assets of the Military Housing Insurance Fund, shall be credited to the Military Housing Insurance Fund. The principal of and interest paid and to be paid on debentures issued in exchange for any mortgage or property insured under this title, cash adjustments, and expenses incurred in the handling of such mortgages or property and in the foreclosure and collection of mortgages and claims assigned to the Commissioner under this title, shall be charged to the Military Housing Insurance Fund.

"SEC. 805. Whenever the Secretary of the Army, Navy, or Air Force determines that it is desirable to lease real property within the meaning of the Act of August 5, 1947 (61 Stat. 774), to effectuate the purposes of this title, the Secretary concerned is authorized to lease such property under the authority of said Act upon such terms and conditions as in his opinion will best serve the national interest without regard to the limitations imposed by said Act in respect to the term or duration of the lease, and the power vested in the Secretary of the Department concerned to revoke any lease made pursuant to said Act in the event of a national emergency declared by the President shall not apply. Whenever the Secretary of the Army, Navy, or Air Force determines it to be in the interest of national defense, he is hereby authorized to sell, transfer, and convey at fair value (as determined by him), for use under this title, all or any right, title, and interest in any real property under his jurisdiction, notwithstanding any limitations or requirements of law with respect to the use or disposition of such property. The authority conferred by this section shall be in addition to and not in derogation of any other power or authority of the Secretary of the Army, Navy, or Air Force. "SEC. 806. The second sentence of section 214 of the National Housing Act, as amended, relating to housing in the Territory of Alaska, shall not apply to mortgages insured under this title on property in said Territory.

"SEC. 807. Nothing in this title shall be construed to exempt any real property acquired and held by the Commissioner under this title from taxation by any State or political subdivision thereof, to the same extent, according to its value, as other real property is taxed.

"SEC. 808. The Commissioner is authorized and directed to make such rules and regulations as may be necessary to carry out the provisions of this title." SEC. 2. Sections 1 and 5 of the National Housing Act, as amended, are further amended by striking out the words "titles II, III, VI, and VII" each time they appear and inserting in lieu thereof the words "titles II, III, VI, VII, and VIII". SEC. 3. Section 212 (a) of said Act, as amended, is further amended by striking out the words "effective date of this section," and inserting in lieu thereof the words "effective date of this section, or under title VIII,".

SEC. 4. Section 301 (a) of said Act, as amended, is further amended

(1) By striking out of paragraph (1) the words "under title II, or title VI" and inserting in lieu thereof the words "under title (II, title VI, or title VIII"; and

(2) By striking out the period and adding the following proviso at the end of paragraph (1) (E): “: Provided, That such aggregate amount paid by the Association shall not include any amount paid by it for a mortgage or mortgages which are insured under title VIII of this Act; and".

SEC. 5. (a) Section 1 of the Act of July 30, 1947 (61 Stat. 675), is hereby amended to read as follows:

"The Secretary of the Army, the Secretary of the Navy, and the Secretary of the Air Force, or their designees within their respective establishments, are authorized to sell and contract to sell, under such regulations and at such prices and for such periods of time, as the Secretary concerned may prescribe, to purchasers within, or in the immediate vicinity of, naval or military activities, such utilities and related services as are not otherwise available from local private or public sources."

(b) Section 2 of said Act is hereby amended to read as follows:

"SEC. 2. The utilities and related services authorized to be sold under this Act are: (1) Electric power, (2) steam, (3) compressed air, (4) water, (5) sewage and garbage disposal services, (6) gas (natural, manufactured, or mixed), (7) ice, (8) mechanical refrigeration, and (9) telephone service; and the proceeds received for any such utilities and related services sold pursuant to the authority of this Act shall be credited to the appropriation or appropriations currently available for the supply of such services: Provided, That any utility or related service provided and sold under the authority of this Act shall not be so provided unless it is determined that the utility or related service is not at the time of such sale or contract to sell available from a private or other public source, and that the furnishing thereof is in the interest of national defense or in the public interest."

50588-54- -5

(c) Section 3 of said Act is hereby amended by deleting the words "The Secretary of the Navy and Secretary of War" and substituting therefor the words "The Secretary of the Army, the Secretary of the Navy, and the Secretary of the Air Force".

(d) Section 5 of said Act is hereby repealed. Approved August 8, 1949.

[S. Rept. No. 1484, 81st Cong., 2d sess.]

AMENDING TITLE VIII OF THE NATIONAL HOUSING ACT

The Committee on Banking and Currency, to whom was referred the bill (H. R. 7846) to amend title VIII of the National Housing Act, as amended, to encourage construction of rental housing on or in areas adjacent to Army, Navy, Marine Corps, and Air Force installations, and for other purposes, having considered the same, report favorably thereon with amendment and recommend that the bill do pass.

GENERAL STATEMENT

Public Law 211, Eighty-first Congress, approved August 8, 1949, added a new title VIII to the National Housing Act providing special FHA mortgage insurance and other incentives for the construction by private enterprise of rental housing on or in areas adjacent to Army, Navy, Marine Corps, and Air Force installations. Although the military services are depending upon the provisions of this law for the major part of their housing needs in the immediate future, your committee has been informed that, by January 31, 1950, only 8 projects totaling 1,592 dwelling units had been insured by FHA under the law.

Largely because of the delays and difficulties encountered by the services under this law, the Secretary of Defense appointed a Department of Defense Housing Commission for the purpose of studying military housing problems and making recommendations for their solutions.

This study has revealed that a large part of the delays in the military housing program under Public Law 211 occur because of the difficulties experienced by the services in selecting sponsors for projects designed to serve the various military installations where housing is required. Under procedures employed by the services, prospective sponsors have been required to prepare and submit their own plans upon the basis of which the particular military service involved selects the sponsor and plan which it believes best. Thus there is a great duplication of architectural work and labor, which may cause increases in the ultimate cost of such housing and in the rents to be charged to servicemen and their families. In one case, for instance, your committee understands that 57 different sets of plans were submitted by as many prospective sponsors of a single housing project on a military reservation. This, obviously, is very wasteful and the task of selecting a sponsor involves a long and often difficult comparative analysis of the different plans, specifications, and rent schedules submitted. Even after a sponsor is selected, receives the service's certification of need, and applies to the FHA for mortgage insurance under Public Law 211, it may be found that the project, on the basis of its design or rent schedules, is not eligible for FHA mortgage insurance. This leads to further delays while the proposal is revised so as to make it eligible for such insurance.

After determining the reasons for these difficulties and delays, representatives of the Department of Defense and the Housing and Home Finance Agency developed proposals for expediting the provision of housing under this program. The procedures developed provide for the selection of sponsors on the basis of competitive bids upon identical plans and specifications drawn for each project by a private architect. Before bids are requested from prospective sponsors the plans and specifications would be conditionally processed by the FHA to determine their eligibility for mortgage insurance. The Housing Agency and the Department of Defense are of the opinion that such a procedure, by providing a simple and objective formula for sponsor selection by the services, will substantially contribute to the success of the housing program under Public Law 211.

SUMMARY OF BILL

To carry out the proposal explained above, it is necessary that the services have suitable plans and specifications prepared upon which all prospective sponsors may bid. In the case of an off-reservation project, it is also necessary to assure that the desired site will be available for project use. As the services do

not have adequate authority to employ architects to draw such plans and specifications or to secure options on privately owned land for housing of this character, further legislation is necessary.

Accordingly, this legislation would authorize the services to enter into contracts with architects and engineers for the preparation of plans and specifications on the basis of which bids from prospective sponsors would be received. The Government would thus pay for such services and other necessary expenses (including progress or advance payments) in the first instance. However, the sponsor selected for the project would reimburse the Government for these payments, and the amount of the payments would be included in the development cost of the project as a base for the insured mortgage loan.

The Secretary of the military service involved would also be authorized to advance or pay to the Federal Housing Administration its fees in connection with the conditional processing of the plans and specifications before the sponsor is selected. After selection of the sponsor and approval by the Federal Housing Administration of his application for mortgage insurance, the Federal Housing Administration would collect these fees from the sponsor and reimburse the service.

The Government would be authorized under the bill to acquire options on private sites in cases where the projects are not to be located on land owned by the Government so as to assure that the sites with respect to which the plans and specifications are drawn will remain available for the construction of the projects. Such options would be transferable to the sponsor of the project who would be required to purchase the property. Authority would be given to the Government to make arrangements with the sponsor whereby the ownership of such off-site projects would at a future date pass to the Government without cost to it.

Any public works appropriations now or hereafter available to the Department of the Army, Navy, and Air Force could be obligated for the purposes of this bill, and reimbursements to the Government for such payments would be returned to the appropriations against which the payments were charged.

The bill also contains language to make it clear that plans and specifications need not be of a stereotyped or rigid character, and that the sponsor may be given a choice among alternate methods of construction or materials. The specifications could, if the military service so desired, permit the sponsor to furnish factory-built housing or housing components where these would produce accommodations of the desired type and quality. If the Secretary of the service involved so desires, he can stipulate that certain particular projects or portions of projects should consist of housing produced by mass production methods. In this connection your committee considered including provisions to require that some minimum fixed percentage of all housing under title VIII should be of this type. Your committee did not include such a provision in reliance upon a proper exercise of administrative discretion and assurance from officials of the Department of National Defense that full use would be made of prefabricated or factory manufactured houses or housing components wherever feasible. Your committee regards this matter extremely important and will therefore review from time to time, the extent to which this type of housing is actually used pursuant to this authority granted by this bill. Your committee believes that every effort should be made to assure that the accommodations provided will be of maximum size and quality at rentals within the means of as many enlisted men and junior officers as possible.

The labor standard provisions of section 212 of the National Housing Act, as amended, are applicable to properties insured under title VIII. While your committee rejected an amendment allowing the Secretary of Defense to set wage rates for any project built under his jurisdiction it was the sense of your committee that, in any case where data available to the Secretary of Defense indicated that the wage-scale determinations for any particular project were out of line with the wages or fees prevailing in the locality, he will call these matters to the attention of the Secretary of Labor and request that appropriate action be taken. Furthermore, your committee believes, that with respect to those projects which the Secretary of Defense designates, under the authority granted in this bill, for prefabricated or factory manufactured houses or housing components, that the provisions of section 212 of the National Housing Act would be applicable only to laborers and mechanics employed in the erection of such houses on the project. site and would not be applicable to laborers and mechanics employed in the factory manufacturing such houses.

Your committee recommends the early enactment of H. R. 7846 in order to expedite the provision of urgently needed rental housing for military personnel under title VIII of the National Housing Act.

CHANGES IN EXISTING LAW

In compliance with subsection (4) of rule XXIX of the Standing Rules of the Senate, changes in existing law made by the bill, as reported, are shown as follows (new matter is printed in italics, existing law in which no change is proposed is shown in roman): "NATIONAL HOUSING ACT

"SEC. 809. Whenever the Secretary of the Army, Navy, or Air Force, or his duly designated representative, determines that it is desirable in order to effectuate the purposes of this title, the Secretary is authorized, without regard to the civil-service and classification laws, to procure, by negotiation or otherwise, the services of architects and engineers, or organizations thereof, under such arrangements as he deems desirable, but at an expense not in excess of that permissible under the schedule of fees allowed from time to time by the Public Housing Administration in connection with projects assisted under the United States Housing Act of 1937, as amended. Such services may include the development of plans, drawings, and specifications for rental housing under this title and other services in connection therewith: Provided, That such plans, drawings, and specifications may include the use on any project to be constructed under this title of alternate materials or alternate types of construction, including prefabrication, that provide substantially equal value and conform to standards established by the Federal Housing Administration: Provided further, That the Secretary may designate certain sites or parts thereof for rental housing to be furnished from prefabricated houses or housing components. Such arrangements may include provision for advance or progress payments, for payment by third parties, for payment by the Government of any such compensation as is not paid for by third parties, and shall include provision for reimbursement by third parties to the Government of any compensation or other expenses paid by the Government pursuant to this section, and may include other provisions for compensation. The Secretary is further authorized to advance or pay to the Federal Housing Administration its Appraisal and Eligibility Statement' fees in connection with such rental housing. The Secretary is further authorized to procure options from private parties for the acquisition by third parties of off-installation sites intended for such rental housing. The Secretary is further authorized to enter into arrangements by contract or otherwise for eventual acquisition by the Government, without cost to the Government, of all right, title, and interest in sites on which housing is constructed pursuant to this title and improvements thereon. Any public-works appropriations now or hereafter available to the Departments of the Army, Navy, or Air Force may be obligated by the respective Departments for these purposes. Reimbursements to the Government on account of payments made pursuant to this section shall be made to appropriations against which such payments were charged."

[PUBLIC LAW 498-81ST CONGRESS]

[CHAPTER 151-2D SESSION]

[II. R. 7846]

AN ACT To amend title VIII of the National Housing Act, as amended, to encourage construction of rental housing on or in areas adjacent to Army, Navy, Marine Corps, and Air Force installations, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That title VIII of the National Housing Act, as amended, is hereby amended by adding the following new section at the end thereof:

"SEC. 809. Whenever the Secretary of the Army, Navy, or Air Force, or his duly designated representative, determines that it is desirable in order to effectuate the purposes of this title, the Secretary is authorized, without regard to the civil service and classification laws, to procure, by negotiation or otherwise, the services of architects and engineers, or organizations thereof, under such arrangements as he deems desirable, but at an expense not in excess of that permissible under the schedule of fees allowed from time to time by the Public Housing Administration

in connection with projects assisted under the United States Housing Act of 1937, as amended. Such services may include the development of plans, drawings, and specifications for rental housing under this title and other services in connection therewith: Provided, That such plans, drawings, and specifications may include the use on any project to be constructed under this title of alternate materials or alternate types of construction, including prefabrication, that provide substantially equal value and conform to standards established by the Federal Housing Administration: Provided further, That the Secretary may designate certain sites or parts thereof for rental housing to be furnished from prefabricated houses or housing components. Such arrangements may include provision for advance or progress payments, for payment by third parties, for payment by the Government of any such compensation as is not paid for by third parties, and shall include provision for reimbursement by third parties to the Government of any compensation or other expenses paid by the Government pursuant to this section, and may include other provisions for compensation. The Secretary is further authorized to advance or pay to the Federal Housing Administration its 'Appraisal and Eligibility Statement' fees in connection with such rental housing. The Secretary is further authorized to procure options from private parties for the acquisition by third parties of off-installation sites intended for such rental housing. The Secretary is further authorized to enter into arrangements by contract or otherwise for eventual acquisition by the Government, without cost to the Government, of all right, title, and interest in sites on which housing is constructed pursuant to this title and improvements thereon. Any publicworks appropriations now or hereafter available to the Departments of the Army, Navy, or Air Force may be obligated by the respective departments for these purposes. Reimbursements to the Government on account of payments made pursuant to this section shall be made to appropriations against which such payments were charged."

Approved May 2, 1950.

[Extract]

[PUBLIC LAW 155-82D CONGRESS]

[CHAPTER 434-1ST SESSION]

[H. R. 4914]

AN ACT To authorize certain construction at military and naval installations, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

TITLE V-GENERAL PROVISIONS

SEC. 505. There are hereby authorized to be appropriated funds for acquisition of land, installation of outside utilities, and site preparation for housing projects to be constructed under title VIII of the National Housing Act, as amended. Such funds may be expended by the respective military departments for housing projects when the Secretary of Defense, after consultation with the Federal Housing Commissioner, determines that such housing projects should be constructed and that such expenditures are essential to the construction of satisfactory housing. Such expenditures may not exceed an average of $1,500 per housing unit in recpect of any housing project, and shall not exceed an average of $1,000 per housing unit in respect of all housing projects for which expenditures are approved under the provisions of this section.

Mr. SCOTT W. DONALDSON,

UNITED STATES SENATE, COMMITTEE ON BANKING AND CURRENCY, September 27, 1949.

Special Assistant, Office of the Assistant Secretary,
Department of the Air Force, Washington, D. C.

DEAR MR. DONALDSON: Thank you for your September 20 letter setting forth the views of your office regarding the responsibilities of the Air Force in connection with the certification required under section 803 (b) (2), title VIII, of the National Housing Act, as amended (Public Law 211, 81st Cong.).

Your letter will be retained in the files for the use of the committee.

Sincerely,

WILLIAM F. MCKENNA, Counsel.