demand when due, the principal of, or interest on, any debenture so guaranteed, the Secretary of the Treasury shall pay to the holder or holders the amount thereof which is hereby authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, and thereupon, to the extent of the amount so paid, the Secretary of the Treasury shall succeed to all the rights of the holder or holders of such debentures. Debentures issued under this subsection (b) shall be in such form and denominations in multiples of $50, shall be subject to such terms and conditions, and shall include such provision for redemption, if any, as may be prescribed by the Corporation with the approval of the Secretary of the Treasury, and may be in coupon or registered form, and shall not be subject to the limitations prescribed by subsection (a) of this section. Any difference between the amount of debentures to which the holder of the defaulted note or other obligation of the Corporation is entitled under this subsection (b) and the aggregate principal amount of the debentures issued, not to exceed $50, shall be adjusted by the payment of cash by the Corporation. The Corporation may, with the approval of the Secretary of the Treasury, purchase in the open market debentures issued under the provisions of this subsection (b). Such purchases shall be made at a price which will provide an investment yield of not less than the yield obtainable from other investments authorized by this Act. Debentures so purchased shall be canceled and not reissued.

RESERVES, DIVIDENDS, AND INVESTMENT OF FUNDS

SEC. 9. The Corporation shall carry to a specific reserve account for losses, to be known as the Insurance Fund, semi-annually from interest receipts on mortgage loans amounts equal to one-fourth of 1 per centum per annum of the then outstanding balance of such mortgage loans. The Corporation shall make such chargeoffs on account of depreciation or impairment of its assets as the Administrator shall require from time to time. In addition to the Insurance Fund reserve account for losses, the Administrator shall require the establishment and maintenance of, and the Corporation shall establish and maintain, such reserve or reserves as he deems necessary. No dividends shall be paid except out of net earnings remaining after all reserves and chargeoffs required under this Act have been provided for, and then only with the approval of the Administrator. Such reserves, including the Insurance Fund, and all other funds of the Corporation not invested in mortgage loans or operating facilities, shall be kept in cash or on deposit or invested in bonds or other obligations of, or guaranteed as to principal and interest by, the United States.

MAXIMUM FUNDS FOR ANY ONE STATE

SEC. 10. Not more than 10 per centum of the funds provided for in this Act, either in the form of advances or loans, shall be expended in any one State.

DEFINITIONS

SEC. 11. As used in this Act, the following terms shall have the meanings, respectively, ascribed to them below, and unless the context clearly indicates otherwise, shall include the plural as well as the singular number:

(a) "Families of moderate income" means families whose incomes preclude them from purchasing or renting conventionally financed new housing with total monthly housing expenditures of 20 per centum of their normal stable income as defined by the Federal Housing Administration.

(a) "Families of moderate income" means families, or individuals, whose incomes preclude them from purchasing or renting conventionally financed new housing with total monthly housing expenditures of 20 per centum of their normal stable income as defined by the Federal Housing Administration.

(b) "Eligible borrower" or "borrower" shall mean (1) families of moderate income, (2) any private or public nonprofit organization (including cooperative ownership housing corporations), or (3) any private corporation, borrowing directly on a commitment from the National Mortgage Corporation and authorized to provide dwellings (i) the occupancy of which is to be permitted in consideration of agreed charges, or (ii) for sale to an organization of the character described in clause (2) of this paragraph.

(c) The term "corporation" (except when used to designate the Corporation created by section 3 hereof) shall mean either "corporation" or "trust" and

references to members of such corporations shall with respect to trusts mean the beneficiaries thereof.

(d) "Housing project" shall mean a project (including all property, real and personal, contracts, rights, and choses in action acquired, owned, or held by a borrower in connection therewith) of a borrower designed and used primarily for the purpose of providing dwellings: Provided, That nothing in this Act shall be construed as prohibiting the inclusion in a housing project of such stores, offices, or other commercial facilities, recreational or community facilities, or other nondwelling facilities as are necessary appurtenances to such housing project.

(e) "Development cost" shall mean (1) the amount of the reasonable costs incurred by the borrower in, and necessary for, carrying out all works and undertakings for the development of a housing project and shall include the cost of all necessary surveys, plans and specifications, architectural, engineering, or other special services, land acquisition, site preparation, construction and equipment, interest incurred during the development of the housing project up to the time of completion, initial working capital for the administration of the housing project, necessary expenses (including any initial operating deficit) in connection with the initial occupancy of the housing project, and the cost of such other items as the Administrator or Corporation shall determine to be necessary for the development of the housing project, or (2) the cost, as approved by the Administrator or the Corporation, incurred by the borrower in, and necessary for the acquisition of, a housing project developed with a loan made under this Act.

(f) "Mortgage" or "mortgage loan" shall mean a first mortgage on real estate, in fee simple, or on a leasehold (1) under a lease for not less than ninety-nine years which is renewable or (2) under a lease having a period of not less than seventy-five years to run from the date the mortgage was executed; and the term "first mortgage" shall mean such classes of first liens as are commonly given to secure advances on, or the unpaid purchase price of, real estate, under the laws of the State in which the real estate is located, together with the credit instruments, if any, secured thereby.

(g) The term "veteran" shall mean a person who has served in the active military or naval service of the United States at any time (i) on or after September 16, 1940, and prior to July 26, 1947, (ii) on or after April 6, 1917, and prior to Novmeber 11, 1918, or (iii) on or after June 25, 1950, and prior to February 1, 1955, and who shall have been discharged or released therefrom under conditions other than dishonorable. The term "serviceman" shall mean a person in the active military or naval service of the United States who has served therein at any time (i) on or after September 16, 1940, and prior to July 26, 1947, (ii) on or after April 6, 1917, and prior to November 11, 1918, or (iii) on or after June 25, 1950, and prior to February 1, 1955.

(h) The term "going Federal rate" shall mean the annual rate of interest (or, if there shall be two or more such rates of interest, the highest thereof) specified in the most recently issued bonds of the Federal Government having a maturity of ten years or more.

(i) "State" shall mean the several States, the District of Columbia, and the Territories, dependencies, and possessions of the United States.

(j) The term "elderly persons" means a person sixty years of age or over or a family the head of which or his spouse is sixty years of age or over.

AMENDMENTS OF OTHER ACTS

SEC. 12. (a) The sixth sentence of paragraph Seventh of section 5136 of the Revised Statutes, as amended (12 U. S. C. 24), is amended by inserting before the comma after the words "or obligations of the Federal National Mortgage Association" the following: ", or notes, debentures, or other obligations of the National Mortgage Corporation".

Section 5200 of the Revised Statutes, as amended (12 U. S. C. 84), is amended by adding at the end thereof the following:

"(12) Notes, obligations, and debentures of the National Mortgage Corporation shall not be subject to any limitation based upon such capital and surplus."

(b) Section 201 of the Government Corporation Control Act (31 U. S. C. 856) is hereby amended by striking out the words "and (4) Federal Deposit Insurance Corporation" and inserting in lieu thereof "(4) Federal Deposit Insurance Corporation, and (5) National Mortgage Corporation".

TAXES

SEC. 13. All real property and tangible personal property of the Corporation shall be subject to State, county, municipal, or local taxation to the same extent according to its value as other similar property is taxed, and any real property shall be subject to special assessments for local improvements. Except as to such taxation of real property and tangible personal property, the Corporation, including but not limited to its franchise, capital, reserves, surplus, income, assets, and other property, shall be exempt from all taxation now or hereafter imposed by the United States or by any State, county, municipality, or local taxing authority. All notes, debentures, and other obligations of the Corporation shall be exempt, both as to principal and interest, from all taxes (except surtaxes, estate, inheritance, and gift taxes) by any State, county, municipality, or local taxing authority.

PROTECTION OF LABOR STANDARDS

SEC. 14. In order to protect labor standards

(a) any contract for a loan pursuant to this Act shall contain a provision requiring: (1) that not less than the salaries prevailing in the locality, as determined or adopted (subsequent to a determination under applicable State or local law) by the Administrator, shall be paid to all architects, technical engineers, draftsmen, and technicians employed in the development, and to all maintenance laborers and mechanics employed in the administration, of the housing project involved; (2) that not less than the wages prevailing in the locality, as predetermined by the Secretary of Labor pursuant to the Davis-Bacon Act (49 Stat. 1011), shall be paid to all laborers and mechanics employed in the development of the housing project involved: and (3) that certifications as to compliance with the provisions of this subsection be made prior to the making of any payment under such contract; (b) the provisions of title 18, United States Code, section 874, and of section 2 of the Act of June 13, 1934, as amended (40 U. S. C. 276c), shall apply to any housing project financed in whole or in part with funds made available pursuant to this Act;

(c) any contractor engaged on any housing project financed in whole or in part with funds made available pursuant to this Act shall report monthly to the Secretary of Labor, and shall cause all subcontractors to report in like manner, within five days after the close of each month and on forms to be furnished by the United States Department of Labor, as to the number of persons on their respective payrolls on the particular housing project, the aggregate amount of such payrolls, the total man-hours worked, and itemized expenditures for materials. Any such contractor shall furnish to the Department of Labor the names and address of all subcontractors on the work at the earliest date practicable.

PENALTIES

SEC. 15. (a) Any person who induces or influences a borrower hereunder to purchase or acquire property or to enter into any contract, in connection with any housing project to be financed, in whole or in part, with a loan made under this Act, and willfully fails to disclose any interest, legal or equitable, which he has in such property or such contract, or any special benefit which he expects to receive as a result of such contract, shall be fined not more than $5,000, or imprisoned for not more than one year, or both.

(b) No individual, association, partnership, or corporation (except the Corporation established under this Act) shall hereafter use the words “national mortgage corporation", or any combination of words which might reasonably lead to confuse with the National Mortgage Corporation as the name or a part thereof under which he or it shall do business. Any such use shall constitute a misdemeanor and shall be punishable by a fine not exceeding $1,000.

(c) Whoever, for the purpose of obtaining any loan under this Act, or any extension or renewal thereof or the acceptance, release, or substitution of security therefor, or for the purpose of influencing in any way the action of the Corporation under this Act, makes any statement, knowing it to be false, shall be punished by a fine of not more than $5,000, or by imprisonment for not more than one year, or both.

(d) Whoever (1) falsely makes, forges, or counterfeits any obligation, in imitation of or purporting to be an obligation issued by the Corporation, or (2) passes, utters, or publishes, or attempts to pass, utter, or publish, any false,

forged, or counterfeited obligations purporting to have been issued by the Corporation, knowing the same to be false, forged, or counterfeited, or (3) falsely alters any obligation issued or purporting to have been issued by the Corporation, or (4) passes, utters, or publishes, or attempts to pass, utter, or publish, as true, any falsely altered or spurious obligation issued or purporting to have been issued by the Corporation, knowing the same to be falsely altered or spurious, shall be punished by a fine of not more than $10,000, or by imprisonment for not more than five years, or both.

(e) Whoever, being connected in any capacity with the Corporation, (1) embezzles, abstracts, purloins, or willfully misapplies any moneys, funds, securities, or other things of value, whether belonging to it or pledged, or otherwise entrusted to it, or (2) with intent to defraud the Corporation or any other body, politic or corporate; or any individual, or to deceive any officer, auditor, or examiner of the Corporation, makes a false entry in any book, report, or statement of or to the Corporation, or without being duly authorized draws any order or issues, puts forth, or assigns any note, debenture, bond, or other such obligation, or draft, bill of exchange, mortgage, judgment, or decree thereof, shall be punished by a fine of not more than $10,000, or by imprisonment for not more than five years, or both.

(f) All general criminal and penal statutes of the United States relating to public moneys, property, or employees of the United States shall apply to public moneys, property, and employees of the Corporation. No officer or employee of the Corporation shall participate in any matter affecting his personal interests or the interests of any corporation, partnership, or association in which he is directly or indirectly interested.

[S. 1711, 85th Cong., 1st sess.]

A BILL To provide for the establishment of a Commission on National Housing Policy Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

DECLARATION OF POLICY AND PURPOSE

SECTION 1. The Congress finds that the general welfare and security of the Nation and the health and living standards of the people require a dynamic housing industry and an increasing availability of residential housing and related community development. The Congress further finds that the periodic discounting of Government-supported mortgages demonstrates the lack of an orderly mortgage market and tends to negate public policy, and that it may be desirable to develop new sources of investment funds to meet the housing needs of the Nation. It is the purpose of this section to authorize an intensive study to be made of ways and means of encouraging a flow of investment capital to provide financing, through an orderly and adequate market, sufficient to support a level of residential construction compatible with the housing demands and needs of the population and the capacities of a balanced, high-level economy.

ESTABLISHMENT OF THE COMMISSION ON NATIONAL HOUSING POLICY

SEC. 2. (a) There is hereby established a commission to be known as the Commission on National Housing Policy (hereinafter referred to as the "Commission").

(b) The Commission shall be composed of eleven members as follows:

(1) The Administrator of the Housing and Home Finance Agency, the Administrator of Veterans' Affairs, the Chairman of the Board of Governors of the Federal Reserve System, the Chairman of the Federal Home Loan Bank Board, and the Secretary of the Treasury, all ex officio; and

(2) Six persons to be appointed by the President from private life, such persons to be selected on the basis of their qualifications and experience in the field of housing or mortgage finance.

(e) The Chairman and the Vice Chairman of the Commission shall be selected by the Commission from among its members at its first meeting.

(d) Any vacancy in the Commission shall not affect its powers, but shall be filled in the same manner in which the original appointment was made. (e) Six members of the Commission shall constitute a quorum.

COMPENSATION AND STAFF

SEC. 3. (a) The members of the Commission who are serving ex officio shall serve without compensation in addition to that received for their other services in the Government, but they shall be reimbursed for travel, subsistence, and other necessary expenses incurred by them in the performance of the duties vested in the Commission. The members of the Commission from private life may be paid transportation expenses and not to exceed $50 per diem in lieu of subsistence as authorized by section 5 of the Act of August 2, 1946, as amended (5 U. S. C. 73b-2).

(b) The Commission may—

(1) appoint and fix the compensation of such personnel as it deems advisable without regard to the civil service laws and the Classification Act of 1949, as amended;

(2) make such expenditures (including expenditures for travel and not to exceed $15 per diem in lieu of subsistence for witnesses appearing at the request of the Commission) for personal services, printing and binding, rent in the District of Columbia, and for such other matters as are necessary for the efficient execution of its functions under this section; and

(3) procure, without regard to the civil service laws and the Classification Act of 1949, as amended, temporary and intermittent services to the same extent as authorized by section 15 of the Act of August 2, 1946 (60 Stat. 810; 5 U. S. C. 55a), but at rates not to exceed $50 per diem for individuals, (c) Service of an individual as a member of the Commission or employment of an individual by the Commission as an attorney or expert in any business or professional field, on a part-time or full-time basis, shall not be considered as service or employment bringing such individual within the provisions of section 281, 283, 284, 434, or 1914 of title 18 of the United States Code, or section 190 of the Revised Statutes (5 U. S. C. 99).

(d) There are hereby authorized to be appropriated such sums as may be necessary to carry out the provisions of this section.

DUTIES OF THE COMMISSION

SEC. 4. The Commission is authorized and directed to conduct an inquiry with respect to the current and prospective residential housing needs of the country and the capacity of the economy in general and of the building industry and mortgage market in particular to meet these needs. The Commission shall formulate recommendations which shall include but not be limited to the following subjects:

(1) The short-term and long-term housing needs of the Nation; (2) The discounting of Government-supported mortgages;

(3) Long-term prospects for developing new sources of investment funds to meet the housing needs of the Nation, including but not limited to private and semiprivate pension funds and trusts;

(4) The extent to which the resources of the Federal National Mortgage Association can be utilized to stabilize the mortgage market; and

(5) Ways and means of increasing the supply of adequate housing for families of moderate income.

OBTAINING INFORMATION

SEC. 5. (a) The Commission may, in connection with its inquiries and studies under this Act, hold such hearings and hear such witnesses as it may deem appropriate,

(b) All departments and agencies of the Government are authorized and directed to cooperate with the Commisison in its work and to furnish the Commission such information and assistance as it may require in the performance of its functions and responsibilities.

REPORTS

SEC. 6. The Commission may submit interim reports of its studies under section 4 to the Congress and the President at such time or times as it deems advisable, and shall submit its final report with respect to such studies to the Congress 'and' the President not later than June 30, 1958. The final report of the Commission