22 1 shall be subject to taxation to the same extent, according to 2 3 4 5 its value, as other residential or other real property. RECEIPTS AND DISBURSEMENTS OF CORPORATION EXCLUDED FROM THE BUDGET SEC. 10. The receipts and disbursements of the Corpo6 ration in the discharge of its duties shall not be included in 7 the totals of the budget of the United States Government and 8 shall be exempt from any annual expenditure and net lend9 ing (budget outlays) limitations imposed on the budget of 10 the United States Government. In accordance with the pro11 visions of the Government Corporation Control Act, the 12 President shall transmit annually to the Congress a budget 13 for program activities and for administrative expenses of the 14 Corporation, which budget shall also include the estimated 15 annual net borrowing by the Corporation from the United 16 States Treasury. The President shall report annually to the 17 Congress the amount of net lending of the Corporation, in18 cluding any net lending created by the net borrowing from 19 the United States Treasury, which would be included in the 20 total budget of the United States Government if the Cor21 poration's activities were not excluded from those totals as 22 222 23 24 a result of this section. RETIREMENT OF OBLIGATIONS SEC. 11. The Corporation shall retire and cancel its 25 bonds and stock when its purposes under this Act have been 23 1 accomplished. Upon the retirement of such stock, the reason2 able value thereof as determined by the Board shall be paid 3 into the Treasury of the United States and the receipts issued 4 therefor shall be canceled. The Board shall proceed to liq5 uidate the Corporation and shall pay any surplus or accu6 mulated funds into the Treasury of the United States. The 7 Corporation may declare and pay such dividends to the 8 United States as may be earned and as in the judgment of 9 the Board it is proper for the Corporation to pay. 11 SEC. 12. If any provision of this Act or any part there12 of, or the application of any such provision or part to any 13 person or circumstance, is held invalid, the remainder of 14 the Act or provision, or the application of such provision 15 or part to other persons or circumstances, shall not be 16 affected thereby. 17 18 ANNUAL REPORT SEC. 13. (a) The Corporation shall transmit to the Con19 gress not later than March 31 of each year a detailed report 20 on its operations and activities during the preceding calen 21 dar year. 22 2 (b) In its fourth annual report, the Corporation shall 23 include its recommendations with respect to whether the 24 demonstration authorized under this Act should be con25 tinued, expanded, or terminated. If the Corporation recom 24 1 mends a termination of the demonstration, it shall include 2 in such report a detailed plan for the transfer of the assets, 3 liabilities, and functions of the Corporation and for its 4 dissolution. OF THE GENERAL COUNSEL OF HOUSING AND URBAN DEVELOPMENT NOV 7.1975 Honorable William Proxmire United States Senate Washington, D. C. 20510 Dear Mr. Chairman: Subject: S. 1988, 94th Congress (Cranston, et al) This is in further response to your request for our views on S. 1988 would establish a Neighborhood Protection Corporation as an agency of the United States and authorize that Corporation, as a demonstration, to carry out certain functions in three metropolitan areas. The functions would include seizing and taking title to certain abandoned properties which are covered by federally insured or guaranteed mortgages or mortgages held by "federally related" financial institutions, improving, leasing, selling or otherwise disposing of such properties, and redeveloping communities or neighborhoods. The Corporation would be authorized to issue capital stock and debt obligations to the Secretary of the Treasury in amounts not to exceed $35 million and $350 million respectively, and its receipts and disbursements would be specifically excluded from the budget. This Department is sympathetic to efforts to devise new and more effective methods of preventing the abandonment of needed housing and for coping with community problems presented by abandonment. We are also particularly interested in proposals that might facilitate the handling and ultimate disposition of properties subject to defaulted FHA-insured mortgages. Nevertheless, we believe that the approach set forth in S. 1988 involves a number of major difficulties, as detailed below. First, the authorities contained in the bill would largely duplicate what can already be done by local governments with Federal assistance under title I of the Housing and Community Development Act of 1974 and would also duplicate property disposition functions of this Department and, to a lesser extent, the Veterans Administration. Title I funds can be used by local governments for property acquisition, rehabilitation and disposition purposes, as well as for supporting neighborhood services and improvements, and we see no need for establishing a Federal Corporation for these purposes. Moreover, we believe it would be wasteful and inefficient to create a Federal Corporation with property disposition functions which parallel but do not displace or supersede those which this Department would retain in affected areas with respect to properties not acquired by the Corporation. Second, the approach of the bill would inject a Federal agency into innumerable problems best left to local governments and local citizens. Under S. 1988, for example, a Federal Corporation would be empowered to carry on direct local development and redevelopment programs that may last for years and involve countless matters of strictly local and neighborhood concern. Such an extensive, continuing Federal role is not required to protect the financial interest which the Federal Government may have in some of the property involved. Nor is such a role consistent with efforts made in recent years to reduce Federal oversight and expand the responsibilities of local elected officials. Third, the bill would impose a major burden upon the Federal courts in the areas in which the Corporation would operate. The procedures authorized for seizure and forfeiture would require these courts to make findings on a variety of issues that could entail complex factual disputes and substantial evidentiary presentations on matters not normally within the purview of those courts, such as whether services have been reduced below an "adequate level", whether abandonment "tends to create a danger to the community", whether owners have knowingly permitted deterioration, and whether the liquidity of the mortgagee is in jeopardy. In many instances, these procedures, instead of expediting handling and ultimate disposition of property, could result in new delays and uncertainties that would complicate existing problems. 71-509 O-76-3 |