mercial, industrial, governmental, institutional, and other purposes; (2) wise development and conservation of natural resources, including land, water, minerals, wildlife, and others; (3) balanced transportation systems, including highway, air, water, pedestrian, mass transit, and other modes for the movement of people and goods; (4) adequate outdoor recreation and open space; (5) protection of areas of unique natural beauty, historical and scientific interest; (6) properly planned community facilities, including utilities for the supply of power, water, and communications, for the safe disposal of wastes, and for other purposes; and (7) concern for high standards of design. The committee wishes to make it clear that the intent of the language in section 401 (a) relating to the making of "reasoned choices" between conflicting objectives is that the rules and regulations issued by the President shall provide for the making of "reasoned choices" in the light of the circumstances existing at the time the Federal programs and projects are formulated, established, or reviewed. It is not intended that the rules and regulations themselves will embody prejudgments between the "reasoned choices" available. Section 401(b) provides, as a matter of congressional policy, that agencies, to the extent possible, will take into account all viewpointsnational, regional, State, and local-in the formulation and administration of such programs and projects. Section 401(c) requires, to the maximum extent practicable, that all Federal aid for development purposes shall be consistent with and shall further the objectives of State and local development planning. The intent of Congress, that Federal departments and agencies administering such programs consult with and seek advice from one another through interagency and other mechanisms in an effort to assure fully coordinated assistance programs, is stated in section 401(d). Section 401(e) stipulates that, insofar as possible, the systematic planning that is required by individual Federal assistance programs shall be coordinated with and made part of comprehensive local and areawide development planning. Section 402 provides that, in the absence of substantial reasons to the contrary, Federal departments and agencies shall make Federal aid available to general rather than special-purpose units of local government. Local units of government should be responsible for a wide range of functions, so that the governing process involves a reconciliation of conflicting interests and a balancing of governmental needs and resources. General-purpose units of local government meet these conditions. Special-purpose units often do not. Section 403 provides that the Bureau of the Budget or such other agency as may be designated by the President shall be authorized to prescribe the rules and regulations necessary to administer this title. TITLE V-ACQUISITION, USE, AND DISPOSITION OF LAND WITHIN URBAN This title further amends the Federal Property and Administrative Services Act of 1949, as amended (40 U.S.C. 471 et seq.), by adding at the end thereof a new title as follows: "Title VIII-Urban Land Section 801 of this title provides for a short title: "Federal Urban Land-Use Act." Section 802 of this title states a general policy of promoting harmonious intergovernmental relations. It also prescribes use of uniform procedures in the acquisition, use, and disposal of land in urban areas by the General Services Administrator. The procedures affect these urban land transactions when entered into for the GSA or on behalf of other Federal agencies. The section provides that the transactions shall, to the greatest practicable extent, be in accordance with the planning and development objectives of the affected local governments and local planning agencies. Section 803 of this new title VIII requires that the Administrator of the General Services Administration shall, prior to the sale of Federal land give reasonable notice to the head of the governing body of the unit of urban general local government having zoning or land-use jurisdiction over the land. This notice is designed to give the local government an opportunity to zone the use of such land in accordance with local comprehensive planning objectives. The Administrator, to the greatest practicable extent, is further directed to furnish any prospective purchasers with local comprehensive planning information relating to zoning, land use, and/or other regulations which would be applicable to the use and development of the property offered for sale. The Administrator is not expected to guarantee that this information, to be furnished by the local jurisdiction concerned, is necessarily accurate or will remain unchanged. Section 804 requires that the Administrator, to the greatest extent practicable, will give notice to the unit of local government prior to entering a commitment to acquire or prior to a change in the use of any real property within its jurisdiction. He may proceed without giving such notice where he determines that it would have an adverse impact on the proposed purchase. In such situations, upon completion of the acquisition, he must immediately notify the appropriate local government of the acquisition and of the proposed use of such property. Section 804(b) refers to the acquisition or change of use of any real property situated in an urban area as a site for public guilding. Under this section, the Administrator shall, to the extent he determines practicable, consider all objections made by a local government because of possible conflicts with its zoning regulations or planning objectives. The Administrator shall, to the extent he determines practicable, comply in such action with the local zoning regulations and planning development objectives of the unit of the affected local government. Section 805 provides that the procedures described in sections 803 and 804 may be waived during any period of national emergency proclaimed by the President. Section 806 defines the terms "units of general local government." "urban areas," and "comprehensive planning" as they are used in this title. The definition of "unit of general local government" in section 806 (a) is identical with that found in section 104. The definition of "urban area" in section 806(b) is unique to this act and is geared to meeting the special objectives of this title. The definition of "comprehensive planning" in section 806 (c) is similar but not identical to the one in section 109; the differences are to emphasize the local, GENERAL STATEMENT The committee recommends this measure as a means to make stronger and more vital our State and local governments and to improve and make smoother their interaction with the Federal Government. This is an area in which much needs to be done. This bill is a reasonable first step. There are now in operation over 400 separate categorical authorizations for Federal grant-in-aid programs to State and local governments. These programs are administered by 18 Federal departments and agencies amounting to more than $20.3 billion for fiscal year 1969. Carrying out the intention of Congress that these vast funds be dispensed efficiently and economically is obviously very difficult under present arrangements. The Advisory Commission on Intergovernmental Relations has informed us that: This extraordinary expansion in the dollar amounts and number of grants-in-aid demonstrates beyond any doubt the complete acceptance of the partnership principle by Congress and the administration as the correct approach to effective intergovernmental relations. The expansion in the number, variety, and eligible recipients of grant programs, however, has generated serious management difficulties. A "communications gap," coordination difficulties, disjointed planning efforts, and rigid and frequently conflicting administrative and other requirements are but a few of the fallout problems that have arisen. This committee believes that the enacemtnt of this measure would substantially assist in correcting the problems here outlined and presented in detail in our hearings. We consider it understandable that a Governor and the State legislature be informed, upon request, of the Federal grants being channeled into the State and its political subdivisions. With approximately 17 percent of total State and local revenues coming from Federal sources, sound planning and budgeting on the State level dictate the necessity of such information. Sound management would also seem to dictate that a Governor be able to reorganize his State's administrative structure and, therefore, not be prevented from doing so by a rigid single agency system for receiving Federal funds. The committee sees real advantages for the States in being able to deposit grant funds with other State funds rather than in separate accounts as now required. The financial information that the granting agency may need from time to time can be quickly provided by modern accounting procedures and the use of computers. Other controls which may be necessary can be imposed. Likewise, by scheduling the transfer of funds to the States in a way that will not allow long periods before they are used should produce more practical results and prevent any windfalls. The recently adopted letter of credit procedure will aid in accomplishing these objectives. At the suggestion of the General Accounting Office, we declined to waive the requirement that the States be held accountable for interest earned on grant funds pending their disbursement, although we expect that the amount of such interest in the future should be rather small. Federal agencies should, of course, be able to provide technical services to State and local governments and much of this is already being done. This bill enlarges present arrangements by allowing the agencies to be reimbursed for such services thereby removing an important inhibiting factor. We did not agree that the reimbursements be placed in the appropriation account of the disbursing agency but rather, as suggested by the Comptroller General, be deposited to miscellaneous receipts of the Treasury. The bill contains safeguards against any unwarranted competition by Federal agencies with private industry. The committee is fully in accord with the idea of coordination of policy and administration of grant programs. We, therefore, give to the President the authority to issue rules and regulations that will aid in achieving this purpose. Originally, this authority was to be limited to programs in urban areas where many of the programs are concentrated and the greatest need for coordination is found. We were convinced, however, that with the growing number of Federal programs directed to rural areas and the inevitable overlapping and duplication that follow, the policies established in title IV should be applied to rural areas as well. The title was rewritten accordingly. The coordination which we aim for will not only affect the various Federal agencies involved in planning and administration but every effort should be made to take into account the viewpoints and objectives of State, local, and regional planning. The provisions on the acquisition, use and disposal of Federal land is another means to undergird local government zoning and planning. We expect that this type of cooperation between the Federal land holding agency and the community in which the land is located will produce great advantages for the locality without diminishing the sovereignty of the Federal Government. Many difficulties in the relations between our Federal Government and the States and localities still remain but we consider this bill a major advance toward obtaining the harmony among the various elements of our Federal system demanded by the needs of a growing nation. DEPARTMENTAL REPORTS STATEMENT OF PHILLIP S. HUGHES, DEPUTY DIRECTOR, BUREAU OF THE BUDGET, JUNE 12, 1968 Mr. Chairman and members of the committee, we are appearing today in support of H.R. 16718, the "Intergovernmental Cooperation Act of 1968," which was introduced by the chairman of the subcommittee and cosponsored by Mr. Erlenborn and which has as its principal aim improving the relationships between and among the Federal, State, and local governmental units in our Federal system and, hence, the quality of American government. The Bureau of the Budget has already reported on the other intergovernmental cooperation act proposals pending before the subcommittee and our testimony today is directed toward the provisions of H.R. 16718. Last year the Advisory Commission on Intergovernmental Relations requested our assistance in developing an intergovernmental cooperation act. After discussions with the various affected Federal agencies and with the Advisory Commission, agreement was reached on a measure transmitted by the ACIR containing five titles, all of which are included in the bill as introduced by the chairman and on which we are testifying. The titles of H.R. 16718 are designed to Achieve the fullest cooperation and coordination of activities among the levels of government in order to improve the operation of our Federal system in an increasingly complex society; Improve the administration of grants-in-aid to the States; Permit provision of reimbursable technical services to State and local governments; Establish coordinated intergovernmental policy and administration of grants and loans for urban development; and Provide for the acquisition, use, and disposition of land within urban areas by Federal agencies in conformity with local govern ment programs. Previous Bureau testimony before this committee in 1966 stressed the increasing importance of cooperative federalism as expressed in the extent to which Federal financial assistance to State and local governments for matters of national concern has become a major factor in the management of Government affairs in the country. To be specific, in the fiscal year 1969, the total of Federal grant programs dealing with national goals in a joint endeavor by Federal, State, and local units of government will exceed $20 billion. In that fiscal period, such Federal financial assistance to State and local governments under existing and proposed programs will total an estimated $20.3 billion, of which there will be net expenditures of $15.5 from regular budget accounts and $4.8 from the highway and unemployment trust funds. In 10 years, total Federal aid will have more than tripled, rising from $6.7 billion in 1959 to an anticipated $20.3 billion in 1969. It is estimated that, in the same decade, expenditures by State and local funds also will have more than doubled. The fastest growing grants are those to advance the war on poverty, to provide decent medical care for the needy, to improve the facilities and services in our urban centers, and to upgrade the elementary and secondary educational opportunities available to children of lowincome families. Total aids for metropolitan or urban areas have risen from $4 billion in 1961 to an estimated $12 billion in 1969. Thus, Federal aids benefiting urban areas have grown by about $8 billion-nearly tripling in less than a decade. The effective administration of Federal aid programs has received increasing attention in the last several years. The Bureau's concern has been both with the budgetary impact of grant expenditures, and with the means of coordinating the growing number of grant programs as well as devising measures for the more effective management of cooperatively financed Federal programs. I intend now to turn to discussion of the individual titles of the bill. Title I deals solely with definitions which apply to the other four titles and on which we have no comment. Title II calls for the improved administration of grants-in-aid to the States. It authorizes full information to the Governors and State |