation's needs: Present and future.

Population growth-Their needs for public facilities are

unlimited (chart)--
State and local public works requirements (chart)--
Water and the future--Per capita use is rising at an

increasing rate (chart)-
Partial list of municipal water and sewer bonds with net interest

cost of 4 percent and above.-
States which impose constitutional limitations on municipal ex-

penditures, indebtedness, and tax ratesTennessee Municipal League:

Detailed standards for water, sewage, and health services.

Estimate of hospital bed needs in Tennessee.
Widnall, Hon. William B.:

Bonded debt of Kentucky communities under 35,000 population.
Bonded debt of small Georgia communities.
Community. Facilities Administration, letter of May 7, 1959
(with enclosures), to Hon. William B. Widnall...
Loans approved, applications under consideration, and other

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community activities.. Dealer current bond offerings for 12 large cities. Debt of very small Kentucky communities under 3,000 popula

tion.--Government securities, April 21, 1959, from Wall Street Journal.

308 31

257 108

COMMUNITY FACILITIES ACT OF 1959

MONDAY, APRIL 20, 1959

HOUSE OF REPRESENTATIVES,
COMMITTEE ON BANKING AND CURRENCY,

SUBCOMMITTEE No. 1,

Washington, D.C. The subcommittee met, pursuant to notice at 10 a.m., Hon. Brent Spence presiding.

Present: Messrs. Spence, Brown, Reuss, Widnall, Mrs. Dwyer, and Mr. Miller.

(H.R. 5944, 86th Cong., 1st sess. 1 A BILL To expand the public facility loan program of the Community Facilities Admin

istration of the Housing and Åome Finance Agency, 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 "Community Facilities Act of 1959.”

SEC. 2. Title II of the Housing Amendments of 1955 is amended to read as follows:

"TITLE II—COMMUNÍTY FACILITY LOANS

"DECLARATION OF POLICY

“Sec. 201. It has been the policy of the Congress to assist, wherever possible, municipalities and other political subdivisions of States to provide the services and facilities essential to the health and welfare of the people of the United States. The Congress finds that in many instances municipalities or other political subdivisions of States, which seek to provide essential community facilities, are unable to raise the necessary funds at a reasonable cost.

"The Congress finds that the immediate construction of these essential community facilities would enhance the health and welfare of the people of the United States and would reduce unemployment and stimulate business activity.

"It is the purpose of this title to authorize the extension of credit to assist in the provision of essential community facilities by municipalities and other political subdivisions of States, where such credit is not otherwise available on equally favorable terms and conditions.

"The foregoing declarations of policy and findings apply equally in the case of nonprofit hospitals, and it is likewise the purpose of this title to authorize the extension of credit to assist in the provision of those facilities.

"FEDERAL LOANS

“Sec. 202. (a) The Housing and Home Finance Administrator, acting through the Community Facilities Administration, is authorized to purchase the securities and obligations of, or to make loans (including construction loans) to, municipalities and other political subdivisions of States (including public agencies and instrumentalities of one or more municipalities or other political subdivisions in the same State), to finance the construction, repair, or improvement of specific community facilities under State, municipal, or other applicable law; and to purchase the securities and obligations of, or to make loans to, nonprofit hospitals to finance specific projects for hospital construction, repair, or improvement. No such purchase or loan shall be made for payment of ordinary governmental or nonprofit operating expenses.

1

“(b) The powers granted in subsection (a) of this section shall be subject to the following restrictions and limitations :

“(1) No financial assistance shall be extended under this section unless the financial assistance applied for is not otherwise available on equally favorable terms and conditions, and, in the case of assistance extended through the purchase of securities or obligations, unless such securities or obligations, after being offered for sale to the public after duly advertised notice, cannot otherwise be sold on equally favorable terms and conditions; and all securities and obligations purchased and all loans made under this section shall be of such sound value or so secured as reasonably to assure retirement or repayment, and such loans may be made either directly or in cooperation with banks or other lending institutions through agreements to participate or by the purchase of participations or otherwise.

“(2) No securities or obligations shall be purchased and no loans shall be made under this section, including renewals or extensions thereof, which have maturity dates in excess of forty years.

“(3) Any securities or obligations purchased and any loan made under this section shall bear interest at a rate determined by the Administrator which shall be not more than the total of one-quarter of 1 per centum per annum added to the rate of interest in effect under section 203 (for funds obtained by the Administrator from the Secretary of the Treasury) at the time such securities or obligations are purchased or such loan is made.

“(4) No financial assistance shall be extended under this section for the construction, repair, or improvement of any public or nonprofit hospital involving an increase in the number of beds, unless the Surgeon General of the Public Health Service finds, and certifies to the Administrator, that the project is in conformity with the applicable State plan approved under section 623 of the Public Health Service Act (42 U.S.C. 291f).

“(5) No more than 10 per centum of the funds made available for financial assistance under this section from the revolving fund established by section 203 (b) shall be used to extend such assistance with respect to projects in any one State.

“(6) At least 25 percentum of the funds made available for financial assistance under this section from the revolving fund established by section 203 (b) shall be set aside and used exclusively to extend such assistance with respect to projects in communities having a population of thirty-five thousand or less according to the most recent decennial census.

“FINANCING

“SEC. 203. (a) In order to finance activities under this title, the Administrator is authorized and empowered to issue to the Secretary of the Treasury from time to time, in an amount not exceeding $1,000,000,000 in the aggregate, notes and other obligations. Such obligations shall be in such forms and denominations, and have such maturities and be subject to such terms and conditions, as may be prescribed by the Administrator, with the approval of the Secretary of the Treasury. Such notes or other obligations shall bear interest at a rate determined by the Secretary of the Treasury which shall not be more than the average annual interest rate on all interest-bearing obligations of the United States then forming a part of the public debt as computed at the end of the fiscal year next preceding the issuance by the Administrator of such notes or other obligations and adjusted to the nearest one-eighth of 1 per centum. The Secretary of the Treasury is authorized and directed to purchase any notes and other obligations of the Administrator issued hereunder and for such purpose the Secretary of the Treasury is authorized to use as a public debt transaction to proceeds from the sale of any securities, issued under the Second Liberty Bond Act, as amended, and the purposes for which securities may be issued under such Act, as amended, are extended to include any purchases of such notes and obligations. The Secretary of the Treasury may at any time sell any of the notes or other obligations acquired by him under this section. All redemptions, purchases, and sales by the Secretary of the Treasury of such notes or other obligations shall be treated as public debt transactions of the United States.

“(b) Funds borrowed under this section, together with repayments on account of financial assistance extended under this section and financial assistance extended or committed for under this title before the enactment of the Community Facilities Act of 1959, shall constitute a revolving fund to be used by the Administrator for the purpose of this title.

"GENERAL PROVISIONS

"SEC. 204. In the performance of, and with respect to, the functions, powers, and duties vested in him by this title the Administrator shall (in addition to any authority otherwise vested in him) have the functions, powers, and duties set forth in section 402, except subsection (c)(2) and the second sentence of subsection (b), of the Housing Act of 1950. There are authorized to be appropriated such sums as may be necessary to carry out this title.

"DEFINITIONS

“Sec. 205. (a) As used in this title

“(1) the term 'States' means the several States, the District of Columbia, the Commonwealth of Puerto Rico, and the Territories and possessions of the United States;

“(2) the term 'community facilities' means works for the storage, treatment, purification, or distribution of water; sewage, sewage treatment, and sewer facilities; and public hospitals and public nursing homes ;

“(3) the term 'hospital' means a general, tuberculosis, mental, chronic disease, or other type of hospital, and related facilities such as laboratories, outpatient departments, nurses' home and training facilities, and central service facilities operated in connection with hospitals, but does not include any hospital furnishing primarily domiciliary care;

“(4) the term 'nonprofit hospital' means a hospital which is owned and operated by one or more nonprofit corporations or associations no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual; and

“(5) the term 'nursing home' means a facility for the accommodation of convalescents or other persons who are not acutely ill and not in need of hospital care, but who require skilled nursing care and related medical services,

“(A) which is operated in connection with a hospital, or

“(B) in which such nursing care and medical services are prescribed by, or are performed under the general direction of, persons licensed to practice medicine or surgery in the State.

"PREVAILING RATE OF WAGE AND FORTY-HOUR WEEK

"SEC. 206. (a) The Administrator shall take such action as may be necessary to insure that all laborers and mechanics employed by contractors or subcontractors on projects assisted under this title (1) shall be paid wages at rates not less than those prevailing on the same type of work on similar construction in the immediate locality as determined by the Secretary of Labor in accordance with the Act of August 30, 1935 (Davis-Bacon Act), and (2) shall be employed not more than forty hours in any one week unless the employee receives wages for his employment in excess of the hours specified above at a rate not less than one and one-half times the regular rate at which he is employed.

“(b) In carrying out the duties of the foregoing subsection, the Secretary of Labor shall make a predetermination of the minimum wages to be paid laborers and mechanics in accordance with the provisions of the foregoing subsection which shall be set out in each project advertisement for bids and in each bid proposal form and shall be made a part of the contract covering the project.” SEC. 3. Section 702 (e) of the Housing Act of 1954, as amended, is amended by

(a) striking “$14,000,000” and inserting in lieu thereof “$64,000,000"; and

(b) striking “$48,000,000” and inserting in lieu thereof “$98,000,000”. Mr. SPENCE. The subcommittee will be in order.

We have met to consider the bill, H.R. 5944, to expand the public facility loan program of the Community Facilities Administration of the Housing and Home Finance Agency. I will call the first witness, the Honorable Robert Egan, mayor of Flint, Mich.

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