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acres in the project. Provision .s made for a slight adjustment of this basic annual installment to take account of certain project lands which, by reason of their preproject water rights, have a lesser construction charge obligation. This basic annual installment will be varied by means of a formula which adjusts the annual installments either upward or downward, depending upon the gross crop returns of the project through the normal and percentage plan provided by the Reclamation Project Act of 1939 and for changes in the purchasing power of farm income through a parity factor related to the principal commodity groups affecting the project's economy. The repayment period, estimated at 70 years from 1950, may be either shortened or extended under the variable installment provisions of the contract, depending upon future project income, although it is expected that such change will be relatively minor.

All the district's contract obligations with the United States are completely restated in the proposed contract, it being framed to supersede the existing contracts. Provision is made for the reservation of the operation of Agency Valley Dam by the United States, as well as far the accumulation and maintenance of a reserve fund in the amount of $60,000 to meet extraordinary operation and maintenance costs. Other provisions to assure that the contract is carried out are also included, such as provisions for the denial of water in case of default, the employment of a competent manager by the district, a graduated scale for the collection of district operation and maintenance charges based upon water use in order to conserve the project water supply, the inspection of the project works and the keeping of proper books and records.

All now unpaid costs of project construction are included in the district's restated obligation of $4,852,000 including the cost of the land classification, economic surveys and related studies made in connection with the negotiation of the proposed contract. In addition, provision is made for the return of future costs of rehabilitation and betterment work in the amount of $50,000.

Enactment of S. 2089 will provide authority for the execution of the contract and will in addition repeal the now inappropriate provisions of special acts relating to repayment contracts for the project.

Irrigation facilities for the Prosser irrigation district, a portion of the Sunnyside division of the Yakima project, were constructed by the Bureau of Reclamation in 1918 and 1919. These facilities serve the lands of the district by pumping from the Sunnyside main canal and consist of 2 hydraulic pumping plants, 2 wood-stave penstocks, 3 wood-stave discharge lines, and 11 wood-stave siphons in addition to the necessary canals and laterals. Water was first made available to the district in 1919. The district operates and maintains the distribution system from the point from where water is diverted from the main Sunnyside canal to operate the two hydraulic pumps.

There are 2,163.18 acres in the district assessed as irrigable but usually only 1,650 to 1,800 acres are actually irrigated. For several years the district has owned 142 acres of the poorest land classed as irrigable, and it has not been irrigated. Although a detailed land classification survey of the area has not been made recently, it is expected that approximately this acreage will remain in district ownership. Most soils in the district respond well to proper soil-management practices.

The initial contract between the United States and the Prosser irrigation district, dated December 1, 1917, provided for construction of the irrigation system for the district, the costs of which, together with the proportionate costs of stored water, were to be repaid in 20 years. By supplemental contracts authorized by the Federal reclamation laws the pay-out period was increased to 40 years and the annual installments adjusted accordingly. Under these contracts the district's current obligation requires annual payments of $6,932.24 to retire the construction costs of approximately $270,000. In addition, the district contracted on January 22, 1945, for additional needed stored water at a cost of $18,750 to be repaid in 40 semiannual installments of $168.75 each. The present unpaid obligation of the district under both contracts is appr mately $115,000.

The district has a good record in meeting its contractual obligations to the United States. Until 1948 deferments have been granted only during the period in the early thirties when extensions on capital indebtedness charges were common throughout the Nation.

The current repayment problem in the district has been caused by the need for rehabilitation and replacement of badly deteriorated wood-stave pipe lines. These pipe lines, installed in 1918 and 1919, have deteriorated to such an extent that some emergency replacement or repairs have been necessray for the last several years in order to keep the system in operation. The district increased irrigation assessments in an attempt to secure funds needed to perform this emergency rehabilitation work as it arose, but soon found that even with an assessment on district lands of $15 an irrigable acre its funds were exhausted and approximately $10,000 in warrants were outstanding. In order to repair pipe lines as needed to keep the irrigation system in operation the district in 1947 borrowed $10,000 and in 1948 a like amount from the Department of Conservation and Development of the State of Washington, each loan to be repayable in 3 years at 2 percent interest. Borrowed capital, together with receipts from high irrigation assessments, provided funds to complete the most urgently needed repairs but the district still did not have sufficient money to complete the program of replacing and rehabilitating the system.

To meet this situation the district requested the Bureau of Reclamation to undertake the rehabilitation work and to make an investigation under section 7 of the Reclamation Project Act of 1939.

Such an investigation has been made and the proposed contract here reported on was negotiated with the district on the basis of the findings as to the repayment ability of the district water users The rehabilitation work estimated at not to exceed $100,000 is being done pursuant to the authorization provided in the Interior Department Appropriation Act, 1919. After considering all pertinent factors relating to farm costs and income, including a reasonable living allowance, it was found that under normal conditions the water users have an ability to pay a total of $7.35 per irrigable acre for water. Of this amount, after deducting the estimated costs of operation and maintenance, and a fixed assessment for the accumulation of a reserve fund, $3.35 per irrigable acre is available for repayment to the United States Accordingly, the proposed contract provides for the district to pay this amount on the 2,021 irrigable acres upon which assessments are normally paid, or a total basic installment of $6,770 annually. In order to take into account variation in the water users' repayment ability from year to year upon the basis of crop yields and prices, the contract provides for this basic annual installment to be varied in accordance with the normal and percentage plan of variation set out in the Reclamation Project Act of 1939 This variation will range between a floor of 15 percent of the basic annual installment and a ceiling of 175 percent of the basic annual installment. Provision is also made in the contract to adjust the installments due for the calendar years 1950 and 1951 to allow the district to complete its return of the moneys advanced by the State of Washington for emergency repairs In both those years, however, the district is to be required to make a small payment, in 1950 a payment of $937.50 covering the supplemental water charge for that year, and in 1951 the adjusted installment less $3,468 (the amount due the State of Washington) or a minimum of 15 percent of the basic annual installment, whichever is greater.

The proposed contract restates and supersedes all provisions of the prior contracts and consolidates into one principal obligation all the existing repayinent obligations of the district The district is to continue the operation of the distribution system and a provision is made for the district to accumulate and maintain a reserved operation and maintenance fund to meet in the future the rehabilitation problem with which it is now confronted. Also, the re-tated contract carries forward and continues the principal provisions of the previous contracts dealing with the establishment and maintenance of the board of control for the operation and maintenance of the main Sunnyside canal. The proposed contract contains the customary provisions to assure that the district will meet its obligations to the United States, including provisions for the repair and inspection of the irrigation works. the requirement to levy and collect required assessments to meet them, and provisions for the refusal of water in case of default.

At the basic annual installment of $6.770, and assuming that completion of the programed rehabilitation work will require the full $100,000 provided in the contract. all obligations of the district to the United States will be repaid in approximately 32 years from 1951 This represents an extension of the existing repayment period of about 18 years. The normal and percentage plan of varying the annual installments might result in either a lengthening or shortening of the pay-out period. but it is expected that any such variation would be relatively minor

Enactment of S. 2089 will provide authority for the execution of the proposed contract.

I have cetermined from detailed physica' and economic analyses that a contract under sections 3 and 4 of the Reclamation Project Act of 1939 would not be practicable and would not provide an economically sound adjustment of the

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repayment obligation with any of the s-x irrigation districts included in S, 2089. In my opinion, the contracts negotiated under authority of section 7 of the Reclamation Project Act of 1939, which S. 2089 would authorize me to execute for the United States, provide fair and equitable treatment of the repayment problems involved and are in keeping with the general purposes of that act.

The six contracts covered by S. 2089 are similar in general character to the six contracts approved Public Law 56 (81st ng.. Ist sess

The Committee on Public Lands unanimously recommends the enactment of H. R. 5184.

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JULY 6, 1949.-Ordered to be printed

Mr. SPENCE, from the committee of conference, submitted the following


(To accompany S 1070)

The committee of conference on the disagreeing votes of the two Houses on the amendment of the House to the bill (S. 1070) to establish a national housing objective and the policy to be followed in the attainment thereof, to provide Federal aid to assist slum-clearance projects and low-rent public housing projects initiated by local agencies, to provide for financial assistance by the Secretary of Agriculture for farm housing, and for other purposes, having met, after full and free conference, have agreed to recommend and do recommend to their respective Houses as follows:

That the Senate recede from its disagreement to the amendment of the House and agree to the same with an amendment as follows:

In lieu of the matter proposed to be inserted by the House amendment insert the following: That this Act may be cited as the "Housing Act of 1949".


Sec. 2. The Congress hereby declares that the general welfare ana security of the Nation and the health and living standards of its people require housing production and related community development sufficient to remedy the serious housing shortage, the elimination of substandara and other inadequate housing through the clearance of slums and blightea areas, and the realization as soon as feasibli ot the goal of a decent home and a suitable living environment for every Amerucan family, thus con tributing to the development and redevelopment of communities and to the advancement of the growth, wealth, and security of the Nation The Congress further declares that such production is necessary to enable the housing industry to make its full contribution toward an economy of marimum employment. production, and purchasing, power

The policy to be followed in attaining the national housing objective hereby established shall be: (1) prirate enterprise shall be encouraged to serve as large a part of the total need as it can: (2) governmental assistance shall be utilized where feasible to enable private enterprise to serve more of the total need; (3) appropriate local public bodies shall be encouraged and assisted to undertake positive programs of encouraging and assisting the development of well-planned, integrated residential neighborhoods, the development and redevelopment of communities, and the production, at lower costs, of housing of sound standards of design, construction, livability, and size for adequate family life; (4) governmental assistance to eliminate substandard and other inadequate housing through the clearance of slums and blighted areas, to facilitate community derelopment and redevelopivient, and to provide adequate housing for urban and rural nonfarm families with incomes so low that they are not being decently housed in new or existing housing shall be extended to those localities which estimate their own needs and demonstrate that these needs are not being met through reliance solely upon private enterprise, and without such aid; and (5) governmental assistance for decent, safe, and sanitary farm dwellings and related facilitres shall be extended where the farm owner demonstrates that he lacks sufficient resources to provide such housing on his own account and is unable to secure necessary credit for such housing from other sources on terms and conditions which he could reasonably be expected to fulfill. The Housing and Home Finance Agency and its constituent agencies, and any other departments or agencies of the Federal Government having powers, functions, or duties with respect to housing, shall exercise their powers, functions, and duties under this or any other law, consistently with the national housing policy declared by this Act and in such manner as will facilitate sustained progress in attaining the national housing objective hereby established, and in such manner as will encourage and assist (1) the production of housing of sound standards of design, construction, livability, and size for adequate family life; (2) the reduction of the costs of housing without sacrifice of such sound standards; (3) the use of new designs, materials, techniques, and methods in residential construction, the use of standardized dimensions and methods of assembly of home-building materials and equipment, and the increase of efficiency in residential construction and maintenance; (4) the development of well-planned, integrated, residential neighborhoods and the development and redevelopment of communities; and (5) the stabilization of the housing industry at a high annual volume residential construction.




Sec. 101. In extending financial assistance under this title, the Administrator shall

(a) give consideration to the extent to which appropriate local public bodies have undertaken positive programs (1) for encouraging housing cost reductions through the adoption, improvement, and modernization of building and other local codes and regulations so as to permit the use of appropriate new materials, techniques, and methods in land and residential planning, design, and construction, the increase of efficiency in residential construction, and the elimination of restrictive practices which unnecessarily increase housing costs, and (2) for preventing the spread or recurrence, in such community, of slums and blighted areas through the adoption, improve

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