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(B) changes designed to strengthen local government in metropolitan areas, as by

(i) liberalizing municipal annexation of unincorporated areas;

(ii) discouraging new incorporations not meeting minimum standards of total population and population density;

(iii) authorizing city-county consolidation, or transfers of specified functions between municipalities and counties;

(iv) authorizing intergovernmental contracts for the provision of services;

(v) authorizing municipalities to exercise extra territorial planning, zoning, and subdivision control over unincorporated areas not subject to effective county regulation;

(vi) restricting zoning authority in metropolitan areas to metropolitan units, to larger municipalities, to counties, or to the State, in order to prevent zoning by smaller municipalities which excludes housing for lower income families;

(vii) authorizing the formation of metropolitan councils of government and other regional governing bodies;

(viii) authorizing the establishment by the State, by local governmental bodies, or by the voters of the area directly, of metropolitan area study commissions to develop proposals to improve and coordinate local governmental structure and services, to permit sideby-side areawide and local governments, or to permit consolidation of municipalities; to implement such proposals, either directly or by presenting them to the voters of the area; and to present to the voters of the area such proposals;

(ix) authorizing the formation of metropolitan planning agencies to make recommendations to local governments concerning such matters as land use, zoning, building regulations, and capital improvements; and

(x) furnishing State financial and technical assistance to metropolitan areas for such matters as planning, building codes, urban renewal, consolidation, and local government and finance; and (C) changes designed to make local government more responsive and democratic by decentralizing power and functions back to the neighbor

hood wherever possible. (c) States may undertake the activities set forth in section 905 with respect to State governments or on behalf of localities or groups of localities, including areawide agencies, within the State. States also may make grants to localities or groups of localities, including areawide agencies, to support activities set forth in section 905, using funds received under this title.

PROGRAM ACTIVITIES

SEC. 905. In general, activities carried on in formulating, or as part of, a planning and management program, which may qualify for assistance as provided in this title, include the following:

(1) improving governmental systems and operations including revenue and resource allocation systems and methods for obtaining effective public participation in policy decisions;

(2) improving governmental structures, authorities, and coordinating mechanisms for dealing with the economic, social, and environmental complexities of modern society, including expansion of the role of elected executive officials and general units of government;

(3) establishing objectives, evaluating programs for achieving these objectives, and providing for program balance and coordination in response to State and local needs and priorities;

(4) formulating policies and plans governing the use, development, and conservation of land, and developing and carrying out supporting or implementing procedures;

(5) identifying and evaluating needs for housing, facilities, and services, and formulating specific programs for meeting the needs so identified;

(6) providing (directly or through grants or contracts) planning, technical, assistance, information, or advisory services to communities and agencies needing such assistance or services in connection with activities related to the purpose of this title;

(7) participating in organizations for joint or common governmental or governmental and private action, in solving problems of community revitalization and growth; and

(8) other activities or projects, consistent with the purpose of this title, which pertain to the coordination, regulation, modernization, or improved implementation, management, or control of governmental functions.

AUTHORITY TO MAKE GRANTS

SEC. 906. (a) The Secretary may make grants, as provided in this section, to assist States and localities in formulating planning and management programs and carrying out the activities set forth in section 905. In making the initial distribution of funds among States and localities, the Secretary should take into consideration such factors as the applicant's population, social and economic conditions special opportunities to improve the workings of government, unique developmental problems, and other factors consistent with the purpose of this title. In determining whether and on what conditions to continue assistance to any program initially approved, the Secretary shall consider the degree to which previous assistance has been effectively used by the applicant State or local government.

(b) Grants may be made under this section to States and cities and, where consistent with the provisions of State planning and management programs or where the Secretary finds it necessary for carrying out the purpose of this title, to other governmental subdivisions, and to metropolitan, regional, or other governmental agencies.

(c) The Secretary shall not require any matching or other expenditure of State or local funds as a condition to making grants under this title.

(d) There is authorized to be appropriated for grants under this section not to exceed $150,000,000 for the fiscal year ending June 30, 1973, and $150,000,000 for the fiscal year ending June 30, 1974. Of the aggregate amount so appropriated, $25,000,000 shall be available only for grants with respect to activities described in section 904(b), and $60,000,000 shall be available only for grants with respect to the development of the housing element described in section 903(d). Amounts appropriated for any fiscal year under the first sentence of this subsection shall remain available until expended, and amounts authorized but not appropriated for any fiscal year under such sentence shall be available for appropriation for any subsequent fiscal year ending on or before June 30, 1975.

CONDITIONS AND ADMINISTRATION OF GRANTS

SEC. 907. Grants made under this title may be used, subject to regulations and conditions prescribed by the Secretary, for any activities made eligible by the provisions of this title; but such regulations shall provide that grant assistance not be used to defray the cost of the acquisition, construction, repair, or rehabilitation of, or the preparation of engineering drawings or similar detailed specifications for, specific housing, capital facilities, or public works projects.

INTERSTATE AGREEMENTS

SEC. 908. The consent of the Congress is hereby given to any two or more States to enter into agreements or compacts, not in conflict with any law of the United States, for cooperative effort and mutual assistance in support of planning and management programs adopted under this title as they pertain to interstate areas and to localities within such States, and to establish such agencies, joint or otherwise, as they may deem desirable for making such agreement and compacts effective.

FEDERAL CONSULTATION AND COOPERATION Sec. 909. (a) The Secretary shall consult with the heads of other Federal departments and agencies having responsibilities related to the purpose of this title, including responsibilities connected with the economic development of rural and depressed areas, and the protection and enhancement of the Nation's natural environment, with respect to (1) general standards, policies, and procedures to be followed in the administration of this title, and (2) particular grant actions or approvals which the Secretary believes to be of special interest or concern to one or more of such departme its and agencies.

(b) Funds made available under any Federal assistance program for projects or activities approved as part of, or in furtherance of, a planning and management program assisted under this title may be used jointly with funds made available for such projects or activities under any other Federal assistance program, subject to regulations prescribed by the President. Such regulations may include provisions for common technical or administrative requirements where varying or conflicting provisions of law or regulations would otherwise apply, for establishing joint management funds and common non-Federal shares, and for special agreements, or delegations of authority, among different Federal agencies in connection with the supervision or administration of assistance. Such regulations shall in any case include appropriate criteria and procedures to assure that any special authorities conferred, which are not otherwise provided for by law, shall be employed only as necessary to promote effective and efficient administration and in a manner consistent with the protection of the Federal interest and program purposes or statutory requirements of a substantive nature. For purposes of this section, the term “Federal assistance program” shall have the same meaning as under the Intergovernmental Cooperation Act of 1968.

(c) The Secretary may, as necessary or appropriate and with the approval of the President, delegate any of his powers under this title to the heads of other Federal agencies and authorize the redelegation thereof, subject to such conditions or provisions as may be appropriate to assure effective coordination between the powers so delegated and other powers or functions retained by the Secretary.

TECHNICAL ASSISTANCE

SEC. 910. (a) The Secretary may provide, directly or through contracts, grants, or other arrangements, technical assistance in the formulation or implementation of planning and management programs.

(b) Grant funds made available under this title may be used, subject to such limitations as the Secretary may prescribe, for the purpose of procuring specialized or technical services available pursuant to section 302 of the Intergovernmental Cooperation Act of 1968, and the Secretary is authorized directly to procure such services on behalf of any State or political subdivision which could receive or participate in assistance provided under this title, and the heads of other Federal agencies are authorized to provide such services.

REPEALING AND TRANSITION PROVISIONS

SEC. 911. (a) In addition to amounts authorized and appropriated under section 906, appropriations available for carrying out section 701 of the Housing Act of 1954 shall be available until expended for the purpose of carrying out this title. The provisions of this title shall be effective, in whole or in part, at such date or dates as the Secretary of Housing and Urban Development shall prescribe and the Secretary shall establish procedures for the orderly transfer of Federal assistance activities from the authority of section 701 of the Housing Act of 1954. Effective upon the completion of such transfer, section 701 of the Housing Act of 1954 is repealed.

(b) Title IX of the Demonstration Cities and Metropolitan Development Act of 1966 is hereby repealed.

(H.R. 9331, 92d Cong., first sess.) À BILL To consolidate, simplify, and improve laws relating to housing and housing assistance

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 “Housing Consolidation and Simplification Act of 1971”.

TITLE 1MORTGAGE CREDIT ASSISTANCE

CONSOLIDATION AND REVISION OF MORTGAGE INSURANCE AUTHORITIES

Sec. 101. The provisions of this section which follow shall be effective as provided in section 102 and may be cited as the “Revised National Housing Act”.

REVISED NATIONAL HOUSING ACT

TITLE I-GENERAL AUTHORITY

DEFINITIONS

SECTION 1. As used in this Act

(a) The term “first mortgage” means such classes of first liens as are commonly given to secure advances on, or the unpaid purchase price of, real estate, under the laws of the State in which the real estate is located, together with the credit instruments, if any, secured thereby.

(b) The term "mortgage” means a first mortgage on real estate in fee simple, or on a leasehold (1) under a lease for not less than ninety-nine years which is renewable or (2) under a lease having a period of not less than fifty years to run from the date the mortgage was executed.

(c) the term “mortgagee” includes the original lender under a mortgage, and its successors and assigns approved by the Secretary:

(d) The term “mortgagor” includes the original borrower under a mortgage, and its successors and assigns.

(e) The term “home mortgage” means a mortgage involving a one- to fourfamily residence or a one-family unit in a condominium.

(f) The term "project mortgage” means a mortgage involving multifamily housing, a land development project, or a health facility:

(g) The term “maturity date” means the date on which the mortgage indebtedness would be extinguished if paid in accordance with the payments provided for in the mortgage.

(h) The term "condominium” means a multiunit housing project which is subject to a plan of family unit ownership acceptable to the Secretary under which each dwelling unit is individually owned and each such owner holds an undivided interest in the common areas and facilities which serve the project.

(i) The term "experimental property” means property which involves the utilization and testing of advanced technology in property design, materials, or construction, or experimental property standards for neighborhood design, which will provide data or experience which the Secretary deems to be significant in reducing building costs or improving building standards, quality, livability, or durability, or improving neighborhood design.

(j) The term "advances” means insured mortgage proceeds advanced during construction or rehabilitation. In addition to being made for the purpose of financing improvements to the property and the purchase of materials and building components delivered to the property, such insured proceeds may, with the approval of the Secretary, be advanced for the purpose of providing funds to cover the cost of materials and building components which have been purchased for use in the construction or rehabilitation of a project and are to become a part of the mortgaged property, but which are located at a site other than the mortgaged property.

(k) The term "State" includes the several States and Puerto Rico, the District of Columbia, Guam, and the Virgin Islands. Such term may also include American Samoa, the Canal Zone, Midway Island, and the Trust Territory of the Pacific Islands where the Secretary determines the use of particular mortgage insurance programs are feasible and desirable.

(1) The term “Secretary” means the Secretary of Housing and Urban Development.

GENERAL INSURANCE AUTHORITY

SEC. 2. (a) To be eligible for insurance under this Act a mortgage or loan shall have been made by, and be held by, a mortgagee or lender approved by the Secretary as responsible and able to service the mortgate or loan properly.

(b) The Secretary is authorized, upon application by the mortgagee or lender, to insure mortgages and loans, upon such terms and conditions as he may prescribe, in accordance with the provisions of this Act, and to make commitments for the insuring of such mortgages and loans prior to the date of their execution or disbursement thereon. At any time prior to final endorsement for insurance, the Secretary may amend, extend, or increase the amount of any commitment, but the mortgage or loan as finally endorsed for insurance must be eligible for insurance under the provisions of this Act in effect at the time of such final endorsement.

(c) To be eligible for insurance under this Act, the mortgage transaction shall be determined by the Secretary to be an insurable risk, except that the Secretary may accept for insurance as a special risk a mortgage transaction involving assistance payments, experimental property, property located in an older and declining area where there is a reasonable prospect for revitalization, or singlefamily housing for employees of research or development installations where it is established to the satisfaction of the Secretary that there is a special need for such housing.

FLEXIBLE MORTGAGE AMOUNTS

SEC. 3. (a) The Secretary shall not insure a mortgage covering property in any area which exceeds, for that part of the property attributable to dwelling use, the appropriate prototype cost for the area (i) by more than 10 per centum in the case

of a mortgage insured under section 402 or section 502 and (ii) by more than 100 per centum, or such lower per centum in any area as the Secretary determines to be appropriate to prevent the diversion of mortgage credit from moderate cost housing, in the case of a mortgaged insured under section 401 or section 501.

(b) Prototype costs shall be determined at least annually by the Secretary on the basis of (i) his estimate of the construction costs of new dwelling units of various sizes and types in the area suitable for occupancy by persons assisted under sections 402 and 502, and (ii) his determination of reasonable allowances for the cost of land and site improvements. The Secretary in determining an area's prototype costs shall take into account the extra durability required for economical maintenance of assisted housing, and the provision of amenities designed to guarantee safe and healthy family life and neighborhood environment. Further, in the development of such prototypes, emphasis should be given to encouraging good design as an essential component of such housing and to producing housing which will be of such quality as to reflect the architectural standards of the neighborhood and community. The prototype costs for any area shall become effective upon the date of publication in the Federal Register.

(c) As used in this section the term "construction costs” means those cost items which are normally reflected in the amount of a home mortgage or multifamily mortgage insured under section 402 or section 502, except the costs of land and site improvements.

INTEREST RATES

SEC. 4. The Secretary shall from time to time prescribe the maximum interest rates which mortgages or loans eligible for insurance under this Act may bear. The rates prescribed shall be those rates which the Secretary finds necessary to meet the mortgage or loan market. Interest rate limitations prescribed pursuant to this authority may differ for mortgages or loans to be insured under different sections of this Act, or may differ to take into account differences between mortgages or loans insured under the same section.

WATER AND SEWER FACILITIES

Sec. 5. No mortgage which covers new construction shall be approved for insurance under this Act if the mortgaged property includes housing which is not served by a public or adequate private community water and sewerage system, unless the property is situated in an area where the establishment of such a system is determined by the Secretary not to be economically feasible and where the Secretary determines that the absence of such a system will not create a significant environmental hazard. The economic feasibility of establishing such public or adequate private community water and sewerage systems shall be determined without regard to whether such establishment is authorized by law or is subject to approval by one or more local governments or public bodies.

APPROVAL OF TECHNICALLY SUITABLE MATERIALS

SEC. 6. The Secretary shall adopt a uniform procedure for the acceptance of materials and products to be used in structures approved for mortgages or loans insured under this Act. Under such procedure any material or product which the Secretary finds is technically suitable for the use proposed shall be accepted. Acceptance of a material or product as technically suitable shall not be deemed to restrict the discretion of the Secretary to determine that a structure, with respect to which a mortgage is executed, is an insurable or special risk.

INSURANCE CONTRACT INCONTESTABILITY

Sec. 7. Any contract of insurance executed by the Secretary under the provisions of titles IV and V shall be conclusive evidence of the eligibility of the loan or mortgage for insurance. The validity of any contract of insurance so executed shall be incontestable in the hands of an approved financial institution or approved mortgagee from the date of the execution of such contract, except for fraud or misrepresentation on the part of such financial institution or mortgagee.

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