Mr. ST GERMAIN. Unless there is some unusual circumstance.
Mrs. MCGUIRE. Yes.

Mr. ST GERMAIN. Is there a similar limitation here?

Mrs. MCGUIRE. It has not been suggested.

Mr. ST GERMAIN. There is no limitation to this one in particular. My question, Mr. Secretary, is, Would this housing be subject to the Davis-Bacon requirement, construction of housing by private contractors?

Secretary WEAVER. I couldn't answer that. I would have to check it out.

Mr. ST GERMAIN. Would you check that and provide it for the record. Because I think you realize that it will have a great bearing on the consideration of the section in some areas.

(The information requested follows:)

There is no statutory requirement that prevailing wage rates must be paid in connection with private housing constructed for use for low-rent public housing purposes, as provided in section 105 of the proposed Housing and Urban Development Amendments of 1966.

The Department of Housing and Urban Development administratively requires that prevailing wage rates be applied, wherever appropriate, in the construction of private housing to be acquired or leased for low-rent public housing purposes. We maintain this position because of the strong congressional intent expressed in the U.S. Housing Act to protect labor standards in the construction of low-rent housing financed under its provisions.

Thus, under the recently initiated "turnkey" procedure which involves acquisition of newly constructed housing for low-rent purposes, we require the application of prevailing wage rates, submitted to the Secretary of Labor for approval, in the construction of this housing, notwithstanding that this is not specifically required by law.

In the case of leasing newly constructed housing under the "flexible formula" (as would be provided in section 105 (a) and (b)), however, only short-term leases are involved. The application of the prevailing wage rates requirement would not be practicable in this situation.

Mr. ST GERMAIN. Mr. Secretary, there is one section that I find a little perplexing. At one point in your supplement at page 6 you have a heading, "Maintenance of Effort." Under it you say:

In addition, a city will not be permitted to use grant funds provided under the demonstration cities as a substitute for local dollars committed, prior to the application for the planning of the demonstration program, to be spent for a project or activity for which Federal financial assistance is being provided under an existing Federal grant-in-aid program.

Now, let's take a specific example, city X.

Secretary WEAVER. Let me read that again. I thought you were talking about something else. I didn't follow you. What is that section?

Mr. ST GERMAIN. 'At page 6, Mr. Secretary, "Maintenance of Effort," about midway. This is the title.

Secretary WEAVER. In my statement?

Mr. ST GERMAIN. That is in the supplement to the statement, not the one you read, but the supplement.

Secretary WEAVER. The long statement.

It has to do actually with section 102, subsection (e) of section 102 of H.R. 12946.

I think I had better let Mr. Foard explain this.

Mr. FOARD. This is simply a requirement that if a city has committed itself to a local contribution, these funds are not going to be

60-878-66-pt. 1-10

used to offset that commitment; they would have to be used for some other purpose.

Mr. ST GERMAIN. I do not like to use the word "simply." Let's take a specific case, theoretical case. City X wants to be à demonstration city, and it files-first of all, they have to somehow or other get some funds to prepare an application to find out whether or not they can be qualified as a demonstration city. We will get to that as my next question. But let's say that they are now being considered under the seven or eight points as a possible demonstration city under the acts as passed. And it is very important that the planning funds that they have received for urban renewal projects at one point on the urban renewal project they get their planning funds, and their plans are being prepared. And they finally submit them to the citizens of the area, and this is approved.

In the meantime, you are processing the application for a demonstration cities' grant.

At which point is this ruled out, the funds of the Demonstration Cities Act to supplement the cities' or the communities' local share of the urban renewal project?

Mr. FOARD. I think it would depend on whether the cities had made a commitment to furnish those funds or not.

Mr. ST GERMAIN. At which point have they made the commitment, and at which point do you compare the two dates? Have you resolved that one?

Mr. FOARD. I don't think

Mr. ST GERMAIN. Mr. Secretary, I don't know if you are perplexed at my question or the problem.

Secretary WEAVER. I am perplexed by your question.

Mr. ST GERMAIN. All right, here is the point, Mr. Secretary, and Mr. Foard. An application is made by a city for urban renewal, for consideration as a demonstration city, and at the same time there is in process an application for an urban renewal project. Which of the two dates are going to control, the date of the application or respective applications, or the date that final approval comes through for either one or both?

Mr. FOARD. I am sorry, I don't understand your question. It would not be the time of application, and would not be necessarily the time of final approval. It would be the time when the local commitment has been made for the funds for the project.

Mr. ST GERMAIN. What would you consider as being the time that the local commitment is made?

Secretary WEAVER. I think we will have to come back to you on that. I think the real point here is, that the demonstration program is not to be used to permit the city to cut back its present level of expenditures. The basic thrust is that the city cannot, for example, reduce the amount that the city is paying for police protection, because it is going to use some of the supplemental funds for police protection. I grant you that that isn't precisely what this language says, but this is the main thrust of the "Maintenance of Effort." As to what this is I will have to check it out.

(The following information was submitted for the record :)

USE OF THE SUPPLEMENTAL GRANT

Once the amount of the supplemental grant authorized by section 6(c) of the demonstration cities bill is computed, the total amount of the grant is generally available to the city to be used at its discretion for any project or activity which is included as part of the city demonstration program.

Except in the one situation described below, the supplemental grant funds may be used to (1) assist cities to provide their required share of the cost of projects or activities which are part of the demonstration program and are funded under existing Federal grant-in-aid programs, and (2) provide funds to carry out other, nonfederally assisted, projects or activities (including projects or activities of the type eligible for Federal assistance under existing grant-inaid programs), undertaken as part of the demonstration program.

However, the supplemental grant funds provided may not be used as the required local share for any project or activity for which Federal financial assistance under an existing grant-in-aid program was contracted to be made prior to the date on which an application is made for funds to plan a demonstration program.

For example, assume a loan and grant agreement had been signed with respect to a particular urban renewal project before the city made application for funds to plan a demonstration program. If this urban renewal project is included as part of the city demonstration program, the non-Federal contribution to it may be included in the base for determining the amount of the supplemental grant available to the city, even though the project was approved and even funded under the urban renewal program before the application for planning funds under the demonstration program was made.

However, the supplemental grant funds may not be used to repay the required local share of this urban renewal project. It must be used for other projects and activities which are part of the demonstration program.

This limitation applies only to projects for which Federal financial assistance under an existing grant-in-aid program was contracted to be made before the application was made for funds to plan a demonstration program. It would not affect a particular project merely authorized (as by referendum or by action of some governing body), or even scheduled. The limitation applies only if financial assistance for that project has actually been contracted for under an existing Federal program before the application for planning funds under the demonstration cities bill was filed.

Mr. ST GERMAIN. The language I was talking about

Secretary WEAVER. I know.

Mr. ST GERMAIN (continuing). Programs on which Federal financial assistance is being provided. And that is the explanation I got out of your supplement.

A summary of one bill says "will provide that no grants may be made under this title with respect to development projects for which a Federal grant has been made or a contract with assistance has been entered into under the legislation referred to in clause 1 of section 105 prior to"

Secretary WEAVER. That is the other bill, that is the metropolitan development bill, sir, not this bill.

Mr. ST GERMAIN. This doesn't apply to both?

Secretary WEAVER. No. This applies to the metropolitan development bill.

Mr. FOARD. It is a provision to prevent projects which are already committed from getting the advantage of the ineentive grant for metropolitan planning.

Secretary WEAVER. This has no relevance to the demonstration cities. Mr. ST GERMAIN. It has no relevance to the demonstration cities. Secretary WEAVER. NO.

Mr. BARRETT. Will the gentleman yield?

Mr. ST GERMAIN. Yes.

Mr. BARRETT. I am quite sure, Mr. Secretary, that both the demonstration cities and the metropolitan area planning program are very important to the gentleman. And I was wondering if it wouldn't be more helpful and more specific if you had given some questions to the Secretary in writing so that he could reply to them.

Mr. ST GERMAIN. Mr. Chairman, I am one of those-I am a nonbeliever in this written question business, for the most part, because you get an answer, and then it is properly-it turns out that they didn't understand the question, didn't understand my question initially. I would have never gotten an answer.

Secretary WEAVER. We wouldn't have understood it any more if you had written it.

Mr. ST GERMAIN. That is a point, Mr. Chairman. This is very important, because our deliberations will continue on this for the next few weeks. Because the Secretary and his staff are experts in this

area.

No. 8, in the criteria for the determination by the Secretary that a city would be eligible, states:

The program meets such additional requirements as the Secretary may establish to carry out the purpose of this act.

Do we have to have that type of criteria?

Secretary WEAVER. I think it is pretty standard procedure in legislative drafting. If one abuses this, then one comes back and suffers for it. I think this is one where you proceed at your own risk. But I think you had better have it as an umbrella in case you find that you are not able to anticipate everything.

Mr. ST GERMAIN. Does the Secretary have a pretty good idea of what these additional requirements may be?

There are a couple of reasons for my asking that question, Mr. Secretary. When we pass this type legislation, naturally all the communities who are interested in it or who are potential applicants are eager to know the regulations that supposedly control this legislation.

Secretary WEAVER. I have had some experience with regulations that were issued before the appropriations were made. And that is my last offense, as far as that is concerned.

Mr. ST GERMAIN. I was thinking, Mr. Secretary, that perhaps when the authorization was being considered, that if we had an opportunity to examine the regulations prior to going before appropriations, it might be helpful.

Secretary WEAVER. I think I can assure you that this is a protective clause that will be used very, very lightly, or only in some detail. And there will be no major criteria added which is not in the substantive

statute.

Mr. ST GERMAIN. We will be watching that closely, Mr. Secretary. No. 6 here provides that, "There exists a relocation plan meeting the requirements of the regulations referred to in section 9" of the bill. Section 9 says, we have to assure adequate housing before people are displaced, and requires, to the maximum extent feasible, the coordination of the Relocation Act which increases the supply of standard housing suitable for displaced families.

I understand, Mr. Secretary, that we are going into a demonstration city, or an area of a city, if it is a city like New York, we are going to

improve the social and economic work potential conditions of the peoples, improve the face of the area, and you want to improve their housing. But in the meantime, how could you give them better housing while you are doing this?

Am I reading this section correctly, this requirement correctly?

Secretary WEAVER. No. I think this requirement says, in effect, that there must be a relocation program which assures that there will be an adequate amount of relocation housing available before people are displaced. You may go about this in several ways. In a project which we now have, a demonstration in New York City on 114th Street, which is rehabilitation, we took 20 buildings, one of which was vacant, and we moved the families from the first building that we rehabilitated into the vacant one after we had rehabilitated that, and with a regular turnover. The next time we were able to do two buildings. And so we went progressively.

Mr. ST GERMAIN. Was this in a rehabilitation area?

Secretary WEAVER. Most of this is rehabilitation.

Mr. ST GERMAIN. And it is contemplated that under this demonstration cities that it will be rehabilitation?

Secretary WEAVER. Definitely. I say, when we talk about this total program, we expect the number of dwellings to be rehabilitated to be 250,000, and the number of new buildings for high and moderate income housing about 40,000. So this is primarily a rehabilitation program.

Mr. BARRETT. The gentleman's time has expired.

Mr. ST GERMAIN. Did the Chairman deduct the time I had to relinquish ?

Mr. BARRETT. I think I allowed for that.

But perhaps Mr. Reuss would be glad to yield for another question. Mr. ST GERMAIN. Thank you, Mr. Chairman.

Section 11. Consultation: it says here that the Secretary will confer with Federal agencies administering the program. And let's get back to No. 8 that I referred to about the establishing of the criteria. I didn't notice anything about consulting with perhaps the members of the authorized committee on some of these areas. And I wonder if the Secretary had any intentions of doing that.

Secretary WEAVER. Well, I think that the consultation there should be properly through the other Secretaries or the other heads of the agencies. I think there would be a good deal of feeling, and I think rightfully, about these Secretaries going back to their authorizing committees. I think that this would be their responsibility. mine would be to get this cooperation to explain what we are trying to do and to find out how far they could go to cooperate with us and facilitate that cooperation. But I don't think I should go back behind them to

And

Mr. ST GERMAIN. I was thinking about this particular Secretary and this particular authorizing committee, in view of the fact that this is a demonstration act in experience.

Secretary WEAVER. I think I would do that without any word or direction.

Mr. ST GERMAIN. One last comment, since my time is up, and that is, on the Federal coordinators, some of the gentlemen are proposing an amendment to make these permanent. Is that it?