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(c) Notes or other obligations issued by the Secretary 2 for amounts borrowed under this section shall bear interest 3 at a rate determined by the Secretary of the Treasury, tak4 ing into consideration the average market yield on outstand5 ing marketable obligations of the United States of compara6 ble maturities during the month preceding the issuance of 7 the notes or other obligations.

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(d) Moneys in the fund established under this Act 9 which the Secretary determines are not needed for the cur10 rent operations of the Department of Housing and Urban Development with respect to obligations of the Secretary

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12 under guarantee agreements entered into pursuant to this 13 Act shall be deposited by the Secretary with the Treasurer 14 of the United States to the credit of the fund or invested in 15 bonds or other obligations of, or in bonds or other obliga

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tions guaranteed as to principal and interest by, the United 17 States or any agency of the United States.

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19 SEC. 7. (a) Guarantee agreements made by the Secre20 tary under this Act may provide for payment of claims to 21 insured mortgagees in cash or debentures, or both.

22 (b) Debentures issued under this section shall be in 23 such form and denominations, shall be for such terms, shall 24 be subject to such conditions and shall include such provi

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1 sions for redemption, if any, as may be prescribed by the 2 Secretary with the approval of the Secretary of the Treasury. 3 (c) Debentures shall be dated as of such date as may be 4 provided for in the guarantee agreement and shall bear in5 terest at the rate in effect under regulations of the Secretary

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on the effective date of the guarantee agreement, which shall 7 be the same rate as that established by the Secretary under 8 section 602 (e) of the Revised National Housing Act. 9 (d) The principal and interest of the debentures shall be 10 subject to taxation (except surtaxes, estate, inheritance, and 11 gift taxes) in the same manner and to the same extent as ob12 ligations issued under the Second Liberty Bond Act. 13 (e) The debentures shall be redeemed and paid out of 14 the fund established by this Act and such fund shall be pri15 marily liable for such payment. They shall be fully and un16 conditionally guaranteed as to principal and interest by the 17 United States, and, notwithstanding any other provision of 18 law, the full faith and credit of the United States is pledged 19 to the payment of such debentures. Such guarantee shall be 20 expressed on the face of the debentures.

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CLAIMS AND JUDICIAL REVIEW

SEC. 8. (a) All claims against the Secretary under this

23 Act shall be submitted in accordance with the terms and con

24 ditions established by the Secretary.

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(b) Upon disallowance of any claim under color of 2 guarantee by the Secretary under this Act, or upon refusal

of the claimant to accept the amount allowed upon any such 4 claim, the claimant may institute an action against the Secre5 tary on such claim in an appropriate United States district 6 court. Any such action must be begun within one year after 7 the date upon which the claimant received written notice of final administrative action disallowing such claim or a portion thereof.

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(c) Upon payment of any claim under this Act, the 11 Secretary shall succeed to all of the rights of the claimant with 12 respect thereto.

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RECORDS, ANNUAL STATEMENTS, AND AUDITS

SEC. 9. (a) Any private mortgage insurer participating

a guarantee program established under this Act shall fur

nish the Secretary with such information as may be required 17 by the Secretary to carry out the purposes of this Act in such

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form as the Secretary shall prescribe and shall furnish a true and correct copy

of any

annual or other required statement

or amendment thereof submitted to a State insurance author

ity at the time filed with such State insurance authority. (b) The Secretary or duly authorized representative shall have access, for the purpose of investigation, audit, and examination, to any books, documents, papers, and records of

an eligible private mortgage insurer guaranteed by the Sec

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1 retary. The Secretary shall cooperate with the State insur

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ance authorities and use their examining facilities to the ex3 tent feasible.

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ADMINISTRATIVE PROVISIONS

SEC. 10. (a) In addition to his other powers under law,

6 the Secretary shall have all powers necessary and incidental 7 to carrying out this Act including the powers set forth in sec8 tions 108, 701, 702, and 703 of the Revised National Hous9 ing Act.

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(b) Financial transactions under this Act in connection 11 with the writing or approval of guarantee agreements made 12 by the Secretary and the payment of claims made under 13 such agreements, shall be final and conclusive upon all of14 ficers of the Government.

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(c) Any real property acquired and held by the Secre16 tary as a result of guarantee under this Act shall be subject

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to taxation by any State, or subdivision thereof, to the same 18 extent, according to its value, as other real property is 19 taxed.

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APPROPRIATIONS

SEC. 11. There are hereby authorized to be appropriated 22 such sums as may be necessary to carry out this Act.

Mr. BARRETT. Mr. Secretary, please introduce your associates to the subcommittee. Then you may proceed as you wish.

STATEMENT OF HON. JAMES T. LYNN, SECRETARY OF HOUSING AND URBAN DEVELOPMENT, ACCOMPANIED BY FLOYD H. HYDE, UNDER SECRETARY; WILLIAM LILLEY III, DEPUTY ASSISTANT SECRETARY FOR POLICY DEVELOPMENT AND RESEARCH; JAMES MITCHELL, GENERAL COUNSEL; DAN KEARNEY, DEPUTY ASSISTANT SECRETARY FOR HOUSING PRODUCTION AND MORTGAGE CREDIT; AND JAMES T. NEVILLE, ASSISTANT ADMINISTRATOR, FARMERS HOME ADMINISTRATION

Secretary LYNN. Thank you, Mr. Chairman. I would be pleased to introduce the other gentlemen with me at the table.

On my left, I have Floyd H. Hyde, the Under Secretary of the Department; next to him is William Lilley, who is Deputy Assistant Secretary for Policy Development and Research, which was the arm of HUD that had day-to-day responsibility, overall responsibility, for the housing study.

On my immediate right, I have James Mitchell, who is the General Counsel of the Department. Next to him is Dan Kearney, who is Deputy Assistant Secretary for Housing Production and Mortgage Credit.

I also have with me, behind me this morning, a number of other officers of the Department, in case there are some questions upon which I should turn to them. They include Dr. Toot, the Assistant Secretary for Equal Opportunity; and next to her, H. R. Crawford, who is the Assistant Secretary for Housing Management; and Dave Meaker, who is Assistant Secretary for Community Planning and Development.

Mr. Chairman and members of the subcommittee, you have asked me to testify today on the major thrusts of H.R. 10036, the Housing and Urban Development Act of 1973, which you and Congressman Ashley introduced and which deals with both housing and community development; and two administration bills, H.R. 10688, the Housing Act of 1973, and H.R. 7277, the Better Communities Act.

I would like to start with housing. As you are aware, on September 19 the President forwarded to the Congress housing policy recommendations based on an extensive study of our housing programs. Those recommendations were followed in 10 days by specific legislative proposals.

Before discussing the details of similarities and differences in approaches among the bills, a few words about the study are in order. The national housing policy review was conducted over approximately 6 months. It utilized the research of more than 100 people on the study teams, as well as over 100 private contractors. Very helpful assistance was received from Members of Congress and congressional staffs in a series of briefings and individual meetings.

Mr. BARRETT. Mr. Secretary, I am going to stop you there and give Mr. Widnall an opportunity to welcome you. He is a little late and I would like to give him an opportunity to make a statement here before you continue.

Secretary LYNN. Of course, Mr. Chairman.

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