to State and local governmental bodies in developing solutions to such problems. Such assistance shall include, whenever the Secretary deems it appropriate, the dissemination to interested bodies of the results of the studies undertaken pursuant to this section.

(b) The Secretary shall from time to time make such recommendations to the Congress, as a result of the studies to be undertaken under this section and after consultation with appropriate representatives of State and local governments, as he shall determine to be appropriate.

(c) As used in this section the term "State" includes the District of Columbia and the Commonwealth of Puerto Rico.

ABOLITIONS

SEC. 5. The Housing and Home Finance Agency (exclusive of the agencies thereof transferred by section 3 of this Act) and the Offices of the Housing and Home Finance Administrator and the Deputy Housing and Home Finance Administrator are hereby abolished. The Secretary shall make such provisions as may be necessary in order to terminate any outstanding affairs of the agencies and offices abolished by this section.

ADVISORY COMMITTEES

SEC. 6. The Secretary may establish such advisory committees on urban affairs as he may determine to be desirable and in furtherance of the purposes of this Act. The members of any such committee shall be reimbursed for actual travel and subsistence expenses incurred in attending meetings of the committee.

AMENDMENT

SEC. 7. Section 158 of the Revised Statutes of the United States, as amended (5 U.S.C. 1), is amended by adding at the end thereof the following: "Eleventh: The Department of Housing and Urban Affairs."

REPORT

SEC. 8. The Secretary shall cause to be prepared, published, and transmitted to the Congress an annual report of the activities and accomplishments of the Department.

INTERIM APPOINTMENTS

SEC. 9. Pending the initial appointment of officers of the Department, the functions of any such officer may be performed temporarily by such officer of the Housing and Home Finance Agency, including its constituent agencies, as the President shall designate.

DELEGATION OF FUNCTIONS AND INCIDENTAL TRANSFERS

SEC. 10. (a) The Secretary may from time to time make such provision as he deems appropriate authorizing the performance of any of his functions by any other official or any employee, agency, or board of the Department, except as provided in section 2 and except functions which the Housing and Home Finance Administrator is expressly prohibited by law from delegating. No change in the organization or functions of the Federal National Mortgage Association in connection with its secondary market operations under the Federal National Mortgage Association Charter Act shall be made under this Act unless the Secretary finds that the change will not adversely affect any rights of owners of outstanding common stock issued under such Charter Act.

(b) To the extent that carrying out the provisions of subsection (a) of this section involves the assignment of major program functions or major groups of program functions to an organizational unit of the Department, now or hereafter existing, the Secretary shall, to the extent he deems practicable, give appropriate advance public notice of the delegation of functions proposed to be made by him and shall afford appropriate opportunity for interested persons or groups to place before the Department their views with respect to such proposed delegations.

(c) The Secretary may from time to time effect, within the Department, such transfers of personnel, records, property, and unexpended balances (available or to be made available) of appropriations, allocations, or other funds of the

Secretary as he deems necessary to carry out the provisions of this Act or transfers of functions hereunder, but such funds may be used only for the purposes for which they were originally made available.

SAVING PROVISIONS

SEC. 11. (a) (1) Any statute enacted, and any regulation or other action made, prescribed, issued, granted, or performed before the effective date of this Act in respect of or by any office, agency, board, organizational unit, or function affected by this Act shall, except to the extent rescinded, modified, superseded, or made inapplicable by or under authority of law or by the abolition of a function, have the same effect as if this Act had not been enacted; but where any such statute, regulation, or other action has vested the function in the office, agency, board, or other organizational unit from which it is removed by this Act, such function shall, insofar as it is to be exercised after the Act becomes effective, be considered as vested in the Secretary. With respect to any function transferred by or under this Act and exercised hereafter, reference in another Federal statute to the Housing and Home Finance Agency or to any office, officer, agency, board, or other organizational unit therein shall be deemed to mean the Secretary.

(2) As used in paragraph (1) of this subsection the term "regulation or other action" means any regulation, rule, order, policy, determination, directive, authorization, permit, privilege, requirement, designation, or other action.

(b) No suit, action, or other proceeding lawfully commenced by or against the Housing and Home Finance Administrator or other officer of the United States, in his official capacity or in relation to the discharge of his official duties, shall abate by reason of the provisions of this Act, but the court may, on motion or supplemental petition filed at any time within twelve months after this Act takes effect, showing a necessity for a survival of such suit, action, or other proceeding to obtain a settlement of the questions involved, allow the same to be maintained by or against the successor of such Administrator or officer under this Act.

OFFICE BUILDING

SEC. 12. (a) The Secretary is authorized to construct, maintain, and operate an office building in or near the District of Columbia to serve as the principal office of the Department at not to exceed a total cost of $40,000,000. For such purposes, the Secretary is authorized to act through the Administrator of General Services. As used in this section the term "construction" shall include the preparation of plans and specifications, the acquisition of a site (by purchase, eminent domain, or otherwise), site clearance and improvement, and the erection of an office building and related structures and facilities.

(b) The Secretary is hereby authorized to employ, from funds in the Mutual Mortgage Insurance Fund created by section 202 of the National Housing Act, such sums as may be needed for construction under subsection (a). The Secretary shall deposit such funds in a trust fund to be administered solely for such construction. From receipts and income held by the Secretary under this section after current operating and maintenance expenditures hereunder, the Secretary shall make such periodic payments to the Mutual Mortgage Insurance Fund as the Secretary determines will be adequate to reimburse the Fund for advances hereunder within a period of thirty years, with interest at 32 per centum per annum on the unpaid balance. All property acquired or constructed under this section shall remain an asset of the trust fund created hereunder until the Mutual Mortgage Insurance Fund is reimbursed with interest, as herein provided.

(c) The Administrator of General Services, in consultation with the Secretary, shall establish reasonable charges for use and occupancy of the property or any portion thereof by the Department. Funds available for the expenses of the Department, including the constituents thereof, shall be available for the payment of such charges. The Secretary, with the approval of the Administrator of General Services, shall lease to others such of the land, appurtenances and building space as he shall determine is not currently required for the needs of the Department.

EFFECTIVE DATE

SEC. 13. The provisions of this Act shall take effect on the first day of the third calendar month following the month in which this Act is enacted.

COMPLEXITY OF URBAN PROBLEMS

Senator HUMPHREY. Urban problems are becoming highly complex.. We hope that in these present hearings we can elicit information and facts surrounding the seriousness of metropolitan problems. We hope to clearly establish the part which the Federal Government can and should play in helping to solve the problems, and we also expect to develop full information as to the part which the cities and local governments can and should play in helping find practical answers to these problems, so that a fully coordinated program will be set up under the proposed new department.

At the present time, over 70 percent of our population in this Nation resides in urban areas. Many of these cities, like Topsy, have "jest growed."

Indications are that they will continue to grow, and grow rapidly. Can this growth be made orderly? Can it be guided so that city dwellers will have the benefits of recreation and good housing? Will industrial areas be planned? Will adequate open space be preserved? Will transportation be coordinated? Will air and water pollution be controlled?

These and many other problems will plague city fathers and city planners in the next 50 years, as new sections of our Nation turn from rural to urban areas.

At the present time we find many of our cities sprawling across twoor more counties, and, in a number of instances, across the boundary lines of two or more States. A multiplicity of jurisdictions has resulted from fragmenting our metropolitan areas into literally hundreds of local governments.

Needless to say, this causes considerable difficulty in providing orderly service to all sections of a metropolitan area and it also causes an uneven tax situation, along with the many other complications which result from overlap of government authority.

There is considerable opinion that the orderly solution to these difficulties in urban planning and growth can best result from the establishment of a Department of Urban Affairs and Housing. We hope that the many experts who are appearing as witnesses here can expound on these matters and bring to the committee the information necessary to form a correct judgment on the need for enactment of this legislation.

In order that the record of this hearing may be as complete as possible, I would like to have printed at this point the letter which President John F. Kennedy sent to the President of the Senate, the Honorable Lyndon Johnson, Vice President of the United States. (The letter referred to follows:)

Hon. LYNDON B. JOHNSON,

President of the U.S. Senate,

Washington, D.C.

THE WHITE HOUSE, Washington, April 18, 1961.

DEAR MR. PRESIDENT: I am transmitting for consideration by the Congress draft legislation to carry out the recommendation in my March 9 message on housing and community development calling for the creation of a new Cabinet Department of Urban Affairs and Housing.

Two problems standing near the top of our national priority lists are first, preventing the appalling deterioration of many of our country's urban areas and rehabilitating the cities of our Nation which currently contain 70 percent

of our people-a figure that is constantly growing-and second, insuring the availability of adequate housing for all segments of our population. Since the National Housing Agency was established in 1942, the activities of the Federal Government in housing and in working with States and local communities in the rebuilding of our urban areas and in preventing their deterioration has increased steadily. The importance of this area of Federal activity merits recognition by the establishment of the Department of Urban Affairs and Housing. Thus, the new Secretary of Urban Affairs and Housing will be in a position to present the Nation's housing and metropolitan development needs to the Cabinet and will by virtue of his position provide the necessary leadership in coordinating the many Federal programs in these fields.

In addition to the draft bill, I am enclosing a letter from the Director of the Bureau of the Budget describing the legislation in detail. A letter identical to this one is being sent to the Speaker of the House of Representatives.

I hope that prompt action can be scheduled on this important legislation and that the Congress will act favorably on the proposal.

Sincerely,

JOHN F. KENNEDY.

Senator HUMPHREY. Following that letter, I would like to have included in these hearings a copy of the letter from the Director of the Bureau of the Budget, David E. Bell, to President Kennedy when he transmitted a copy of this administration's proposed legislation. (The letter referred to follows:)

EXECUTIVE OFFICE OF THE PRESIDENT,

BUREAU OF THE BUDGET, Washington, D.C., April 17, 1961.

The PRESIDENT OF THE UNITED STATES. MY DEAR MR. PRESIDENT: There is enclosed herewith a draft of a bill to establish a Department of Urban Affairs and Housing, and for other purposes. The bill carries out your recommendations for the creation within the executive branch of a new Cabinet-rank department to administer Federal programs for community development and housing contained in the state of the Union message dated January 30, 1961, and the message on "Our Nation's Housing" dated March 9, 1961.

The purpose of this legislation is to provide for full recognition and consideration of the problems resulting from the rapid growth in the United States of our urban and metropolitan areas and needs. Establishment of the Department of Urban Affairs and Housing will help in achieving consistent and flexible administration of the Government's community development and housing programs, give more effective leadership within the executive branch to the coordination of Federal activities affecting urban and metropolitan growth and development, and foster consultation among Federal, State, and local officials to contribute to the solution of urban and metropolitan development problems.

The bill sets forth a new "Declaration of National Urban Affairs and Housing Policy," which states that the welfare and security of the Nation requires the sound and orderly growth and development of the Nation's urban communities. It is declared that the national policy shall be to assist communities in developing and carrying out local programs to meet the problems resulting from growth and change. Included would be appropriate Federal concern with and leadership in comprehensive community planning, eliminating slums and blighted areas, and providing decent homes in a suitable living environment for the Nation's population, providing adequate industrial and commercial locations, developing effective urban mass transportation, and providing public and recreational facilities and open spaces around our major population centers.

To help achieve this national policy, the bill establishes a new executive department, the Department of Urban Affairs and Housing, to be headed by a Secretary appointed by the President with Senate confirmation. The Department would be under the supervision and direction of the Secretary. An Under Secretary, three Assistant Secretaries, a General Counsel and an Administrative Assistant Secretary are also provided for and would perform duties prescribed by the Secretary. Responsibility would be vested in the Secretary for all functions currently performed by the Housing and Home Finance Administrator.

The proposed legislation directs the Secretary to conduct and make available continuing comprehensive studies of urban development and housing. He would

advise the President with respect to Federal programs contributing to the achievement of the urban affairs and housing policy set forth in the bill, and would develop and recommend to the President policies for fostering the orderly growth and development of the Nation's urban areas. At the direction of the President, the Secretary would be expected to exercise leadership in coordinating Federal activities affecting urban areas and provide technical assistance and information concerning these matters to State and local governments. The Secretary would further be responsible for encouraging comprehensive planning by State and local governments in order to secure improved coordination of Federal, State, and community development activities at the local level.

The bill provides for the transfer to and vesting in the Secretary of the functions, powers, and duties of the Housing and Home Finance Agency, including the Federal Housing Administration and Public Housing Administration. The personnel, property, funds, and other resources of those agencies would be transferred along with the functions. The Secretary would have all the functions, powers, and duties of the Administrator of HHFA for administering the programs of the Urban Renewal Administration and the Community Facilities Administration, and those authorities now vested by law in the Commissioners of the Federal Housing Administration and the Public Housing Administration. Because of its peculiar corporate structure, the Federal National Mortgage Association would be transferred to the Department rather than to the Secretary, but the Secretary would be vested with the authorities now possessed by the Housing Administrator with respect to that constituent agency. The bill provides appropriate safeguards for the private owners of capital stock in the secondary market functions of the Federal National Mortgage Association.

The bill seeks to enable the Secretary to direct the Department's evolving and closely interrelated programs in a consistent and comprehensive manner by vesting in him authority to appoint the officers and employees of the new Department subject to civil service laws, determine, in the main, the internal organization of the Department, and delegate his functions to such officers and employees of the Department as he may designate. The Housing and Home Finance Agency, Federal Housing Administration, Public Housing Administration, the positions established by law in those units, and the National Housing Council, would be abolished.

The act creating the new Department makes provision for a deferred effective date and presidentially designated interim officers.

Respectfully yours,

DAVID E. BELL, Director.

EXECUTIVE COMMUNICATIONS

Senator HUMPHREY. I would like also to include in this section devoted to Executive communications a letter addressed to Senator John L. McClellan, chairman of the Committee on Government Operations, from the Advisory Commission on Intergovernmental Relations, and signed by Frank Bane, Chairman of the Commission. This letter is in reply to an inquiry from Senator McClellan in which he asked the Intergovernmental Relations Commission to report the results of the study which that group undertook on the general subject of metropolitan problems, and the establishment of a Department of Urban Affairs and Housing. The suggestions made therein should receive careful consideration of the Congress.

(The document referred to follows:)

ADVISORY COMMISSION ON INTERGOVERNMENTAL RELATIONS,
Washington, D.C., June 16, 1961.

Hon. JOHN L. MCCLELLAN,

Chairman, Committee on Government Operations,

U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN: This is in further reference to your letter of March 8, 1961, regarding the views of the Advisory Commission on Intergovernmental Relations with respect to the establishment of a Department of Urban Affairs. The views of the Commission on this subject are as follows:

The Commission, after careful consideration, views the issue of a Department of Urban Affairs as primarily a matter of the organization of the executive