Section 2 of my bill directs the Secretary of HUD to prepare for the Congress a program, similar to our efforts in the Manhattan project for atomic energy, in the space program to put a man on the moon, in the program to develop a supersonic air transport, and in the Boston-Washington high-speed railway, which will aim at breakthrough results within 5 years of its approval by the Congress.

The proposed program is to concern itself with all aspects of new systems for metropolitan areas of various sizes. It is to concern itself with the technical financial, economic, governmental, and social aspects of the problem.

This proposal is a modification of S. 2599, the bill I introduced last year on behalf of myself and Senators CASE, CLARK, HART, HARTKE, INOUYE, JACKSON, KENNEDY of Massachusetts, KUCHEL, RIBICOFF, and SALTONSTALL. That bill was a companion to a bill developed and introduced by the House of Representatives by Congressman HENRY REUSS, of Wisconsin.

After hearings in the House, and discussions with the administration, Congressman REUSS amended his proposal. The language I have incorporated in my bill follows Congressman REUSS' modified proposal. This language has been approved by the Secretary of HUD and is supported by the administration.

The three proposals embodied in this bill are modest in cost, but will, I believe, provide much needed assistance to urban communities in areas that particularly require Federal aid. I hope the proposals will be considered bthe Housing Subcommittee when it takes up the problem of mass transit.

[From the Congressional Record, Apr. 21, 1966]

STATEMENT OF SENATOR JOSEPH D. TYDINGS UPON INTRODUCTION OF BILL TO AMEND SECTION 110(e) OF THE HOUSING ACT OF 1949

Mr. President, on behalf of my colleague, the senior Senator from Maryland [Mr. Brewster] and myself, I introduce, for appropriate reference, a bill to encourage the rebuilding of our cities by providing a more equitable apportionment between the Federal and State governments of the costs of certain urban renewal projects.

The bill provides that cities not now eligible to do so can include as part of their share of urban renewal costs some of the taxes temporarily lost through urban renewal and certain costs directly attributable to providing site management and relocation services to families, businesses, and nonprofit corporations which must be relocated as part of an urban renewal program.

The Housing Act now provides alternative formulas for financing urban renewal projects. Under the regular financing formula, a city receives Federal reimbursement for two-thirds of all costs related to the renewal project, including indirect and overhead expenses. Under the alternate financing formula, a city receives reimbursement for three-fourths of project expenses in the nature of land acquisition, demolition, and project improvements, but does not receive any reimbursement from the Federal Government for the planning, salary, administrative, relocation, and other costs, even though they are directly attributable to the urban renewal project.

The alternate three-fourths financing formula is advantageous to the Federal Government and to the cities, because the simplified Federal audit and review procedure it requires results in substantial time and cost savings to the Federal Government and to the cities in carrying out an urban renewal project.

A number of cities, including Baltimore, have elected the three-fourths financing formula for one or more urban renewal programs. I am informed that some of the other cities are St. Paul and Minneapolis, Minn.; Springfield, Mass.; Covington and Louisville, Ky.; New Orleans, La.; Hartford. Meriden, and Bridgeport, Conn.; Honolulu, Hawaii; Columbus, Cincinnati, and Cleveland, Ohio; Portland, Maine: South Bend, Ind.; Harrisburg and York, Pa.; Rochester, White Plains, and Buffalo, N.Y.; Alexandria, Va.; and Chicago and Springfield, Ill.

The Housing and Urban Development Act of 1965 made certain adjustments to the three-fourths reimbursement formula to accommodate cities which had rehabilitation, rather than demolition, of existing structures as their primary renewal thrust. The 1965 act provides that staff services connected with programs of building code enforcement and voluntary rehabilitation and repair are includible in the three-fourths financing formula.

However, certain costs incurred by a city using the three-fourths financing formula still are not reimbursable items under the Housing Act, even though they represent direct costs attributable to urban renewal projects. One of these is the cost of taxes lost in clearance projects from the time of the renewal authority's acquisition of the property until it is sold as cleared land.

Most cities are increasingly dependent on real estate taxes. Any loss in the tax base hurts, even if it is temporary. Even cities which are making the strongest efforts to shorten the time period between acquisition of the land and its resale are nonetheless unable to eliminate the tax loss entirely. The great importance of real tax as a revenue source to most of our cities argues strongly for a credit for the temporary loss of such taxes in carrying out renewal projects under the three-fourths formula as well as under the regular financing formula. The bill I introduce today would accomplish this purpose.

The second major unreimbursed cost being incurred by localities which elect the three-fourths financing formula, but which is reimbursable in the case of cities electing the regular financing formula, is the direct project cost of relocation and site management services to families, businesses, and nonprofit corporations which must be relocated as a result of urban renewal programs. These are costs the city incurs once it condemns property for urban renewal. Condemnation, of course, is not immediately followed by demolition and reconstruction. There is an interim period during which the city must manage the property, collect its rents, and help relocate the business or family occupying the property. In addition, growing recognition of the hardships persons often face as the result of displacement in urban renewal projects highlights the need for the provision of adequate relocation services. This responsibility is particularly crucial in the relocation of residents of low income, who often have problems of unemployment, education, poverty, and the many other problems related to dependency and economic deprivation. Rehousing these persons is a difficult and trying chore in any case. However, failure to resolve these social problems spreads the conditions of physical blight to the areas where these people are relocated and weakens efforts to prevent the recurrence of blight in the project area itself. The costs of these relocation services are not presently reimbursable under the three-fourths formula.

Moreover, the processing of moving expense claims has become more complicated. Relocation adjustment payments and small business displacement payments were included in the Housing Act of 1964. Processing these additional payments to eligible relocatees costs local public renewal agencies considerable staff expense. Such costs are not presently reimbursable under the three-fourths financing formula.

In light of the benefits to both city and the Federal Government in cases where the three-fourths financing formula is adopted, I think that the costs incurred by such cities in relocation and site management expenses directly attributable to urban renewal projects should be reimbursable under both formulas of the Housing Act. The bill I introduce today provides for such reimbursement.

To Baltimore, enactment of this bill would mean a saving of $87.500 at the current annual level of relocation services and substantial savings on tax losses in future renewal projects.

I am confident that the Housing Subcommittee of the Banking and Currency Committee of the Senate will give appropriate consideration to this bill, and hope that it will include it in the Omnibus Housing Act of 1966.

STATEMENT OF SENATOR JOSEPH D. TYDINGS INTRODUCING A BILL TO EXTEND THE LOWER INTEREST RATE FOR CONSTRUCTION OF HOUSING FOR THE ELDERLY

Mr. President. I introduce for appropriate reference a bill to amend the Housing and Urban Development Act of 1965 to extend the coverage of the lower interest rate provided in the 1965 Act for construction of housing for the elderly. The session of Congress which is presently drawing to a close will be long remembered for its record of creative humanitarian legislation. Not the least of its achievements is the recognition of the needs of our elderly citizens. Medicare, extension of Social Security benefits, the establishment of regional medical centers, each of these measures recognizes the right of every American to live his twilight years in peace and dignity.

The Housing and Urban Development Act of 1965 included another item in recognition of the needs of the older American. In this act, the result of so much

painstaking care and patient effort on the part of the Housing Subcommittee, under the leadership of the able and distinguished Senator from Alabama (Mr. Sparkman), the program of direct loans to build housing for the elderly has been made applicable to many more of our older citizens, by lowering the interest rate applicable to such loans. However, as that Act is construed by the Housing and Home Finance Agency, the lower interest rate will apply only to new projects for which a commitment had not been made prior to that date of enactment of the 1965 Housing Act.

The bill which I introduce today would make the lower interest rate applicable to projects for which a commitment has already been made, but which had not begun construction on the date of enactment of the 1965 Act. Thus the bill would allow additional projects of housing for the elderly to secure a lower interest rate, and thus to change lower rents to their tenants, who are very often less than affluent.

In view of the worthwhile purpose of this bill, it is my hope that it will receive prompt consideration by the Housing Subcommittee and the Banking and Currency Committee, which have in the past been so solicitious of the needs of all of our citizens for adequate housing at reasonable rates.

STATEMENT OF SENATOR JOSEPH D. TYDINGS ON THE "MA AND PA"
URBAN RENEWAL AMENDMENT

Mr. President, I introduce for appropriate reference a bill to amend the Housing Act of 1949, in order to provide for more equitable and compassionate treatment of older people whose businesses are substantially destroyed during the course of urban renewal.

Progress has its price. The price of progress in urban renewal is often to destroy the livelihood and earning capacity of the small, neighborhood storekeeper.

In Baltimore, for example, I know of a corner candy store owner who lived and worked in the same location for 40 years. His store was a focus of neighborhood activity. People came to buy their newspapers, to catch up on local neighborhood events, and to purchase last minute groceries on Sundays or late evenings. For 40 years, he was part and parcel of the community. While I was a student at the University of Maryland Law School, I lived in that neighborhood and many times found myself in the candy store.

Several years passed and then the city of Baltimore decided to renew this area, and the candy store was included in the urban renewal demolition project. The candy store and all of its customers were told they had to move.

The owner of the building, from whom this man had rented for 40 years, received payment for his building. But the man who rented and lived in the area received no payment at all. His store was gone, his clientele was gone, his goodwill was lost. He was left adrift in the world at age 65, with no place to live, no source of income, and only token relocation assistance.

This was an extreme hardship. To be sure, some hardships are inevitable, if we are to redevelop our slum neighborhoods. Some inconvenience cannot be avoided if we are to renew our decaying cities. I do not think we should allow these considerations to block progress. I support urban renewal for our cities. But I firmly believe that we owe a moral obligation to the families and small businesses that have to be relocated to minimize the burdens and to make them as whole as possible.

Last year Congress wisely amended the urban renewal laws to increase the relocation payments for small business concerns. Last year's amendment increased the relocation payment from $1,500 to $2,500.

However, existing relocation programs still fail to meet the needs of those businesses which, for all practical purposes, cannot be relocated. Take the candy store owner to whom I referred earlier. What can he do at age 65 with a $2,500 relocation payment and a few hundred dollars moving expense? Where can he go and set up a neighborhood candy store? Where can he become an integral part of a community?

Let us be honest. In the case of our candy store owner, urban renewal did not result in his relocation. It put him out of business. It cut off his source of income as effectively as if his business had been condemned.

I think we should provide for such cases in our urban renewal program.

The bill I am introducing is limited in scope. It would provide the owners of small neighborhood businesses with a lump-sum cash payment, in lieu of relocation and moving expenses, which would be equal to the average annual earnings of that business for the past 3 years. If, for example, the candy store operator to which I have referred had an average annual income of $5,000, he would be entitled, under my amendment, to receive a lump-sum payment of $15,000. This would be in lieu of his $2,500 relocation payment and moving expenses.

This amendment is also limited in its applicability. In order to qualify for the foregoing payment, an owner relocated in an urban renewal project would have to meet the following four tests:

First, he would have to be 50 years of age or older.

Second, he would have had to be a tenant and not an owner of the property in which his business was located.

Third, his average annual net earnings for the preceding 3 years would have had to be less than $10,000, per year.

Fourth, his business would have to be of such character that it could not be relocated without "a substantial loss of its existing patronage."

In essence, this amendment would apply only to the small, "Mom and Pop" neighborhood store in which the owners were over 50 years of age, earned less than $10,000, and rented their place of business.

I think the lump-sum payment which I have suggested is modest in amount and wholly consistent with our moral obligations to alleviate the hardships imposed by urban renewal progress.

The cost of this amendment would be low. Last year the Urban Renewal Administration advised me that approximately 6,000 business establishments are relocated every year as a result of our urban renewal programs. Approximately 30 percent of these establishments go out of business. These are, for the most part, the small marginal business and neighborhood stores. We are thus dealing with a group of not more than 1,800 businesses, and a large number of these people will not meet the requirements of my amendment.

An educated estimate by a high official of the Urban Renewal Administration is that not more than 1,000 businesses per year would qualify under this amendment. If we assume the average annual earnings of these 1,000 businesses to be $7,000 per year-a relatively high figure considering the $10,000 ceiling in my amendment-we would be paying an average of $21.000 to each of these 1,000 businesses estimated or a total of $21 million. I think this is a small sum, in relation to our total urban renewal program. Last year's urban renewal bill increased the capital grants for urban renewal by more than 2 billion dollars.

I am familiar with and fully support S. 1681, the bill introduced by Senator Muskie to establish order, fairness and equity among the allowances granted to persons displaced by Federally-subsidized programs. I realize that passage of that bill, now pending before the Senate Government Operations Committee, would repeal the urban renewal housing allowances, which the bill I introduce today seeks to amend.

Notwithstanding my wholehearted support for Senator Muskie's now pending, wise, and necessary bill, I think we ought to act now to give equity to our senior citizens displaced by urban renewal. So, I introduce this bill and request that the distinguished Subcommittee on Housing of the Senate Banking and Currency Committee consider it now in connection with its proceedings on the Housing Act of 1966.

Senator WILLIAMS. We are a little bit ahead of schedule for a change.

Is Mr. Lennartson here? We had you on for this afternoon. If you are ready now, we will be glad to hear your testimony.

STATEMENT OF NILS A. LENNARTSON, PRESIDENT, RAILWAY PROGRESS INSTITUTE

Mr. LENNARTSON. Thank you very much, Mr. Chairman. Senator WILLIAMS. We will let the audience know you are president of the Railway Progress Institute, as I understand it.

Mr. LENNARTSON. I appreciate the opportunity to be here, Mr. Chairman. I apologize for the fact that I don't have copies of the

statement. They are being reproduced. I was negligent, as I didn't expect to be on until tomorrow, but we will have them after lunch.

I am Nils A. Lennartson, president of the Railway Progress Institute. We are the national association of the railway equipment and supply industry. The institute represents the companies which supply the Nation's railroads with locomotive power, freight cars, passenger cars, signaling and communications equipment, maintenance-of-way equipment, and all the other hardware that goes into our Nation's railroads.

The RPI Committee on Passenger Traffic has for many years been studying the problem of urban commuter services as a vital element of urban transportation in many areas of the country. In this work the passenger traffic committee holds many meetings with key leaders and experts in the commuter transportation field, conducts research studies, and prepares information as to the capability of rail transportation to perform in the mass transit field.

We are appearing today in connection with legislation authorizing appropriations necessary to continue the urban mass transportation. program. As other witnesses have indicated, it is clear that very serious problems exist in this area in many parts of our Nation which proposals now before the Congress will help continue to solve.

In addition to recognizing the seriousness of the commuter problems, the RPI Committee on Passenger Traffic stresses the fact that rail rapid transit can be a vital component of balanced transportation systems which are established in our metropolitan areas. Rail rapid transit can be this vital component because of its inherent economics and greater passenger-carrying capability. In addition, in most metropolitan areas there are extensive railroad net works which could be used for new rail transit operations. The RPI committee has sought to promote public understanding as to how rail transit systems can contribute to the most efficient solution of commuter problems.

Our committee feels that mass transit programs should be designed so that the full potential of advanced forms of high-speed rapid transit services can be fully utilized. We wish to make it clear that the railway supply industry stands ready with the technology and capability to provide necessary advanced equipment and facilities for efficient mass transit systems. The innovations which have been produced in the general railroad field in the last one-half dozen yearsin the form of vastly heavier motive power, ingenious freight carrying cars and systems as well as passenger systems-are proof of this. While exact figures as to expenditures in research and development are not easy to come by, it is clear that the innovations which exist today would not have occurred without substantial expenditures of funds and energy by the railway supply and the railroad industry.

In this connection, Mr. Chairman, a survey conducted by and published in the April 18 issue of Railway Age indicated in the magazine's own words that

railroads and their suppliers are the most research conscious of all transportation modes.

The magazine concluded that if policy decisions are made on the theory that the rail industry is technologically backward, such decisions are "apt to be in serious error." And the Southern Railway's