PAGE 1
_ ..... ...rigog ea1 o t....... aFa~rs_3ya
PAGE 2
A leotip_1:.-;;:i airpsmrnps, ggdatio:1.. .?liltinn, -j-.c gleau, Ait Ag._ amendi;ie: a in Tsi:13 le augucy'' y rov i si ans_. The r.lerits of the single :~tate e lar.ei-; historical. In the form. .stance i~u:e:
PAGE 3
of thy _tradittonai ''services-in-ait''' tunction in con.teripacary Fgderal_-. ca;eocal a s: LEions .It permits Federal depgr__tmepts _andarenciep Eo provide get Latiz.edag toegigl_ servlegg _goStyte_ andlued urajisi;.igiis ga. p _reilabursableban;i_. /. nuciber of Federal departnetits and a:-,e-.icles nlready provide such services gratuitously or at cost as a .on:lequence of specifle Congressional authorizatioil. The increasi:g.ly complex, and teconical nGLu!'O of State arid local overnniental tid (vities, along with --bc soaring costs n[ providig technic.al pen;:2;:m.l and equipalent, highlight the pres:;ing need for thLs perEtisti tvU pcOvi s (Dr. Dugi ng tiig 196_5_llc.-icingson the redeccfsort i tle the luestiga arose as to al.eden Ebis aborigion 2005LiLuced a threat to o: ious hasjnesse ; -:n .:p: Prjvate_ seggr It is ciur opifian thac_ the lagu%;__ :ssc tio_1 3 .2 p rov i degample_ safeguarda a[;_aigst_ tja is yotent ta y Tlie agari a :s a:: S .9 i al porajged El s sueas_ t g whe thertl_e Fgdera l_ GorgpurgL g.c ag ey cain_ accugatg 13 the ''ga lar ie s _ad al l _c__iputg}M
PAGE 4
, section 202. The point here, of course, is whether .overnment has an adequate procedure to assure fair, .completeassignment of costs. In this _ongectioq, ye IEC the Bureau of the Budeeafter having consulted with a1 offictalsds__about to ssy a circular promulgating 'A gedprip,_ic _dplej-min-ig costs app l icabte to gratit s .nth Styte and locKgovernments._ 1f this is_ reasible i n -ai d c onteyt we be 1ieve_ _t gatthere is no reasontha p :s canriot be applied to the reverse situation contemn1aced 22_ Ebat is, to Charonsfon of Federg technical ._tgte and loegl,_govergaients. |(scretionary power provider; iri this title would not -ogans of those Federal agencies that have been authorized wcEal technical assistance, facilities, or consultation mue reimbursemenc, The "services-in-aid" policy wholly permissive and requesting state or local agencies 1 agency involved would have to agree on the scope and :arvices to he performed. _Iy : gigEttle_ estab1 E she s acoordina tginttergove rat fog _the Magniggand puministratio al grants reloppent. With ircreasig urbaaizatiori, there has been .h tn Federal funds and programs available for such The Commission, in its ,Jariuary 1%C report Imppctgl i__Divg]_apment frggrams _n _ggai_ Government Orgagization
PAGE 5
-nea ly 23 .u. e .. u. 11C. ..deatoe 8 n .h pre 3n billir .y.r .y 12.. .U ) u-. nes-y1 p rox1611.y$bb i. t 1-1. 1ha 0-1 1i o fttletaae Fdrladwl eseti stndr 2501 olta 1ttsia ...,acrdn ote ueuo bh B .ge .acltos T. srpeet ie faot$ i o-
PAGE 6
some _procedure n assist1_rig the prica: levels ofgsvernmentope-atin directly orind a y in eychareas to sera agether to solve coilslian probleep D a .orizes the Free ident :-o e ".Cafish_ governulent -39_ gides for ..orsralatione evaluating, ami reviewof Federal ur-gan development ;;pgatiig andprojeetg (...enion 401). Italeoprovides asamatter og CongreMonel pulie;i.aia,,encies----_to _hemiaximilia extentpe=3-.lia---fill tahigo acep;,0 ell viewpoim_---_national, agtgregional, and local---ilythe fort:1ulation and evaluation of Ducit programisand progets pection 43). ilareaver, systeluatic. planning required by :.cve-al individual Fede;al-unan programis shall--again, to the extent loossible--be coordinated at-a and made part of comprehen.ive lceal and arnavide ur-so sevelopulent planning ("cction 401). A spez'.al. Ceuture of our re:"sci cystem is tilat maat typen of domestic pu'.lic services are administered by general local governents---eities, counties, and to:ms. Yet,_spepial distric-.s Ugi states agaraying at a -;apid_ rate.. [ygm 192 to 196 0&969, 99191 everie?.?d..? 19.2ergent increaan_ repching, a ept-alpf apre, tapn 2100%. It is, the GMnine.io/G belief_ that erpfedegBL gran.E-Ameid legislation..elpleA..b9th-PP9ciai.99E9959..N9EAU" egl. toits al ",eneral 1ppa}._ governiaents. eligible. re. recgive u-ban dgyglopmeni loans angl Erags,._ygdega; endpaghopg. fayor the letten La. abgence of m:1:ptazitie}._ reasons to 6-4 ppntrem e.esp?'n. NK Di Ma $_Ltis. implemercstys_ gpak
PAGE 7
d~~g~ing~~he~gk ..h ....._ C.ges .tpoie nfr oiyai
PAGE 8
.h .dv..r C .....s.o .nisrpr nleroi ogeso ....estan ... G ...s.l~ tSaeadLclGvrnet 16) n h ...n C .itte .n C ....sin ... anrato ..., ..n ..fis a findings ~ ~ ~ ~ ~ ......l ....oedtenedfrtli il. As nttr f
PAGE 9
of ~ ~ ~ ~ ~ ~ ~.. .9.5) .f t..0mj~_gan-n-i nceti13,ol o enntinedna xpi~a~ton povj~igg(A.............r........ ance th Non~~~~~~~ood~~~ ......nc .rga ......Cil 1urtonAt f16 h
PAGE 10
branches ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ..... ..tt eeaiGvrneti he eiwo rpsdlgsai
PAGE 11
the inflexibility of 1:any separece funds a of hoch ad:ninistrators and elected official coordinate and evaluate grant -in-aid progr Dansolidation then is a top riori body's check list on how to strengthen the tunately, consolidation is far easier to o Certain encouragirg 5Leps, howeveT, nave tevel to achieve greater racionality in th y item on practically every grar.t-in-aid system, Un for ate about, than to achieve. een taken at the Federal naze of programs by grant first, under the leadership of the Department af dealth, Education, and Welfare, which assinisters approxinately half of the grant programs the 30mprehensive Public Heelth Planning and Public Health 50rvices amendments (Partnership ip Ilealth Act) were develo|,ed and subsequently enacted by Congress. This Act consoli(ates several previously separate categorical programs and established a single authorization, approprietion and set of requiretaents. Under it, the States are given considerable discretion in developing their own health services in light of their own special needs. Second, Presisent Jebnson in his March 1907 message on "The Quality of Governr.lent" announced that he requested the Directar of the Eureau of the Budget ta review the range of Federal grant-in-aid prograins to determine additional areas where consolidation should be taken. Pursuant to this Presidential directive, top level 1[EW officials beve been working with t5e Bureau of the uudget in analyzing possibilities of further consolidations in BEW aiministered Third, this yeatwo additional consolidating measures were int reduced ~ay the Administration for Songressional consideration: che proposed Partnership in Earning and earnings Act (S. 3099 and 3.R. 15006) and L3e proposed Consolidstion of the Educational 0;portur.ity Grant, National Defense Student Loan, and Work Study Prograus (Section 402 of S. 3090 and R. R. 15067).
PAGE 12
sure, 3:s .whalf, _passpeci!_ieal its__=iprLi la, 196_~i ineeting. * _-snace-rrnt_ .gf _tii.a __egisiati .ce it_ co::-. gLO grig, with_5gveral tE-frue -.Wetive _giera_-gate unistrait :.an 1:a j gunw__preceQu!-g if _egdorsetl bythe Comnissioq * ci) IsgicriEica1 s9_1Iigieg, af thu major_ mandgt-raitg. pcGoleDT -locai reLAtions. Iniproved pubiic ite L~or impro dintergovermirntal :2 i i Le yt]et----Ls gal-ci Lo -ttinn ~Ln its proper per:ipectiv. mporary grant-in-aid sy:steaa pula[.Lrn growth and cal:ad i ed greGLUr dealands [Or ts:di timial ly previ.ded nnieras. These, tri turn, i.on ni Federal involver.ient ulin areas,-largely by d device a:id quite heavi~y NJ tiirough the end of re:s, some 22 new granrted, bringing tlie tinal orical authorizations. thus far have increat;ed all tins ill thi s decade r. : i sc.tl year 19 10 t il a : or ti-.i.s fi lical year, i.11 in FL 1.'eral aid has haci: acal jurisdictir.ns dar-.na sion in the number ara -tra-aid clearly signiEics the pannership principle Lt:r'.,OverTainenEdl deVier:, ation of the centralizi.tig, E-citizen relationship.
PAGE 13
..... -.. To~~~~ ~ ~~~ d. .hn .rn .osldto .a .oloe .h n. ma .c.. ur. .. ... ............es, Anao atoal orti apoahista .obnn .rnt .no e .hngn .ayn .eil v r.q.ir. .n.
PAGE 14
session of Congress fol lowing its transmittal un less eiLher House passed a resolution disapprovirig tie pt-oposed cansalidation. Eaca plan would involve a consolication of individual. prograius within the same furiccional area and would focus administrative responsibility in one Federal 1 agency spec i fy the forr.iula or for...ulas for naaking t'le grant, and describe the differences between the new formula and those ur.der each of the previous individual 1 progrGF15. Sene opponents of this "reorganizational plan approach" have contended thatit involvssan__unconstitutiona_ _defgggtion of legis lativg augio ri t y _t o j he_ exer uti ymanc13_ ge, prp convinced --and various aut horit ies_ support us_-_gie t t he_ ssues invo lvgd_ i n__gs a rgulnent_ d i ffer I n no resitect trom__t ose the e app 12 _tg tu Rac-_rgan _za t ion Ac t _o_1 1_6_, a s aaterided .__Thus fa r ,_r. lat ter_1as_ heen voted esson seven di.1 fererir._occasicles and rosewat isagairipgading. Congress _acticin c:1en, along gititcourt c seg upboldingtheva 11_1 Ey cf gte Act clearly_ dguon strate tlte consti tutionagtvof_ citis device The Advisory Coim.iission in its massive study of Fiscal Balance in the An.erican Federal Systel:3 recorninended a drascic decrease in the nu..iber t t separate authorizations for Federal grar.cs and specifically sanctianed the method set forth in tnis title as a 1:cans of furtnering this objective Tige ,VII: gtleVIIamends the Federg _1 rapert and Administrgt i ve Se rv_eg Ac t by_ s ti u1 a t i ng a uni forut _procedure_ for_ a egui a i t ion us e and disposition of land uttain urber areas by the General Services Administration lui cottformatice, to the extent possible. wir.h local
PAGE 15
.m. ... ...a U ....L.. .. .S
PAGE 16
of~~~~~~~~~ ~~~~ ..... .r..r .....arate di~staoio h xen rci
PAGE 17
[Mse Firector__(Jntergr_'s Jurgiu c 11 S Scytts_5_pcot-spittgegyLyylicLonda af fu KAlen!"Li.t i e.e. 99"I Etirdiedtg. _lief. ?tirt Munri L|m the lach lamL RILellyf.Dimrer Acta & 1 44 lateggeded e.= 1 qlgtyMar.ge; ram gpda i forded t he Departnicnt ula -o r tergoternmen Lal _c La tigns ip__t _s_ _func 1;i wonLdsi" t fjutt ..the_ Depart a&ng_ and__t.ie SE ].arid biapagementyeforp i the _nc.eriorapd_ Insul 9_.01 _Idind fia]]gggnerit has -ifer-1&ntai. _Dil.hePub1 i c_ .5 J.g Igteriods _1_nd_ d ispp .p prirtun it les to s trengt'a gial arger -Janpspor t.u[dsy ... ...... T is ~tl st h i hes a~ni p |i v _~~__h __
PAGE 18
...... ..beihdceritegvrmna m iatos at lry. L1 if he ar lieves the price of tered L cos ts o I ree s tah lishing himself, nited compensa tion to the fair i arke auired, pro' er ty owne rs and tenan ts npensated for incidental costs not c >pe rty taaen.
PAGE 19
..n ...k e .rp e t ..e r d. .. .. ..ub i a q i s t o n w n
PAGE 20
....m.. -loal .tte .. eea-ad mn eeso g.. ..e. Th .. cr h mutad cp frlct p.mets -dv11 r b ssi tacad1suac it ep
PAGE 21
--~~~~~~~~ ~~~~ A.......s...lces malbuiesepatcual
PAGE 22
A h hIgh prga le owadwt eial acceleration, ~ ~ ~ ~ ~ ..... ...rb.mc eocto asbcmmr n TIe -11-ae ndhsafce tr n ceiniiul n
PAGE 23
-T..c extraordir.ary number programs, however, have et overlapping, fragment d!Elicult management at -le ara-.I nyw that managerwat treat. ee also know that while u1ars, and departmental changes and varie ty of grant led to serious problexa ation, information, and all levels. is as important as legisl executive orders, Budgee in procedure can correct mental administration, ache :utory provisions, from unc > in certain areas, and irc 1 authority to discharge hi >[ the grant-in-sid system. aces sensible solutions to Improved intergavernmencal I TgI ,, b ii aI itrdc I nsreor neIgtbsc r
PAGE 24
-ph 3 $ .00 .... p3s000 O reosate l y parp pop. -bof y p I !-rolemo .1o 0ris 110
PAGE 25
Adolph E. Ssan, re Ina appdiser for th Fd-rl -d saI ... w.I .yptei .n .e .huh ..mer d di th .b 1i 1f dt indng -, th disdySmisin
PAGE 26
3. Wih repect o fiancin relcatio p tet ne ":Irll .s.s. e pr.r..........tso pymns o n peron orrelcainga amiyandth cotsof ayent u to $2,000to ay peson eloctinga buine n "hudbecm ..tl emure yteFdea -in-. et;ad h css buses ..d caio -nnsi xcs fta mon hudb shaedonth bsisofth cstshrin frmlagoeringth
PAGE 27
( ... sup .in ...m.. nr.. dn HA E, n th asstneprgas (c) ~ ~ ~ ~ ~ ~ .I epngimnmzngr djsmn prb, es n f codnt bocttr w 1h-h-prjc c lite rdgoeaetlaciiis the onmmnityor narbyar .. T .... ..to ls raes h m Business ~ ~ .. -d1-t1.o c o uhrz dsse oast milcne
PAGE 28
Tosu.up heCoi~igod eomedatjn ~eprcs01__n ag~~~~ord~~~~eith~~ ...... ....ev1__ w~h epc o_(e frii~y no Fed rl _nd _fdea lly ass ite~p~o~ral co cerg ng~e__oc~tos ayn,
PAGE 29
w~eytug rogaiis, apnr~~g ~ 1,?rt_~p p aon r__c ~rap _1
PAGE 30
b0 90909 tha 5,0009ad00 1999eh0. $2-0; (3) -.& mog,,open9. payentof ovig epenes f .p 1. $201 tofmlesadidviul n uo,. $3000 ... 1usines0es when d p d gn.h9r)t p 1erof 19net 70, n(At 00790, 9 657,9,C.70 ).Ay 7 po,7,qist 00v0,0.000d,7p000009n,,oOccup0 of ,oreolo haOno,7,ve dwll0,ng 0.. ..r09010.h9, 00,000 buoneo. 0 nit,,m, ynot pr. ced unt9l0 h. 9,70 04,000 999,e7,ca 0,7n.. th 0 9,,099 De 0rin 00 Oo,,7090o97 and Deve 0pmenth00
PAGE 31
$25,0 ,te00 nciu lgsaur raedaDprteto ..anit ........ ..d ..indi aotn eocto epniiii including ~ ~ ~ ~ ~ ~ ~ ~ .. .h. .....aio fgatsi-i orrlc onpyet
PAGE 32
Ti t le IX:_ This titleo estab I ishe s a unif ormpo lja on land acquisition practices used in Fedecal and federally assisted development programis, and ceniplements the ngevious relocation title. In recent years, there have been growing complaints concerning the equity of government agency land acquisition practices, the adequacy of traditional standards of compensation, and the sufficiency of assistance to persons adversely affected by Pederal direct or federally assisted public improveulent programs. These problems have been largely treated on a piecemeal basis, with consequent inconsistency aug areas covered and inequity for those not covered. As a resuic, bills were introduced in Congress as early as the 05th Congress proposing an independent comission to niake a comprehensive study of all aspects of the land acquisition and reincation problems. One bill to establish Such a comission was introduced in tile 05th and 87th Congresses by senator John Spartullam then Chairman of the Housing Subcomittee of the Senate Danl:ing and Currene.y Comittee. The Bureau of the rxdget supported tie objective of the comission but suggested that the study be conducted within the legislative branch. This proposal was adopted when the llouse Comittee on Public Works established che Select Subcomittee on Real Property Acquisitian in 1961. After three years of intensive study, the Subcociinittee in December 1964 filed its r e p or t ady_ of _Copipeusatf on_ _andA sai stance_ _Eor_ _Pe r s on s. MEected _y usatj'rnpertyAcquistiogin Federal__nd_ FederalLAsisted Programsa Its recommendation were introduced in the 89th Congress as S. 1201 by Senator Sparkman and in the House as ih R. 3421 (Johnson cE California), lh E. 5539 (Bingham), and 11. R. 6580 (St. Germain),
PAGE 33
B 2221. o its1pov2sing o reloa2, 22.10, a lne 2ih .122222'rfere 22 1hi22u222222122n1n2rg22nmeta 2elat.on,. wIch 2122d hea22ng02o0 212h bil2s 222 2222y 22mmr, 96 At te se esionof te Brea of he2udg2,21ar2 eve Fede222 2g22y1222h2222fie 22292222212122 sttmen reque2ted m2re21 ni
PAGE 34
Title ~ ~ ~ ~ ~ ~ .... ...teIo hepooe eisaincnan ......in ... ..rm .... ar sdeunl truhu h te
PAGE 35
purchpaPPPPP ppbfr ph -,Pr p nppg tppppponspand aliap Ptip fe taqupp tp tpph price;p I Ppp ~ noose e eure o ur 71rp = 7sso o i days'i mrttn otct ...Fd .......prti poeryowe t emv
PAGE 36
ection ~ ~ ~ ~ ~ ~ ~ ~ ~ .... .. iet ht Ji axtvau"b ad ...e...io .... cae rcaentin eto 93rqie
PAGE 37
..... ...p~ie arvlu ftepoetordpsto a h
PAGE 38
T .2 C .2 .r ..s ... -v11 2r -uty r2ri rb r G.m .... .r r.y p 2l2c*es, nd1th 222Ti 2e 222,222222y 22 2d2n the 22xh 22t2212s2ud
PAGE 39
Adequate discal and pr:ogram controls are an essential part of any assistance program. The government providing the assistarice ulust he able to assure itself that fur.ds are being legally spent for the purposes ~ntended. Auditirig procedures and financial reporting requirements are essential far this pu.:pose. However, while meeting the necessides of adequate reporting and review, every effort should be made to avoid placing undue and timeconsunila5 burdens on Ctate and local program administrators. Surveys indicate that thEs latter goal is frequently not achieved. A recent stude by the State oudeet offft-ers (NAABOl of Federal grant-in-aid reqidtenlimes which impede Utate administration showd cons iderab le d issatf sfac i;(on w_ rh 1.1-3 ratef 1_mt hi nyamisome a -ri e 1m auditing and reporting procedures required by Federal grant proerems. The variacion betueen Federal and State requirements and anlang Federal requirements regarding freqgency, classificationsystems, anc' metbeds of acc.ount ine ve re__c ited as c.reati.g particular problems .The egsave ly decai led reports gn sMmswere gntiened by one Stateogicia i uho indicated tha t_ individuaEea l_ _rygorts _mug begreparea and I i led regard i ng expendi tures of funds unde_ the Vocational Educ-dota Act at both :;cata and local levels, takim -Jenks of Steft [1010. inutber official codintained that the breakdowns requested are almost endless. la the eatlier survey of The Federal Systeni as Geen by ::tate and Local officials, your subcommittee, Mr. Chairman, found that half af the respondents indicated that variacions aulong the Federal agencies
PAGE 40
%n-id A --ny;.-rrtaedit P c PLPPng sy4sePPad th cotrLAsPPeiPlakPPPn
PAGE 41
n re p F_
PAGE 42
c ~ ~ ~ ~ ~ ~ ~ ~ .. .........hr etinp vie hebssfo ostutv
PAGE 43
T .... '. .. arrangements ~ ~ ~ ... ..... .h conigadad ig il hc ol ed pigif k-sa ig U -1ii n n gadpoieth ai o
PAGE 44
22222222222hnce... ...d... 22 Th21 b22 3e.k2 .. Li .291 ud acoli b ffy ( .) auhoi-Ig P-9-r
PAGE 45
-e I I: Title H seeks _to_ eoord ignate and seke more. tai.n_ standag|,s and agoaduresgoyerning firaaneia1, 131.ardother act ivgiesoEState secut ivis_ ,ppdpther_ .a lii., _nsomasgese. _ac tiv itfe s, are af fec ted by Fedega ] icia. The specific language of this title reflects the attention given to it and amendatory action taken in llouse subcosusaittee on Exec1:Live and Legislative .on with respect to predecessor provisions. present title effects a riumber of basic changes in the 0:1 of grants-in-aid to the states. Section 201 rovdes K5. 91 -Ram. I E'd 9.latig-93. Royld._pjl realLRsix-A!A. /Rf9ynle.d Jnactipenugadarene teA of -thepar.ggsms,_ ard agiogoty .pl retetyed This procedural innovation would assist i preparing a inore adequai-e budget and enable him to e effective coordination over his executive departnients 3. In a similar fashior., ';tate legislatures would be their adatinistrative oversight and fiscal functions. csination of gran in afg_ grogyamsjgas critical pproblei a l eve lagit g at _cle I.-ederalagdloverners have, a mi bi i i.tytq _this__ayea_. Yet piany, __fta__chipE,_exgcyt.ive s a position_ _tsagsame_ th i s _role_. Not all S tates for
PAGE 46
To conclude, hr. Chairman theAdvisory Commissionstrog supports passage pt S._696 the proposed "In governmental Cooperation Act" including Am:endment No, 748 and the enactment of S, 2981, We endorse these measures, because we accept the intrinsie worth of the existing grai1t-in-aid system, But we know that it is in desperate need of modernization. The uriderlying thrust of all the legislation before you is geared to achieving much of this needed referin. Improved intergovernmental clanagensent is as critical a factor today in improving Federal-State-local relations as any other. Yet, better intergovernmental adaiinistration is as difficult a subject to dransatize and to achieve action on--as any we know. Prompt, decisive and meaningful action must be taken, however, if American federalism is to survive the many public service burdens now thrust upon it. These bills eppstituteeviable, vigorous first response to manya f he magement _uddley__that__p Igguqcatemporary intere.overnmenta1 relations, We support themmWe uree t:acir early engetment. Anda o f fer the _services of our__staf f to asgis t _he__Sgacomitly. lit m..ga exe.._a1. deemed anorneriste tre fnd 1i f are .onr.. del ihamHem,
PAGE 47
A n n at ... .....re ndctdta i 8sae gbraoil prvli re ..ed ... ....8ohr ttsi asnt h itainvre
PAGE 48
... ..... ~ S 5 S~S < ~ mudforma ~ ~ ~ ~ ~ ~ ... .ie ......~i _...eues lihae ow nova ndesa
PAGE 49
..eed by.. r.....jui it~~~s nity reu~n~ners ot Advances~~~~~~~~~ .o .he .o .i .oth .oae .ld .n .eea pr. r and ~ ~ ~ ~ ~ ~ .........d..... ae 'sute n xenitrs fmo
PAGE 50
.. .-......... _t is non. codac r -aino h Ee yu_ aon esu~ nt
ADVILORY CWISSIW 0N INTERGOVERIMWAL RBMTIWS
Hashington, B. C. 20575
Statement of
Win. 6. Colman. Executive Director
Advisory Commission on Intergovernmental RelatiOns
before the
bubcounittee on Intergovernmental Relations
Connittee on Government Operations
United Ltatea senate
May 10. 1233
The froposed Intergovernmental CooPeration Act"
and Related Legislation
Hr. Chairunun and Henbere of the Semittee:
Lam §ppea_r.ing on behalf of the. phat-roan, rth; BIXIE,
- was*7
_and members .oit-he Advisory Calebs-ion in. _agppp_1;t_9f tbs. grogosed
. -.~
_"Ln_t_e__§&qve_rnnge_n_t_a.l CogLer.a_t_i_oLA§t: and. tfrro._r_e_la_t_§d._ge_a_a_ureg.
In 195), as you well knou Mr. Chairman, the Congress
established the Advisory Comission on Intergovernmental Relations
and stipulated that in performing its primary function of developing
and considering Ways and means of fostering better relations between
the levels of government" the Comissionuamong other things--should
"provide a forum for discussing the administration and coordination
of Federal grant and other programs requiring intergovernmental
relations cooperAtion" and "give critical attention to the conditions
and controls involving administration of Federal grant programs."
.318. filmsmqumquoneretLens..1e__hued._qn testers;
_2f in: ma: aignifiggn; nding and recommendations fo_r__Fed.e_ra_l._
-q-..
JSLLMdvanqed ,by the .chisgiop during .th_e_p_ag.t_ sightlears. Th5
-13-
at least four of thehnewer pregrams, including the Narcotic ddigtion
.--~. -4... -r- -
_gpd-A1coh9}ism amendment;I legulatiOn of ;_;gace inigg_gpeg§§;gg§
-.-'~
Jesieliem. £119 Cicelemependeenm mm Imcstynessc
mteie..'_'§.ins .19 aasncJmLLLm-
The merits of the single State agency requirement now appear
to be largely historical. In the formative years of the public
assistance,[or example. the requirement was essential to bring order
out of chaos in the existing, as well as newly emerging public
assistance programs in the States. It was necessary then that the
Federal agency have one and only one State agency to deal with in
matters regarding public assistance and that this agency be held
responsible for administering these programs. With improved State
administration of Federal aid programs however and the pressing
contemporary need of the States to restructure their governmental
organisation in order to keep abreast of their added functions and
responsibilities. the kind of flexibility permitted by Section 204
is of the utmost significance.
_§igi§_application of aingle"ggen§g_5quirements can tie_ug.
- 0....-- ---
£Vm195N91L9L § 59.95 Jsmlstvtc. 19. EL 1r_Le9m_an.i%£Lt L09.
efforts. moreover, given the increasing number of grant-inraid
programs which r;4uire "multidisciplinary" packaging approaches, a
doctrinnaire adherence to this requirement appears wholly archaic.
Under this section, the head of the administering Federal department
or agency is authorized to waive the requirement on request of a
recipient State, if the department or agency is convinced that the
-11-
proposed alternative administrative arrangement will no: undermine
the program objectives caught through the grant.
ne oiche nest critical n ed; inucontegorgmigtergovern
.---._.l-.a -
mental administration is recgnition you concerned that the £55999;
have vagina administrative neede_a_r_xd capacities. This grovigion.inl
-- - ..._
Title II clearly. recgnizes this (act. and_givea Federal and Stats
u.a--l-
adminiiratgrs t'ne_Lcind of discretiggag authority reguired to-coge
with thiajlarcLi'act of intergovernmental managerial life.
Title_LI_1: jitlglu 0; §. .39§.c_eel;s to strengthen the role__
iMQQitignaJtiervices-in-aidlggnction in conteggoraujedggl:
295230921- r9 new): mite Federal.._L_de stream endeeencies
We. epccieutedgnissmityL sewiseeimeseemuocel
maullons 91L! -ELQEIIHADJLDSJIL A number of Federal depart-
ments and agencies already provide such services gratuitously or
at cost as a consequence of specific Congressional authorization.
the increasingly complex and technical nature of State and local
governmental activities. along with the soaring coats of providing
technical personnel and equipment, highlight the pressing need for
this permissive provision.
the .199 ha 1338 on _t._1.e.predeces§or tit}g,_ the question
_ar~s 3L9 whether this authogytiop cogetguted a threat to vgiogs
- ~ --._ ~ ............
businesgeg in tigepgyate sector. I§__i_s ougoynion that thelanguagg
_9___Se§§log.33_2.provi_dei_a)le safeguardsagginat thiapotentialij.
-.- _.--
ghggingghpn S, §§l,_§_lso raised the issue as to whether the Federal
-. - -...-'.-- m_-'OC~-"
Government c0uld-a§§ertaln ar1§911.the [Lsalaries and all cmuta;
- 12 -
overhead agd_iggirect costs_o_per£orminz.such aervices;;§s_i§
stipula§§d_ig,gectignujqz. The point here, of course, is whether
the Federal Government has an adequate procedure to assure fair,
adequate, and complete assignment of costs. In this connectionL me
understand that the Bureau of the ggdgetLuggter having consulted gigh
-- ~. -._ -. _...._
ggate_ggg'localnogficials is about to issue a circular rqmglgating
o a .
principles and standards for determining_cos£s applicable gosragtg_
and ggntracts_uith_§tate and lOcal.ggvernments. If this is feasiglg
u. a... rue-<-
in the grant;insaid context. we believe that there is no reason that
. -- _-.~-.._-_-__-
the same rules cannot be applied to the reverse situation cantemplated
._..... ovo_o .'
b1 Sectiog 3OZL_§hat isI to the provision of Federal technical
-.- Q
services to State and local governments.
*. w .
The discretiOnary power provided in this title would not
affect the pregrams of those Federal agencies that have been authorized
to provide Special technical assistance, facilities, or consultation
services without reimbursement. The "services-in-aid" policy
stipulated is wholly permissive and reQuesting State or local agencies
and the Federal agency involved would have to agree on the scope and
costs of the services to be performed.
Iiglg IV: 33g; title establishes a coordinated intergovernf
mental policy (gg.tgg_planning anq_administration of Federal grants
{gr urban dgvclqggg_§. With increasing urbanization, there has been
a rapid growth in Federal funds and programs available for such
development. The Commission, in its January l964 report, lgpact of
Federal urhggwpgyelppment Prggrams og_Lg§gl,§overnment Organiggtiog
- 13 -
ggg_£wgp§, identified some A3 separate Federal urban deve10pment grant
and loan programs administered by 13 separate departments and agencies.
An early 1935 survey put the figure at over 80 and the present figure
probably falls somewhere in the vacinity of 120 (using DHUD estimates).
During the next fiscal year, approximately $12 billion of the
more than $20 billion of total estimated Federal aid will be spent in
standard metropolitan statistical areas, according to the Bureau of
the Budget calculations. This represents a hike of about $8 billion--
or nearly 203 percent--over the comparable 1961 figure and a $3 billion
increase for the past three years. According to Department of
Housing and Urban DevelOpment estimates, the total Federal financial
commitment for FY 1969 for urban community and social deveIOpment
assistance may well exceed the $37 billion mark--or twice the 1961
level. These figures, it should be noted, are based on the projected
extent of Federal financial obligations or commitments to communities
of 2500 or more and include insurance and guaranteed loans.
The greatest growth in urban-oriented grants have occurred
in the areas of education, housing and community development, and
programs to better the position of the disadvantaged. They include
grants that go directly to the local communities involved as well as
those to States uhich subsequently are channeled to or benefit urban
communities.
The need for coordination and improved intergovernmental
relations is clearly greatest in our metropolitan areas where, accord-
ing to the l967 gensus of Ggyernmengg, the fragmentation and over-
lapping of governmental jurisdictions is accelerating. Title IV offegg
-14-
62-.ch'um-fqauttttmWEN-rm: JV! F§3Vmm "1"!!
-.~_
giggiy-priniqectlzy it) _s_uch.§rean up "or: tggcthcj :9 391.7939qu
gqbi_gg._ L: qu_:i.orize_athe Pgegidan: topstgiiglsmgrmtfaido
01.?! £9! size.ioml'stey._svluuti9n. and mist. {edsm 9512
gnigpnt ,:o;,;_§gq_anq_pr_ojects.(gection 40;): It'llhngprqyidga
12.. .9999? of nary-.8999! 99122:, in 3}.3997759 525393.
EggpoasiLch-gili 5:15! _ir.\59.§cc9'.".3: an vimpigt.gjltticngl,
5_t_at.gL_re3-.'o:.§1. an_d_ lqgalfiguthe foqulatiqqiaggl qtipatioq'ogucll
Mtg-p _lnri prqdects (gectiqn m. moreover, system-tic planning
required by swat-a1 individual Federal-urban programs shall-again,
to the extant possible-be coordinaud with and and. part of
comprehensive local and arcavide u:uan development planning (Section
1.01).
A specul feature of our federal system is that mat typos
of dauntic puLiic urvicu are administered by general locll
govemntuvcitin, counties, and towns. Yet,_opgcinl digtticto~ig
-.o_
mgitgdjtntca t:¢_ggpyiggdnt a twirling. 399.12.62- t9_1';-37.
mum experismi! 1§.99r¢_en: incrcaysi. 3.999%! 5901-9!
mu.th 21.339... It 11th: GMOBLQQ'O b01191.£b£mr!3¢d9¥'1.
aunt-inns! 1:31: latim-mku_hmh. IPecial. 99:99.09- 1999; 393mm
animus. of sensual. 19581. &mmmnt0. ellsibls. :9. mva when
mglemt 1DS.QD§.BI!9£!L min-91 menus-mm. £93m: $136 .lusm
menace.- of subptmul.m.nm :0 the GWUSH!_$!£F.199.§9.2.9£
LN; title, iwlewnujhipxgsb
- 13 -
Title V: xlslg V of S. 698 has a length! legislative histggz
..-.. e c.
ggting bg£§_to_the glth_§gggregg. It provides a uniform policy and
procedure for Congressional review of future grants-in-aid to States
and local units of government. In those cases where no expiration date
for grant authority is specified by law and where such grants are not
specifically exempted from the provisions of Section 502, a fivecyear
termination dete is stipulated.
Strangely enough, there is still considerable confusion concerning
the purposes anngsovisions of this title. Its basic purpose is_tg assure
w u ----- _-- ... o ..
that new grgntjin;gid program£_gill_beregised and redirected. as_£5cgsf
km to geth-owinggwmueeds yhicthe! were originally
deligheg to suppqgt.
Grants-in-aid. as was noted at the outset, constitute the Federal
Government's principal weapon for accomplishing national legislative
goals in the domestic arena, while at the same time maximising inter-
governmental cooperation and reliance on grassroots of governmental
administration. Yet. one perennial criticism made of Federal grant
programs is that once established they tend to continue of their own
accord without substantial modification, even when the circumstances that
prompted their establishment have changed or disappeared. The need for
systematic reassessment of grant-in-aid programs is especially important
in a period of rapid urbanisation and technological change. such as we
are now experiencing.
The Advisory Commission in its report on Periodic Congressional
Reassessment of Grenh-irrAid to State and Lace} Governments (1961). and the
Joint Committee on Congressional Reorganization in one of its major
findings clearly underscored the need for this title. As a matter of
fact, it serves as excellent complementary legislation to Section 105
of the proposed Congressional Reorganisation Act (8. 355 and H.R. 2595)
which authorizes "review analysts" for each of the uajor standing
committees of Congress.
With reference to the five-year termination provision, which has
occasioned so much debate and little agreement, the follouing points
should be noted:
-- It obviously does not apply to those future grant-in-
aid prograum that would have a termination date;
-- It would not apply to grants wherein Congress had waived
application of this termination provision; and
-- It would apply only to those grants which Congress--£or
some reason or other--feiled to designate as ongoing or
short-run prog:ama.
AL! .9: acticolsegaunsiuij- the restaurant. (mucosa;
in-eid voglg_§g_aj§ectgg 21 this tggminetiqy_pgggisiog. Our staff
analysis of recently enacted grant programs indicates that Congress as
a matter of c0urse now provides expiration dates for almost all grant
programs. Of the Al enactment of new or expanded grant programs in 1965.
all but three contained expiration or other limiting provisions (the
three include: USDA'a program for Water Works and Sewage Plants in
Rural Areas, and two programs authorized by the Social Security Amendments
of 1905). Of the.39 major grent~igyaig_enecgggggg'in 19cc. only (our
ggg;.igg_ng_g§pigstipg grovigign_(sir Pollution Control Maintenance. the
Nonfood Assistence progren under the Child Hutrition Act of l966, the
National trust Historicel Preservation legislation, and Assistance for
Housing in Alsske). Of the 17 enacted during the first session oi_£h=
-- _.-.--
W95D..mly_2m_nu_m wingpmxmi 0 (nut
Inspection Act). um.m._qmuw.pmsu1m_nr__s__tn M- vigil.
Wacmmm She. gammypsnssl
lacks such eproviaion. He would like to submit for the recorg_g,iig§
_.-__ --. --..--
2LL.__.._"".19. 93039913352133.1us. 5.112. 995W
2112;.th essns..£9-.2__2wh1 memvtievWMMM~
"011- t___-b1s shes-.19- allyM fut ghpgsjhoWM
with elegg.
Hith reference to the final three sections of Title V, we egree
with the position taken earlier by the Bureau of the Budget and others
thet Section 506, which cells for studies by the Gosptroller General of
Federsl grant-in-eid programs, would simply give greater focus to the
efforts of CA0 end would result in e better servicing of the needs of
the reviewing cannitteea. It is our belief that the Couptroller General
now has the authority to undertake the mission sssigned to him by this
section. Similarly, the role eeaigned to the Advisory Con-ission on
WW! Reletione under Section 505. while creating possible
{M O. within the Conniesion's present mandate
dNVNTJ. c 3.3. a V
"to lake eweilehle technicefiikenee-u eucutive and legisletive
u 1 -
branches of the Federal Government in their review of proposed legislation
to determine its overall effect on the federal system."
The question
raised in the l9LS hearings as to a possible conflict regarding the role
of Federal executive members on the Comission appears to lack much
substance. since any member of the Commission is always at liberty to
dissent to or abstain frOm recowmendations adopted by the majority.
Finally, the GAO records and audit authority stipulated in Section 506
is simply in accord with good fiscal management practices. Host grant-
in-aid legislation containssuch provisions, but the general authority
provided would remove any ambiguities concerning GAO's power in those
few instances where it is lacking.
Title VI: This title constitutes an entirel _9eu departure from
_- -._-._-
._L...__thc r-viou _.lss.-.19.t392_£i5!.§-sgiLnedJPJX_____L__er¢m the "liferssrrii
Federal grant progrgps by authorizing the frgsigent to submit to Congress
*Avo ._
plans for the gopsgl dation of individual catewories within broad_£gn§tional
.. .-.....-_..9._.
areas. Such gushority would be subject to the type of Congressional
~--a ..._ .m._. --.-.o
veto that presently applies to executiye_re9£ganization glans.
L; is almostggggrfluousI Hr.N§hsirmapI to declare to this
-..._._- -. .. -4
Sub ommittee th t the proliferation of Federal grants has created serious
- -e .--a.- u .. 70-
gigcal and administrative problems atall levels, Yonr "Creative
Federalism" hearings as well as those of the Subcommittee on Executive
and Legislative Reorganization clearly reveal the detrimental impact of
such factors as the lack of information concerning sources of available
funds, the overlapping and duplication among functional programs, and
the inflexibility of many separate funds and requirements on capacity
of both administrators and elected officials to effectively execute,
coordinate and evaluate grant-in-aid programs.
Consolidation then is a top griority item on practically every-
body's check list on how to strengthen the grant-in-aid system. Unfor-
tunately, consolidation is far easier to orate about, than to achieve.
Certain encouraging steps, however, have been taken at the Federal
level to achieve greater ratiOnality in the maze of programs by grant
consolidations.
First, under the leadership of the Department of Health,
Education, and welfare, which administers approximately half
of the grant program; the ConprehensiVe Public Health Planning
and Public Health Services amendments (Partnership in Health
Act) were developed and subsequently enacted by Congress.
This Act consolidates several previously separate categorical
programs and established a single authorization, appropria-
tion and set of requirements. Under it, the States are given
considerable discretion in developing their own health
services in light of their own special needs.
Second, President Johnson in his March l967 message on
'1he Quality of Government" announced that he requested the
Director of the Bureau of the Budget to review the range of
Federal grant-in-aid programs to determine additional areas
where consolidation should be taken. Pursuant to this
Presidential directive, top level HEW officials have been
working with the Bureau of the Budget in analyzing possi-
bilities of further consolidations in HE administered
programs.
Third, this year two additional consolidating measures
were introduced by the Administration for Congressional con-
sideration: the proposed Partnership in Earning and Learning
Act (8. 3099 and 3.3. 15066) and the proposed Consolidation
of the Educational Opportunity Grant, National Defense
Student Loan, and Work Study Programs (Section 602 of S. 3098
and H. R. 15067).
Eggsure, as a_whqlg, was specifically endorsed By the Commission~
--- Cs... .v-
as its 42:11.14. 1.267-313-
... - ....
has; meats: .t__h18...i.es..181.atin .18. oistitiuLPiseieencs-
since it_gomes_to.grip with several of the major management probyggi
'-__- .-
£294.11 uc (SCHEIMG alt-"Ltesetlesel-r.¢.185&911_291 revs Public
.-
administration is_g_prime prergguisite for improved intergovernmental
-- r 9
relations and this legislation--in all.gi it
-c..- Q.-. . -
titles--is geared*to
cu- ~-_-
.gghigving this. To put this legislation in its proper perspective,
certain basic ieatures of the contemporary grant-in-aid system
should be noted:
-- the twin pressures of population growth and rapid
urbanization have generated greater demands for
more and better services traditionally provided
by state and local governments. These, in turn,
have triggered an expansion of Federal involvement
in several domestic program areas--largely by
means of the grant-in-aid device and quite heavily
in recent years. From 1933 through the end of
the last session of Congress, some 240 new grant-
in-aid programs were enacted, bringing the total
to over 400 separate categorical authorizations.
-- Grant-in-aid expenditures thus far have increased
more than two and one-half times in this decade.
rising from $7 billion in fiscal year 1950 to an
estimated $18 3 billion for this fiscal year. All
told, some $98.3 billion in Federal aid has been
dispersed to State and local jurisdictions during
this nine year period.
-- This extraordinary expansion in the number and
dollar amounts of grants-ln-aid clearly signifies
a greater acceptance of the partnership principle
which undergirds this intergovernmental device.
It also signifies a rejection of the centralizing,
direct Federal Government-citizen relationship-
. 70 -
To date then. grant consolidation has followed the normal course
of the legislative process. A major rationale for this approach is that
combining grants involves changing varying legislative requirements
concerning allocation formulas. matching ratios, as well as the basic
responsibility of Congress for determining the direction of Federal funds
to achieve special and national objectives. The principal defects of
this method are of a political and more practical nature. First,
middle management administrators at both the State and Federal levels
frequently are unfriendly to departmental efforts to consolidate programs
which they administer. Second. special interests which usually attach
themselves to the grant aided functions frequently sat up political
obstacles to Congressional efforts which threaten to upset the grant-in-
aid status quo. Third, the practical problems imposed by the complexity
and divergent program goals of the existing grant structure hinder the
formulation and effective implementation of morkable consolidations.
These factors combine to hinder both departmental and Congressional
endeavors to achieve grant consolidations through the normal legislative
process.
The approach embodied in Title V1 is geared to overcoming some of
these obstacles. Under it. the President would submit grant consolidation
plans to Congress under procedures similar to those used for administra-
tive reorganisation plans and this would place primary responsibility for
this effort in the Executive Office of the President. A plan would be-
come effective at the and of ninety (90) calendar days of continuous
- 21 -
session of Congress following its transmittal, unless either House
passed a resolution disapproving the proposed consolidation. Zach plan
uould involve a consolidation of individua; programs within the same
functional area and would focus administrative responsibility in one
Federal agency. specify the formula or foruulas for making the grant,
and describe the differences between the new formula and those under
each of the previous individual programs.
Some opponents_9thhia "reorganizational plan approach" have
o-A~
- ~ap
contended that it involves an unconstitutiongl_delegation of legislative
-. _... .~.._ __.-.w-- -
authority toughe-£§e£gtige branch. He are c9pyinced--and_varipg£
-u_ s an..-
authorities support us--thst the issues involve
a- o
d in this argument differ
--_a--o..-
in no respec5_frgp.thpae that apply to the Reorganisation Act of_}292,
as amended. thus far. thglatter has_been vptgd by Congress on seven
different occasions agg_5enewel_is again_p$nding. Conggesa' action then,
. .- uo-w-o
alon with court_caaea_g£holding the validity of the ActI clear}y_dewon-
.---~~"- #-- .-._r _
strata the constitutionality of this device.
._.
The Advisory Conmdssion in its massive study of Fiscal Balance in
the Amegicgn Federal System recommended a drastic decrease in the number
of separate authorizations for Federal grants and specifically sanctioned
the method set forth in this title as a ueans of furthering this objective.
Title VII: Eitle_!£} amends the Fedgrgllropegtz and Addinistrg:
tive Services Act by_stipulating a unifgsg procedure for acguisition3_u!5
and dispgsitich_of_la2d within urban areas by the General Servisea
"a ---
Administration in conformance. to the extent possible. with local
wo---~. v------.._oo-
- 22 -
ggyernnents' planning and land use goals. The U. S. Conference of Mayors
w_-__. .
and the National League of Cities have adopted specific resolutions calling
for this title and it is wholly consistent uith the findings and recom-
mendations in the Commission's report on the lgpact of Federal Urbgn
ngelopggnt Progra-s on Local Government Organization and Planning.
Under the provisions of this title, the GSA Administrator in
disposing of Federal urban land holdings, shell, to the extent practicable,
give advance notice to the general local government having zoning and
land use jurisdiction over the land involved in the proposed transaction.
The Administrator is also directed to comply, to the extent possible,
with the zoning and land-use regulations of the local governnent affected
when acquiring or changing the use of any real property in urban areas.
ngeral land.ag3uisition gigpgeal practices in urban areas clearlz
-....'- ----.o.
mvg gigguicsntnrmgsct on locslgghgolshwater and sewage scruff};
highvazs and street! and other local govergpentsl functions. Met present
u-.-_- -_ _-_-
there is no formalggcderal pglic vith_respect 59 these practices, in
._._ w--.- --p--ov-
ggntrggt tg_£helplsnning reguireggntg in sevgggl_grant programs tha§_ge3§
Messiaen le¢a1m§.mid_£e lamina and. .1991? "Ll'tiPl' T1!
notice required in disposition proceedings would give local governments
an opportunity to none the use of such land in accordance with local
comprehensive planning objectives. oreover, the GSA Administrator in
such proceedings, to the extent feasible, would furnish any prospective
purchases with local planning information relating to zoning, land use,
and other regulations which would be applicable to the use and develop-
ment of the property offered for sale. In acquiring or changing the use
- 23 -
of reel preperty in urban areas. the Administrator,to the extent practi-
cable, would consider all objections made by the affected local government
relating to possible conflicts with its zoning regulations or planning
objectives and GSA is required to comply with such regulations and
objectivea--to the extent he determines feasible. The language of this
title clearly protects the Federal interest in these various proceedings.
At the same time, due consideration is given to protecting the legitimate
planning and land use objectives of urban local governments.
The thrust and even some of the language of this title closely
-.p --...._.. --.a ... .d; ---_.e-
resemble legislation_enacted in the 6C5§_§ongress establishing similar
u --0-
procedures for sale or disposition_2£-public lands by the Department of
-w-.. .--a-
Interior (78 Stat. 98;). The following excerpt from the regulations
_,.__.
issued by the Department of Interior on this Act (Federal Register,
February 20, 1965) demonstrate that the procedures established in Title
VII of S. 698 are both practical and desirable:
Disposal programs will be scheduled in a manner to make
all actions consistent with established or proposed State or
local governmental programs and with State, county, and other
local governmental master and detailed plans. Disposals within
the area of influence of growing communities will be deferred
until local governmental master plans have been adopted and
zoning regulations are in effect. However, in the absence of
master plans, critical needs in such areas or influence may be
met if such action appears proper to the authorized officer
after consultation with the appropriate local planning and
governing officials.
No less than 90 days before offering for sale lands which
have been classified for disposal under the act in accordance
with the procedures in part 2410, the authorized officer will
notify the head of the governing body of the political sub-
division of the State having jurisdiction over zoning in the
geographic area within which the lands are located, to afford
that body an opportunity to zone the land for use in accordance
with local planning and development.
- lg -
_F_u_rthergnore, th~e_te3timonz on Hatch o, 1967 of Mr. Boyd
Rasmussen. -Qirector of .Inter_ior's Bursa}; g_£_Lang_Mnagmnt bef9_r_e {he
WMQU99991158§-2LL2P11£MD§£ 9f, thgjgrior and Insular
UiairsJemitteavwliinsenethy. bungeewedmmws Me
What. LheJoulhnimmmreqUirenenuz the Public}!!!
memuammmnses- in. .IeterisJJLr'o d amaen
warn: and afforded the Dceartment_ma_jor ggppfliunities to strengthen
___£._.__1t" overmeenipl. I.¢.19____C18-QJDLEJHMDQIIIJ. Fm'wsgw. LE
mummt-.chs- Dem; mime Statesmaeiwmnyoiys- J9.
using to 3001 advent-age.
Title VIII: lhis title establishgq a_unifom Elie! for the fair
and eguitablirel cation of gerLand _L_u_§in_e_a_a_ea forced to move):
._...
F_ederal or federally assisted Erqggm, _H_i_th the angtion of tiff:
---- --_- ._..
grovisiogs relatipgto land acgsitiogvhjch are now covered by Title
1m l..- a use .-_-__..
IXI Title VIII is identical to a soggy. bil_l__yhich gassed th__e__S_enat_e
.-w.---__ ----a
93.9112 22 ljbgqbu't. _died in House coursistee.
The Congisqion considered the _i_a.s_u_e___o_£~__l"ederal relocation policy
w. .-..-_. ._.o-
in a report, approved in January 1965, on Relocation: Unegual Treatment
of Page and Businesses Disgiaced b; Governments. This reporturesoLtefi
in the subsequent _i_n_tt_o:d_\§tion by zoo. Qiiaimangot S. 1681.
The Comission undertook the study of relocation when it became
concerned over the reported lack of uniformity in relocation policies
among and within the three levels of government and the resultant
inequitable and inconsistent treatment of those displaced. It felt that
- 25 -
the problem had clear intergovernmental implications, particularly Le-
cause the federally assisted urlan reneua- and highway programs cause
most of the displacement nationwide, and the displacement occurs mainly
in urban areas where intergovernmental relations are most critical.
The heart of the Coundssion's Bgiocation report was an analysis
of governmental policies and practices in relocation current at that
time at all three levels. A fundamental sosrce of information was a
questionnaire survey of the practices and policies of cities over 100,000
population conducted jointly in the summer of 1964 by the Coumission and
the U. 5. Conference of layers. In addition, Commission staff worked
closely with the staff of the Select Subcommittee on Real Property
Acquisition of the House Committee on Public works.
The Commission found that governmental responsibility for helping
displaceos to relocate stems from two sources: (1) government's exercise
of eminent domain in acquiring real property: and (2) its concern for the
economic and social welfare of its citizens. Under the Constitutional
doctrine of eminent demain in the United States, government can £2553
people to sell their property. The property owner thus cannot refuse to
sell if he believes the price offered is insufficient to compensate for
all costs of reestablishing himself. Since the courts generally have
limited compensation to the fair market Value of the real property
acquired, property owners and tenants must look to the legislature to be
compensated for incidental costs not covered by the value of the real
property taken.
- 2c .
Unlike property owners disxlaced by public acquisition, owners
displaced by private acquisition can hold out for a sales price which will
assure them compensation for the cost of resettling, as well as the value
of their real property. Tenants in either case-~public or private--have
little protection. Lover inco-e groups are usually renters and find it
most difficult to rehouae and readjust.
Government for many years has had a policy of concern for the
economic and social opportunities of its citizens. This concern logically
should include the social and economic effects of forcible displacement.
particularly at this juncture in time.
As a general principle. therefore. the Commission concluded that
persons and businesses displaced by local, State. or federal public works
and other programs are entitled to assistance in relocating, and this
entitlement extends to lessees and tenants as well as to owners of homes
and business establishments.
Nine major findings arose from the Conuiasion study:
-- It found that governmental displacement of persons and
businesses is substantial, particularly uith respect to the
federally aided urban renewal, highvay programs, and local
code enforcanent. lbreover, all indications are that the
rate of displacement will continue to grow. Thus, it is
noteworthy that while the House Select Subcommittee in
1966 eatiaated future annual displacenent of families and
individuals by highway department: at 36,770 and businesses
and nonprofit organizations at 3,876, a 1967 study by the
Department of Transportation estimated these annual figures
for the period July 1967 through June 1970 uould be £8,983
end 5.559. respectively.
-- The Commission discovered great inconsistencies in present
provisions for relocation assistance. These inconsistencies
are among different programs within the same level of
- 27 -
government--locai, State, and Federal--and among levels of
government. They concern the amount and scape of relocation
payments, advisory assistance, and assurance with respect
to availability of standard housing. Nationwide, federally
aided urban renewal and highway programs cause the most
displacement. The urban renewal program makes the most
comprehensive provision for relocation assistance, but
relocation provisions of the highway program are appre'
ciahly less equitable.
The effect of the inconsistencies is felt moat keenly in
urban areas where programs of all kinds at all three
levels of government most frequently come together--where
different Federal and federally aided programs displace
neighboring properties. A homeowner whose property is taken
for a federally aided urban renewal project is entitled to
moving costs up to $200. his neighbor, whose property is
taken for a federally aided highway program, is entitled to
$200, but only if the State has authorized it. As of
April this year, lb States had not authorized such pay-
ments, and even among the States that have, an appreciable
number have not authorized payments up to the Federal
limit, or not for tenants and lessees. A third homeowner
in the same neighborhood may receive nothing at all if
his prOpcrty is taken by General Services Administration
for an office building. Inconsistency in payment of
business moving expenses is even greater since the
Federal Aid Highway Act allows business moving expenses
only up to $3,000, whereas displacement by a federally
aided urban renewal project entitles a business owner to
as much as $25,000 for moving expenses. Displacement by
GSA would be without compensation for moving costs.
The worst problem in relocating families and individuals
is the shortage of standard substitute housing for low
income groups.
Nonwhites have the most difficult relocation problem of all
population groups. This comes from their generally lower
economic and educational status; the impact of urban renewal
and code enforcement programs on neighborhoods where they
are concentrated; and public and private practices that
restrict their access to housing.
Large families and the elderly present other special housing
problems.
- 23 -
-- Among business displacees. small businesses, particularly
those owned and operated by the elderly, are the main
dislocation problem. The typical displaced small business
i. an independent commercial establishment, a partnership,
or a proprietorship rather than a corporation. The elderly
generally have less capital and find it more difficult to
secure outside financing. They have little energy or spirit
to resume business in a new location. Their problem is
most serious when they operate their own business and depend
on it for their livelihood. Their businesses are usually
retail or personal service stores, dependent on long-developed
neighborhood patronage.
-- Advisory assistance is of growing importance in the relocation
process.
-- The relocation process often discloses the social and
econouic needs of displaced persons, and thereby offers s
unique opportunity for helping less privileged social and
econo-ic groups.
Three years have elapsed since the Commission adopted this Report,
but there has been little change in the basic conditions it criticized
then. The consequences of inconsistency and inequity in relocation
policies and practices have become worse, if anything, because of the
continuing rise in displacements caused by governmental programs.
3 Ahead} #0501; .th- .. .s-Aen 19.196ieetgdLLund AM}. the.
_m_n_st serious
inequities in Fedg£93_relocatiqn policies arose because
-. -_- v --r-~ -- 6--
.--_o.- . .. -wo veumo group-'-
highpgy_prqgrang_cquse aboutggg-third_g{_the relo stion_pr lem and the
Milan! ant-.9ch sud mu 18-9%-.tln.ti.u..lagl.t£h¢£.015
the Mchen1 -UJRLO.£1.P_&_P.{OIL'I'rqlib'L 09.41.: R 1' theteigte.
.gignificant that a special 1967 study on highgqngelocation assistance
..-.-.--- .-.-_'~-- g... ~"n--w-~-'.
undertaken by the erartment of Transportation_pursuant to Congressional
--.-- --o.- -'oo----
mandate in Public Law 89-575 strongly-sorrobo£stea the principal findings_
a-.m -. mO-O... O-..An-|
.g£_the ACIR study. The DOT study states, for example:
- 29 -
As the highway program has moved forward with a desirable
acceleration, the problem of relocation has become more and
more aggravated and has affected more and more individuals and
businesses. There is an urgent need to fashion a better solu-
tion to the urban relocation problem than has existed heretofore.
This is not a problem peculiar to the highway program
alone. It is equally as acute in urban renewal, public building,
construction, reclamation projects, and other public improve-
ment programs. In fact, to the extent possible, a generally
uniform approach to the solution of the relocation assistance
problem seems indicated.
In summarizing the results of consultations with urban officials
throughout the c0untry, the DOT report states:
The problem most frequently mentioned at over 80 percent
of the meetings was the disparity of moving cost payments
allowed under urban renewal policy, Federal-aid highway
policy, and State legislative policies.
The second problem most frequently referred to was the
lack of uniformity of the many relocation assistance procedures
within the large urbanized areas. There were differences in
payments, time element, administrative practices, planning,
elipibility rules, etc.
Still another problem mentioned was the low income of the
minority grOups displaCed, which in turn created difficulty or
in many cases inability to relocate to decent, safe, and sani-
tary housing units without welfare-type assistance. .
Uniformity in relocation procedures and moving payment was
the most emphasized rec0mmandation at the majority of the
meetings. The lack of uniformity of the many governmental
agencies created some bitterness and disillusionment in the
large urban areas where several different programs were in
operation at the same time.
The findings of the Commission's 1965 report are confirmed almost
daily by reports in the news media of public confusion and outrage at
inequitable relocation policies. In the Portland Oregonian of July
7, 1967, for example, there appeared a story under the title "Businessmen
Object to Sacrifice Freeways Demand, from which the following is a
direct quote:
- 3 .
-- The extraordinary number and variety of grant
programs, however, have led to serious problems
of overlapping, fragmentation, information, and
difficult management at all levels.
We know now that management is as important as legislative
enactment. Is also know that while executive orders. Budget Bureau
circulars, and departmental changes in procedure can correct 525;
of the difficulties in intergovernmental administration, other
management headaches stem from statutory provisions. from uncertainty
as to power of the Executive Branch in certain areas, and from the
fact that the President needs extra authority to discharge his
tough assignment as chief manager of the grant-in-aid system. we
feel the proposed legislation advances sensible solutions to several
of the pressing problems impeding improved intergovernmental
administration.
Ike bill!_a=_introduced!_seeha_re§orm in eight basis areas:
In the subsequent discussion of its eight substantive titles, efforts
will be made concerning those provisions that appeared in predecessor
legislation (2. 561, the proposed "Intergovernmental Cooperation Act
of 1965" and o. 1681, the proposed "Uniform Relocation Act of 1956"--
89th Congress) to provide up-to-date background information regarding
their relevance. The new titles in 3. 398 (Titles VI and 1x dealing
with Presidential authority to submit consolidation proposals to
Congress and with establishment of a uniform policy on land acquisition
practices respectively) receive more extensive treatment.
- 3o -
. . just as the Oregon State Iighway Department has
started buying up right-of~way, s new problem has arisen:
Who will recompense the hundreds of small business estab-
lishments in its path?
Homeowners,of course, can simply sell out and find another
home with more or less degree of inconvenience or emotional
impact.
But what about a small business, with a clientele built
up slowly over the years, and with little or no reserve capital
stashed away?
And what about the lost income this little business is
bound to suffer through relocation?
Even if the business could be moved--where to? A strictly
zoned metropolitan city such as Portland offers few opportunities
to find a suitable substitute location.
These were the questions flung at State and federal poli-
ticians and bureaucrats alike by a small group of businessmen
in Southeast Portland at a public meeting called to seek support
for relocation compensatioa.
"A freeway project costing millions in tax money should
not be allowed to bankrupt small businesses in its path," said
Jack Jensen, owner of a dry cleaning establishment at 9543 53
Division St. .
The state and federal agencies which finance and build the
freeways pay only for the costs of moving the equipment to anothqr
location--and not very much at that, in most cases.
The businessmen were told by state and federal representa-
tives that this reimbursement for moving varied by statute from
$200 to $3,000 maximumv-no matter what the move cost.
State Rep. Howard D. Willits, who was chairman of the
meeting, commented that the politician frequently described the
small businessman as the backbone of the economy, especially
during political campaigns, but when it came to protecting his
interests in such cases of inequitable dislocations, he is
woefully neglected.
- 31 -
Adolph E. Susan, regional appraiser for the Federal
Highway Administration (formerly Bureau of Public Roads)
said it was indeed a deplorable situation and blamed it on the
lawmakers who wrote the statutes allowing only "reasonable and
necessary moving expenses."
He said he was sympathetic and he thought members of
Congress were, but until the law was changed nothing but
sympathy could be dispense in the matter of compensation.
0n the basis of its findings, the Advisory Commission on
Intergovernmental Relations made 14 recommendations for local, State, and
Federal action to meet the problems of persons displaced by governments.
The recommendations fell under six major headings: (a) uniformity of
relocation advisory assistance and payments; (b) assignment of respon~
sibility for determining relocation payments: (c) assurance of the
availability of standard housing for displaced people; (d) financing of
relocation costs; (e) modifications of related Federal programs to ease
the relocation process; and (f) local organization, technical assistance,
and planning for relocation. For Federal action, it recommended:
1. That the Congress establish a uniform policy of relo-
cation payments and advisory assistance for persons and businesses
displaced by direct Federal programs and by Federal grant-in-aid
programs, and that the President direct that the necessary steps
be taken to formulate uniform regulations for carrying out such
a policy.
2. The Congress should require that State and local govern-
ments administering Federal grant programs assure the availability
of standard housing before proceeding with any property acquisition
that displaces people. This requirement should be at least com-
parable to that in Federal urban renewal legislation, assuring
that (a) there is a feasible method for temporary relocation of
displaced families and individuals, and that (b) there are or
are being provided standard housing units within their financial
means and in areas reasonably accessible to their places of
employment.
- 32 -
3. With respect to financing relocation payments under
federally assisted programs, the full costs of payments to any
person for relocating a family, and the costs of payments up
to $25,000 to any person relocating a business, should be com-
pletely reimbursed by the Federal Government; and the costs of
business relocation payments in excess of that amount should be
shared on the basis of the cost-sharing formula governing the
particularly program.
4. The Small Business Administration Act should be
broadened to authorize disaster loans to small business con-
cerns (a) that suffer substantial economic injury as a result
of a construction program conducted by State and local govern-
ment, as well as one conducted by a Federal or federally aided
program; or (b) that are adversely affected but not actually
displaced by government property takings.
5. The executive branch should: (a) authorize and
encourage all Federal agencies causing displacements in urban
areas to centralize in a single local agency in each major
urban jurisdiction, through formal or informal agreement. re-
sponsibility for administering relocation planning, payments,
and services; and (b) require all displacing agencies to give
advance notice at the earliest practicable time to local units
of general government of any construction programs which will
cause displacement.
Title VIII of S. 698 would carry out these recommendations.
Basically, it would establish a uniform policy of relocation payments and
advisory assistance for persons and businesses displaced by Federal
direct and grant-in-sid programs. Thus, under Section 802, heads of
Federal agencies are required to make relocation payments in direct
Federal programs causing displacement, such as GSA, the Post Office
Department, or the Defense Department, in accordance with regulations
established by the President. Section 803 requires the same agencies to
provide relocation assistance programs and specifies that these include
(a) determining needs for assistance, (b) assuring the availability
of standard housing within a reasonable period of time prior to displace-
ment, (c) assisting businesses and farm Operators in relocating,
- 33 -
(d) supplying infatuation regarding FHA. SBA. and other assistance programs,
(e) helping in minimising readjustment problems, and (f) coordinating
relocation with other project activities and governmental activities in
the community or nearby areas. This section also broadens the Small
Business Administration Act to authorize disaster loans to small concerns
that suffer substantial economic injury from construction conducted by
State and local governments or that are adversely affected but not actually
displaced by government property takings.
Section 807 extends the requirements of Sections 802 and 803
with respect to payments and advisory assistance to federally assisted
programs conducted by State and local governments.
Section 807(b) is in accord with the Commission recommendation
that the Federal Government fully reimburse State and local governments
for relocation payments up to $25,000 in federally aided programs and on
a formula cost-sharing basis for any portion above $25,000 per displace-
ment. The Federal reimbursement would be contingent on the State or
local agency's agreeing to provide relocation payments and advisory
assistance as prescribed by Federsl lav and regulations.
Finally, Section 805(c) follows the Commission recommendation that
the executive branch encourage Federal agencies causing displacements in
urban areas to centralise in each major urban jurisdiction responsibility
for relocation administration. It provides that the President may require
any Federal agency to carry out its relocation functions by entering into
contracts or agreements with any State or local agency for use of its
relocation facilities, personnel, and services.
-31.-
To sum up, the Commission's recoupendations are Erecisg}y_ip_
....-_.-..._.-.
accord with those in Title VII! with respect}qu unifornitlggsoni
_ ~._.- ...._. -.-
.5.-.
Federpl Indiegerallngsisted Etgfl'l_ conceinigysiocetion Baymente
and adviaglapaiatenceL b assurance of Rroyieion of s sgpllx of s_t'an_da_r_d
-o- ~
hgusing _fgr_.th9_ee displaced. Le) Federal__reiabursenent for re'lhogption
w-.. >vgr ou-
ggensg! in federally eided Egg-grams, and {digegeral encou_r'a§eu_en5_ 9.f_
mdigtiog of relocation administration in pajor urban geas.
_ -_._-- a- --.-o-_.. w-.~-.o~- -.---
A relevanLquestion iszjihgt uou_ld_be_ the cost to the Federal
.o.-- " _.4
Government of the proposed provisigns gar relocationpaznents cox-feted
to the cost of present provisions? It is extremely difficult to make an
- - --
estimate because of the lack of recent data on displacement of people and
businesses by programs other than the kill!) and highway programs, and on
the number of diaplacees likely to be eligible for the $1,000 adjustment
payments for families and the $1,000 and $5,000 relocation payments for
farmers and businesses, respectively. within these linitationa, Evil
mmoyeh penis-ate. $118.2 M! t0. the Feiwsglmu $95!!
mummy. 51.1.1.1 piigfim'l have. bsznmstljillispigop;
red to anestinated £0 million cost under exiitingfilggatiot
was pavilions, Of the total increase. of about $39 million, ebou_t_
-.-- --
§29 lillion is attributable to the ghgay. pic-gramI resulting £1799
extension of cogerggngBJB in FY 1967150 50 States liberalisation
*"-l *0--. w v'-'..
of relocation paypegts __and the browsed increase in the Federal _s_har_e
.- .._
of relocation ppyyseptg from 20 Eercent _o.f_ig_te.r.atate roads agijO gergegg
on grimy .end seeopda'ryid! uE t9___l_QO percent for all Eamon}: .o_f_
-35-
$25,000 or esa. another 3t millign_of tn: total increase would he (or
--. .o...- ---u .m
the HU§_£rgg_aqg,_ggain reflecting liberalisation of relocation payments
_. ___-- _..__...- . _---.-- ..- ~ .
groviaiansa The remainer o§_tng estimate increase is accounted for by
on... .----.._. . ..-- ---~
lQetelizegmments. 311.913. 0.1:? 903.3. 3113.13.32... £951 1111.: 1.£E**._.
mm bl _fogr__F_e_(;e,ral azgngige _r:ot non. reg toursing for._1:_elocatio_n
exreeeeeaimthelemetiowl 30.99%)? snc: .14?:-:r..00m181n, .91?
a.-. .-o-._.
root Office Degargnentlgggzyg.
In conclusion, we should note that in its report the Advisory
Commission also urged States to adopt unifon: telocation policies to
govern strictly State-local activities. An increasing number of States
in recent years have acted to establin :nrsistent relocation practices
within their borders. including the payment of relocation costs. As
early as June l9c, the lennsylvania legislature authorized payments of
relocation loving costs as tart of the State's first comprehensive
eminent domain act applicatle to all yroperty takings by State and local
agencies (hIUB of Pennsylvania, Act to. E, 1944). The lonnsylvania law
provides that "just compensation shall consist of the fair uwrket value
of the real property taken, plus such other damages as provided in the
law. The latter include the following and are payable to both owners
and tenants of real property: (1) reasonalle expenses of removal,
transportation, and installation of machinery, equipment, or fixtures,
not to exceed $25,000 and in no case to exceed the market value:
(2) business dislocation damages, where it is shown that the business
cannot be relocated without substantial loss of patronage--paynents may
- 36 -
be no more than_$5,000 and no less than $250; (3) moving expenses for
personal property other than machinery, equipment, or fixtures, not to
exceed the market value of the personal property.
In 1965 the General Court of Hassachusetta passed a law requiring
payment of moving expenses of up to $200 to families and individuals and
up to $3000 to businesses when displaced by agencies that exercise the
power of eminent domain (Acts 1965, C. 790). Any proposed acquisition
involving displacement of occupants of more than five dwelling units or
more than five business units may not proceed until the central bureau
of relocation in the State Department of Commerce and Development has
approved a relocation agency and a relocation plan for the project. The
relocation plan must include evidence of "the availability of safe,
decent, sanitary housing and commercial buildings within the means of
occupants to be displaced," and a program for relocation of the occupants.
In 1967, the New Jersey legislature passed an act (Public Laws
1967, C. 79) requiring any State agency or local government causing dis-
placement to pay relocation costs of up to $200 for individuals and
families, $3,000 for businesses and nonprofit organizations, and $4,000
for farm operations. It assigned to the Commissioner of the Department
of Community Affairs responsibility for certifying that displacing agencies
have workable relocation assistance programs in effect before forcing
anyone to move.
-37-
Lat year, the Connecticut legislature created a Department of
Community Affairs and assigned it important relocation responsibilities,
including the administration of grants-in-aid for relocation payments
made by localities (Public Act 522, Lava 1967. Sec. 24). The commissioner
of the Department is authorized to give such aid to municipalities for
relocation payments up to $250 for any individual or family and up to
$25,000 for any business concern or farm.
Federal and federally assisted programs, however, cause the great
bulk of relocation traceable to governmental action. It ill becomes
the Federal Government then to lag behind the States in treating fairly
those on whom it inflicts hardship by its many property taking activities.
This is one more reason the commission believes a uniform and equitable
policy of relocation assistance as provided in Title VIII of S. 698 is
long overdue.
-32..
Iitle 1X: This title of 5. 59C establishes a uniform policy
on land acquisition practices used in Federal and federally assisted
development programs, and cggnlements the previous relocation title.
In recent years, there have been growing complaints concerning
the equity of government agency land acquisition practices, the adequacy
of traditional standards of compensation, and the sufficiency of
assistance to persons adversely affected by Federal direct or federally
assisted public improvement programs. These problems have been largely
treated on e piecemeal basis, with consequent inconsistency among
areas covered and inequity for those not covered. As a result, bills
were introduced in Congress as early as the 85th Congress prOposing
an independent conmdssion to make a comprehensive study of all aspects
of the land acquisition and relocation problems. One bill to establish
such a commission was introduced in the 83th and 87th Congresses by
Senator John bpsrkmen, then Chairman of the Housing Subcomittee of
the Senate Banking and Currency Committee. The Bureau of the Budget
supported the objective of the commission but suggested that the
study be cOnducted within the legislative branch. This proposal was
adopted when the House Commuttee on Public Works established the
Select Subcommittee on Real Property Acquisition in 1961. After three
years of intensive study, the Subcoumdttee in December 1964 filed its
Port. &dl MMAMMJssiasspee .fEL !.___.."' IicsdPX
221.13%. *LLC Li L- Fesy.1..-nsl.mgn.l.lue_._._sisted Roam
Its recommendations were introduced in the 89th Congress as S. 1201
by Senator Sparkman and in the House as H. R. 342l (Johnson of
California), K. n. 6559 (Binghamo, and n. R. 6580 (St. Germain).
Because of its provisions on relocation, S. 1201 was linked
with S. 1581 and referred to this Subcommittee on Intergovernmental
Relations, which held hearings on both bills in early sonnet, 1965.
At the suggestion of the Bureau of the Budget. nearly every Federal
agency which testified or submitted a statement requested more time
to study the land acquisition provisions of S. 1201, so that
attention was focused on the relocation previalons. S. 1581
eventually passed the Senate and included three land acquisition
provisions paralleling subsections 402(1), 402(2), and 402(3) of
the Housing Act of 1965, which also conformed to three provisions
of Title I of J. 1201. Following Senate action on S. 1681, the
Subconmdttee on Intergovernmental Relations received detailed reports
from the Bureau of the Budget and other agencies on the land
acquisition provisions of S. 1201.
Title IX of S. 698 incorporates the three land acquisition
graposals that formerly appgared as Section 10 of S. 1681. plus other
land acguisltlon provisions adapted from Sections 101-106 and 112
of §. 1201. In effect| this gitlg rgppesents the first attegpt L:
the Federal Government to establish a uniform policy on land acguisition
pracglcea covering both Federal and federally assisted developmeng
I rams .
section 901 establishes uniform standards to guide the land
acquisition practices of Federal agencies. It requires that:
every land acquisition agency make every reasonable
effort to acquire preperty by negotiation rather
than condemation;
- 4 -
Title I: Title I of the preposed legislation contains
definitions of terms that are used frequently throughout the other
titles and appears to be inadequate in all major respects, but one.
The definition of "grant" or "grant-in-aid" in Section 103 was carefully
drawn with particular reference to the needs of Title II, "Improved
Administration of Grants-in-Aid to the States, and Title V, "Congres-
sional Review of Federal Grants-in-Aid to States and to Local Units
of Government" and specifically excludes certain types of Federal
assistance, such as loans and loan guarantees that are relevant to
the broader scope of Federal assistance involved in those titles that
have been added to the original legislation: Title VI, "Consolidation
of Grants-in-Aid Programs," Title VIII, "Uniform Relocation Assistance,"
and Title IX, 'Uniform Land Acquisition Policy." To fill this
definition gap, we suggest revising Section 107 to include a definition
of the terms "Federal assistance," "Federal financial assistance,"
"Federal assistance pregrams," and "federally assisted programs,"
while at the same time preserving the present Section 107's intent
with respect to District of Colubmia financial payments. The following
language would implement this suggestion:
FEDEJAL ASSISTANCE, FEDERAL FINANCIAL ASSISTANCE,
FEDERAL ASSISTANCE PROGRAMS, OR
FEDERALLY ASSISTED Pamm
SEC. 107. The term "Federal assistance," "Federal
financial assistance," "Federal assistance programs,"
or "federally assisted programs," means programs that
provide assistance through grant or contractual arrange-
ments, and includes technical assistance programs or
programs providing assistance in the form of loans,
loan guarantees or insurance. The term does not include
any annual payment by the United States to the District
of Columbia authorized by Article VI of the District of
Columbia Revenue Act of 1947 (D. C. Code, secs. 4?-
2501a and 47-2501b).
_ 4; "
appraisals be made before initiation of negotiations;
the Federal agency establish a fair and reasonable
purchase price before the start of negotiations and
make a prompt offer to acquire at that price;
no owner be required to surrender possession of his
property before the Federal agency pays the agreed
purchase price or deposits with the court an amount
not less than the appraised fair value or the amount
of the condemnation award;
no occupant be required to move without at least 90
days' written notice;
the Federal agency permit a prOperty owner to remove
an improvement if it is not required by the agency;
tenants of property acquired by the government not
be charged rent above a fair rental value;
Federal agencies not advance the time of condemnation
or defer the condemnation or deposit of funds in order
to pressure the owner to agree on a price for his
property;
if property is to be acquired by eminent donnin,
the Federal agency institute formal condemnation
proceedings;
if the acquisition of only part of a property vauld
leave the owner with an uneconomic remnant, the Federal
agency acquire the entire property; and
the Federal agency take into account human considera-
tions in setting the boundaries of a proposed public
improvement.
In brief, this section makes it clear that the Congress desires that
public agency policies and procedures for the acquisition of real
property should be fair and consistent, and should be directed to
giving the preperty owner the full measure of compensation authorized
by law promptly, uith a minimum of inconvenience, and without forcing
him to prolong negotiations or to costly litigation. Many Federal
agencies adhere to some or most of these procedures and their reports
on S. 1201 (89th Congress) indicated they could abide by all of the above.
Section 902 directs that "fair market value" be paid as
compensation for purchase or condemnation. Section 903 requires
that a Federal agency which takes land or an interest in land must
take a similar interest in any improvement that is part of the real
preperty. It also provides a uniform standard for determining
whether a structure or other improvement is a part of the real
property. Section 903 further provides for equal treatment of property
owners and tenants with respect to buildings and structures on land
taken.
Section 304 authorizes Federal agencies to reimburse property
owners for reasonable and necessary expenses incidental to trans-
ferring title to real property to the United States. This recognizes
the inequity in taking private prOperty for public use and requiring
the owner, who may be unwilling to sell, to incur expense in order to
transfer title.
Section 905 applies to federally assisted programs key elements
of the prOperty acquisition policies and procedures for direct Federal
programs set forth in Sections 901 through 904. Specifically, it
states that state or local agencies may not receive Federal aid for
acquisition of real property unless they agree to: acquire by
negotiated purchase rather than condemnation when reasonably feasible;
give ninety days' advance written notice to vacate; and establish a
price before beginning negotiation and make a prompt offer to acquire
the preperty at that full price. Further, beginning in 1970 such
agreements must also include provision that the State agency: will
pay the agreed purchase price, make available to the owner 75 percent
- 42 n
of the appraised fair value of the property, or deposit or pay the
final amount of the condemnatiOn award; will disregard any decreases
in market value caused by preliminary administrative actions or public
announcements of a proposed public improvement; and will assure equal
treatment of property owners and tenants in regard to improvements
owned by the tenant. The latter effective date of this provision
is in recognition of the fact that some State and local government
agencies cannot legally or practicably comply without first obtaining
appropriate authorizing legislation.
The requirements under SectiOn 905 for preferring negotiation
to condemnation, for ninety days' notice, and for prompt payment of
the negotiated appraised or condemnation price, already apply to
certain acquisitions financed by the Department of Housing and Urban
DeveIOpment pursuant to 1965 legislation, as noted earlier.
To grasp the significance of achieving a more uniform and fair
property acquisition policy, one need only examine the anticipated
annual scale of future property acquisitions under direct Federal and
federally assisted programs, as estimated by the House Select Sub-
committee on Real PrOperty Acquisition in its 1964 report:
Magnitude of Future Property Acquisitions, Annual Basis
(estimate)
Compensation
ggggagg zayggntg Ownerships
Direct Federal 1,204,700 $ 214,600,000 30,660
Federally assisted EZQLLQQ 1,403,900,000 _jL,360
Total 1,727,800 $1,618,300,000 133,000
The Advisory Commission on Intergovernmental Relations believes
these figures argue eloquently for a serious effort by the Federal
Government to bring order and eqaity to its property acquisition
policies, and that Title IX. largely based on the exhaustiVe study
of the House .elect Subco-ittee on Real Property Acquisition, is just
such an effort. Hot to be overlooked is the fact this title's pro-
visions are essentially in accord with the reports of the Bureau of
the Budget, Department of Defense, Department of Interior, and the
General services AdministratiOn on s. 1201 (89th Congress).
Agsngmpptng; 758 to §. § : Our testimon shifts at this
point from L. 693 as introduced. to the proposed Amendment No. 748
just introduced by ion. Mr. ChairmanI which deals with AccountingI
AuditingI and Reporting of Grant-in-Aid Funds." This proposed new
title would cargz out a specific recommendation adopted 22 the
Adviser: Commission in its reporgiggal Balagsmthe America
magiStaten: and we stronglz urge its enactmn .
Federal agencies administering assistance programs are charged
by Congress and by regulations of the Comptroller General with assuring
the preper and legal use of grant funds distributed to States and local
governments. Furthermore, the General Accounting Office as part of
its "spot audit to ascertain the effectiveness of agency audits of
Federal expenditures, also audits grant-in-aid expenditures at the
State and local levels.
- (VII
Adequate fiscal and program controls are an essential part
of any assistance program. The government providing the assistance
must be able to assure itself that funds are being legally spent for
the purposes intended. Auditing procedures and financial reporting
requirements are essential for this pu:pose. However, while meeting
the necessities of adequate reporting and review. every effort should
be made to avoid placing undue and time-consuming burdens on State
and local program administrators. Surveys indicate that this latter
goal is frequently not achieved.
A recent stud b the a e '
grant-in-aid geguiremegts which igpede Jtate edginistragion shgxgg
considerable di sa a th
auditing and reporting procedures reguired by Federal grant programs.
The variation between Federal and State r
uirenents and aao Federal
reguirements regarding freguenczI classification systemsI and methods
of accounting were cited as creating particular problems1 The
excessively detailed reggrta on subproqrams were mentiggeg_gz_gns
State official who indicated that 54 individual fiscal reports mug;
be prepared and filed regardigg_e§£endi£ures of funds under the
Vocational Education Act at both State and local levels taki weeks
0 ts t me. Another official complained that the breakdowns
requested are almost endless.
In the earlier survey of The Federal System as Seen by state
and Local Officials, your SuchMudttec, Mr. Chairman. found that half
of the respondents indicated that variations among the Federal agencies
-4:
reporting and accounting requirements and differences between Federal
and State requirements had caused difficulties in administering grants-
in-aid. As one governor stated it:
many Federal agencies ignore the Jtates' basic
accounting system and the controls therein. making
it necessary for State operating agencies to keep
double sets of books for Federal audit purposes.
Some Federal agencies go to the extent of almost
complete voucher-by-voucber audit and at times demand
that accounting be done by a "Federal" standard which
in essence is not Federal as such but peculiar to
the needs of the specific agency concerned. Overall,
an overwhelming number of the State and local
officials indicated that legislation was needed to
achieve more uniform accounting and auditing pro-
cedures among Federal grant programs.
On the other hand in the subsequent Subcosmdttee report entitled
Ihe Federal System as Seen 9: Federal Aid Officials, it was reported
that a majority of Federal program administrators responding felt that
the variations in auditing requirements cause no difficulties in the
State and local administration of their respective programs. n size-
able majority reiected the proposal that the post-audit of aid programs
might be dispensed with where a States post-audit system met standards
the Comptroller General set down. In addition a comparable preportion
disputed the need for more uniform auditing and accounting procedures
for all grant-in-aid programs.
Althgggh the difference in F d a e an objectivesI
magnitudeI and administrative arrangegg a ardl a te
to zield cogpletelx to uniform reporting and accounting {gguiremegt§.
there remains the gueation of whether existing reguirements are
reasonable in their demands. Most State and 125a} ogficials feel
the! are not and at least some Federal aid administrators agree.
- 4; -
In it; recent report on Fiscal :alance in_£h5_5merican Federal
Sgstem the Adviser! Commission adept5g_g_£hrgs:pgon§ed recommendation
urging enactment of general legislation by the Congress applicable to
grants-in-aid to the States wherebz: 12 the Comptroller General
Eggld studx and review the accounting and auditing sxstems of State
governments receiving Federal grants-in-aid and ascertain their
general adeguacz and integritz; (2) for those States meeting certified
standardsI the results of State audits of the expenditure of Federal
grant funds would be accepted b2 Federal administrators in lieu of
their own fiscal audits as long as the State accounting and auditing
szstem continued to meet the prescribed standards; and 3 this
authorization would be extended at the discretion_g£ the Comptroller
General to units of local government receiving aiseable grants directlz
from Federal agencies.
The preposed new title includes provisions designed to facilitate
the simplification and standardization of financial auditing and
reporting requirements in Federal grant-in-aid programs. Its second
section provides the President with sufficient authority to achieve
greater consistency. simplicity and order in an area of grants-in-aid
financial reporting-~5n area only beginning to be recognized as a
seriOus intergovernmental fiscal management problem. It authorizes
the President to promuhaterules and regulations simplifying financial
reporting requirements of Federal grants-in-aid and. to the extent
feasible. making them more uniform.
- 47 -
The new title's third section provides the basis for constructive
efforts to avoid unnecessary duplication and time-consuming fiscal
management procedures at the Federal level and establishes a basis
for accepting state and local accounting and auditing systems that
meet acceptable standards. The Comptroller General, the Secretary
of the Treasury, and the Director of the Zureau of the Budget are
directed to conduct a joint study of the principles, standards, and
related requirements of executive agencies governing the accounting
and auditing of Federal grants-in-aid. They are to identify ways
and means of developing government-wide accounting and auditing
procedures to foster greater cooperation and coordination among the
financial management officials of all levels of government. This
assignment, in effect, is already theirs under the Budget and
Accounting dct of 1950 and we understand a Task Force is being
established to look into these issues.
The Conptroller General under this third section is directed
to study and review the accounting and auditing systems of the States
and their political subdivisions in order to determine their adequacy
and effectiveness in light of the principles and standards prescribed
by him. after consulting with the .ecretary of Treasury and the
Director of the Budget and considering statutory requirements and the
needs of administering Federal agencies, the Cemptroller General is
authorized to prescribe rules and regulations permitting such agencies
to substitute the accOunting and auditing systems of State and local
governments when they meet prescribed standards.
- 43 .
This proposed new title seeks to develOp new intergovernmental
arrangements in the accounting and auditing field which would lead to
a significant saving in time and energy and provide the basis for
significant iggrovements in interrovernmental fiscal management--
without in any waz shortcuttina the exe:cise of fiscal Erudence and
accountabilitz at all levels of government.
8. 2981: We turn now to the final major togic that is covered
in your hearingsI Mr. Chairman.
It is cur understanding that S. 2981I 'The Joint Funding
Simplification Act of 1968," has been referred to your Subcommittee
and that this measure is to be considered in these hearings. The
Advisory Commission, in its Fiscal Balance report, recommended enactment
bx the Congress_2 this Administration bill as an imgq;£gg§_mg§n§_2£
modernizing the management of Federal assistance grogramg.
States and localities more and more are adopting g 'bulti-
-_ .___. ._..__.--_-
functional; "Eackaging' aggroagh.50anet_xg§xiqa_lgsil.nn§_2hlli£il
develpgmental needs. Yet gregenglx. a State 9; loc11_3ggetnmentuin
gutting together an iggegrated groxrgg must agglx segaratelzI for
gxamglg. to; the educgtiqggl_gggpgnegt. welfare comegnen£g_Jgg
WWW
segarate agglications moving along in tandem frequentlz nearlz becomes
an exercise in administrative futilitz. The applicant State or local
cmnmudty may find part of its components approved and others suspended
in a morass of administrative and fiscal uncertainty, because of
-.¢9 -
competition within certain funding sectors. This bill seeks to
remove or shuplify administrative or technical reguirements to permit
a more flexible "package" approach to considerationB processingI
approval, and administration of Federal Assistance programs.
8. 2981 would accomplish this by (l) authorizing waiver or
modification of certain statutory procedural requirements; (2) per-
mitting agency heads to delegate the approval and administration of
Federal assistance programs to other agencies; (3) providing for a
spacial fund in each agency to finance joint projects; (a) describing
Hays Federal agency heads can foster joint projects; and (S) authorizing
the President to establish implementing standards and procedures. The
proposal would not change, with certain exceptions, substantive pro-
visions of law governing assistance programs, such as eligibility
criteria, matching ratios, and apportionment formulas.
The AdviaoEZ Commission believes this Joint funding approach
is workable assuming it is reinforced with strong direction at the
highest administrative levels in the Executive Branch and at the same
time receives the dedication to cooperate from functional program
administrators. We are convinced that initial implementgu efforts~~
assuming the bill's enactment--should focus on the intradepartmental
phase of this "packaging problem," since the management hurdles in
this area are far less difficult than those involving interdepartmental
collaboration.
L1
Appropriate revisions would be needed in Title VI to make
this broader definition apply to consolidations authorized under
this title, rather than the more narrow definition of grants-in-
aid which appears in Section 106.
litle XI: 135;; 11 see§g_£p~_pgrdiga§e and make _,g§_
{legiblg_gegt§ip standards and groggdgngs_gpgernigg financial,
grganizatipggl_gnd other activities o§~§tate exggggigas_pgg_other
539m.m9.i§1§4..19§9L8._3 the.§s..8s.t_iy.i_tis___a§£__s_._r_is are ec ed '0 exists;
812n£_21231ang. The specific language of this title reflects the
considerable attention given to it and amendatory action taken in
1966 by the House Subcommittee on Executive and Legislative
Reorganization with respect to predecessor prOvisions.
The present title effects a number of basic changes in the
administration of grants-in-aid to the States. Section 29l_provides
Manors .oritatmsislsmes wpthesussLJecinfsmd
Wainwrtmnmames. .of. WMJNMM. .oi
grants beipg_received. This procedural innovation would assist
governors in preparing a more adequate budget and enable him to
maintain more effective coordination over his executive departments
and agencies. In a similar fashion, State legislatures would be
assisted in their administrative oversight and fiscal functions.
Coordination of grant-in;ai§_ggonr is as_critical a_probleg
11.. .._.-.
at he State )ev9l_§s it is at the_Fedcra}J and_gggernors have a
2510; responsibilitx_innthis aren-
Ye}_pxu§t_£e chief eyecutives
- c
are not inp ggsition to assume this role. Not all States, for
- s..-
- 50 -
To conclude, hr. Chairman, the Advisory Commission strongly
supports passage 0: S. 698, the Eropossd_:intergovernmental Cooperation
act" including Amendment No. 748 and the enactment of S. 2981.
We endorse these measures, because we accept the intrinsic worth
of the existing grant-in-aid system. But we know that it is in desperate
need of modernisation. The underlying thrust of all the legislation
before you is geared to achieving much of this needed reform.
Improved intergovernmental management is as critical a factor today
in improving Federal-State-local relations as any other. Yet, better
intergovernmental administration is as difficult a subject to dramatize
and to achieve action on--as any we know. Prompt, decisive and
meaningful action must be taken, however, if American federalism is
to survive the many public service burdens now thrust upon it.
These bills constitute a viableltgigorouaL first response to
many of the managsmen£_ggddlgs_thgt_plegue contemporary intergovernmental
relations. N5_support them We urge their early_anactmant. And we
0
offer the serviggs of ou£_gtef§ to agais£_§he SubcommiggggigL_pat-
WWW.
example, require agencies to obtain the approval of the governor before
entering into negotiations with Federal departments for grant programs.
A 1965 survey indicated that in 18 States gubernatorial approval is
required, while in 18 other States it was not. The situation varied
in ten States, it was found, where approval was required in some
instances but not in others. In the four remaining States, some
other form of approval was stipulated.
As of_the beginning of this yearI 46 States had established
*-
Some form of liaison unit to coordinate Fedeggl_aid programs, but
.._..-a- l~~n ~4-
£h£§§_!2l£2_?§;y~g;gatlg in structure angiggggg, In Delaware, Georgia,
and North Carolina, State planning agencies have been assigned this
responsibility. In New York and Rhode Island, an interdepartmental
committee has been established on a continuing basis to make studies
and recommendations to the governor and legislature. In other States,
including Connecticut, Illinois, Louisiana, Vermont, and Maine, the
governors have designated an official in his office or in the Depart-
ment of Administration to coordinate grant-in-aid activities. To
complement these efforts. at least 13 States have established a
Washington office.
ClearlyL prog£e§g_has been made in overcoming the problem of
__.. ._._..___.- -._-
gggncx bx-passing9£_£he governor and much of this can be attributed
- .. _e
to the iggacthpf the conferences on Federal-State relations 29nducted
-o-- --- --- --.-_ vu-v-
b1 the 0£§i5e_og_§ngggencx Planning in more than 40 States thrggghodt
---- o-__ ~
l9§2 and tguthe initiative of theugshington_9ffice of the National
o..."
Governors[_§9n£e5ence. NonethelessI th£_prgvigions of Section 29;
-7-
would formalise certain procgdures_ghich are now informal and~gst§bliah
-- ~ w..__ .._-__
as rights whatwnqugge privileges unknown_§q_g§nx State officials,
Section_292 of the measure restqmonthe aaagggtionmthat_§he§9
e-hou.u-._
_s§g_22_g_2§pggr accounting of Peder§l_grant_§unds without theuuse_9£,
separate ban;.agcounts. A few of the older Brant statutes and some
- I-- hw-
grant regulations_ggipulate that Federal monies must be kept_in_
separate banh.ac§9unta b: State governments. Some States as a con-
sequence maintain intricate systems of bank accounts for various
Federal aid programs. Hith the development of modern accounting
techniques, it is only necessary that the State maintain approPriate
fund accounts which distinguish the balance that the State has
received but not yet earned. This section of S. 698 provides for
the application of these principles to grants to States, while
preserving the Federal Government's legitimate concern in seeing
that all such grants are applied as intended and in receiving certain
elementary facts with respect to the financial status of grant
programs. :12 clarify the intent of this section, we recommend
insertion of thg_phrase "or administrativeregulationJ after the vord__
. .n- 0"-
LIN" 0.1.1109..15..pese_410 0f £311.1-
_§9§i¢g 293 establishes a procedure designed to discourggg_
.-.._- p-o . ..c-
the advangenept_9f_rederal grant-infaid funds for longer time perigdg
than are necessar-XL As was noted inmtheprior heari a on S. 551,
the Department of the Treaaugz has alreadx sought administratively
to achieve this gpjgctiVe through it§_ggp!££mental Circular No. 1075.
---c..--
issued on May Z§L_l964. This circular was and is geared to estahlishing
. u-----_._.
-5-.. .-. r- .. :.
a letter-of-credit procedure which maintains funds in Treasugz_until_
needed hy_recipient Jurisdictions and thus reducing interest_£ost§:
-.__,---
Advances for three to six months formerly made in several programs
and still permitted in some have resulted in expenditures of money
from the Federal Treasury before they were actually needed--with no
concomitant advantage accruing to the Federal or State agencies
concerned or to effective program implementation.
Lump sum advances at specified intervals now constitute a
rather outmoded way of transmitting money iron one jurisdiction to
snother--given the emergence of telegraphic transfers. sight drafts,
06 n latter'oi-credit procedure. The Treasury circular recognizes
this fact and pursuant to its procedures advances are limited to the
minimum allowances that are necessary and are timed to coincide with
the actual cost requirements of the recipient jurisdiction in carrying
out the purposes of a grant pregram. This letter-of-credit device in
and by itself does not insure against excessive withdrawals, as
Treasury has recently discovered in its monitoring of the system.
Yet it can and does provide a simple, uncomplicated way of getting
payments for readily ascertainsble short-term needs. It also precludes
the necessity of trying to anticipate the requirements of longer time
periods with the consequent tendency to overestimate.
42y? prgblgm§,_hg!ever, seem to have arisen thus (15 in
.._._. _.-- _-_._
ministering this. IQEEFTMIQLFJIPCSBQQELJHJ. great-59358..
including among others Alabama, Arizona, California, Indiana, Kansas,
Ohio, Oklahoma, Tennessee, and Massachusetts, appear to have_lggal_
Ammonia. tt54medemlicesiop-eum_ems$s§_m shes}.
.
JELL Lt
.d.e_:
....
It.
one .
-n...
Second. certain of the Federal. agencies usinLthg
._.-. .._-.__...
s
a: have not been__ful_l_.1 aware of itgwbaiicgpoae animejgiled
to institute}? effectivemnitoring'sxgteg, A special 135315913911;
Force on letterfofjgrgdit ggsednrc gpgrhgdedbx 11-min}: ignori
r_evi_ewm these sad other related problem; _vith a giew tovaggLogez:
coming gigggdejiciengiilh In short, the letter-of-credit procedure
per se is no better than those using it, but with effective
implementation it could become a vitally significant financial
procedure for eliminating a continuing tension point in intergovern-
mental fiscal relations.
39 91.921 -293 remimLmte- 0.; emwmg 994-2999.
to sin hglL the. full {one 9; law, It is geared to assuring that
States will not draw on grant funds in advance of their program needs.
At the same time. it does not seek to hold them accountable for
interest or other income earned on any grant funds advanced, prior
to their disbursement for program purposes. EffectiveI government;
_u_i_do iglqgelltgtign 9 his devi e_should_seve the Federal (3mm;
Section 204 _§t_i,.pu1ates that {federal departments and_a5en_cie§
--~- ._I ._..-
may waive legislative regggenents for i'fsiggleitate agengxl"
multigegggboerd,_org.npission.wln 1_3(15. we testified that "about
Wu up .
one-third of_the jederal grant-in-aid programs are governedjyjiggl
State ageuqylpgqyigipns" and "sluggtqi'gem-fourtha of total [fedsyg
grant funds_gre (Lisgtgggignggiyege_prgvi§igns.' A cursog
_.e_.e 3Esttqn.9E.ZCQSLYOLJM¢F¢d-S¥RQLQ'_£._t t1 twee}: .53.;
