sense that the return is fully explanatory as to losses, this can be less of a problem. But to the smaller concerns that are not so sophisticated in maintaining good records, frequently this data must be built up with our effort, and to assess the amount of damage sustained can become a larger problem even with the smaller firm. I am describing this because it is a possible avenue of determination. A firm, for instance, could be located as much as three-quarters of a mile from a project, yet claim that it has sustained some economic injury because of the renewal project. If its records are good, if we can assess the loss accurately, I think we have a means of establishing the extent of damage it has sustained, and then either rule it out as being ineligible for assistance, or assist it according to the established measure of damage it has sustained. If on the other hand you are trying to set a line of demarcation by physical limits, whether it is 1 block, 6 blocks, or a mile away from the project, in the absence of the other factors that have been mentioned in our statement, such as the cutoff of access or something similar, we may be left with a problem. There may be cries of discrimination from these firms who fully believe that they have been affected, but, if we can establish no sound base for this, there can be no assistance. I do not know if I am completely answering your question, but these would be my views on the question as I see it, Mr. Chairman. Senator METCALF. The question was one that Mr. Davis has already suggested was not able to be answered by either a brief "Yes" or "No." The question required a long answer. I am grateful for your observations. I do not think that we expected a precise answer that someone who is two and a half blocks away is out of the area. After you have made such a determination that there is an injury to a business, do these businesses have trouble in arranging a loan under the present sections? Mr. HENDRICKS. By and large I would say that they do not have a problem. Senator METCALF. Their problem is one of demonstrating that they have been injured. Mr. HENDRICKS. This is true, because the moment that we can fairly come within reasonable limits of assessing the extent of their damage, they are fully eligible, assuming that they meet the other requirements. When I say meeting the other requirements, we must keep in mind that one of the strong underlying requirements of 7(b), or any portion of 7(b), is the ability to repay the loan. In short, these are not grants or awards that are being made. They are loans that are made on rather liberal terms with adequate maturities, but with an expectancy that the repayment ability will assure the return of the money in full to the Government. Mr. DAVIS. Mr. Chairman, these two programs that we are discussing are not completely analogous. There is this distinction. You have a drought and the farmers cannot pay their bills, and your small business consequently suffers economic injury. You can make an assumption that, when the weather improves, their business will resume at the approximate level it was before the drought. In the urban renewal situation, you have a change of circumstances, and it may be analogous in the sense that you are tearing down one residential area and then building up a new one; the circumstances will revert to their first position. But on the other hand if there are going to be permanent changes, then you have more of a credit problem. Senator METCALF. The gas station that you mentioned, which is on an interstate highway between two interchanges we have a problem of relocation there, and we are not sure just exactly what will happen. Mr. DAVIS. Exactly. Senator METCALF. At the new location. Mr. DAVIS. To many of our businesses the location is one of the prime factors, and it is pretty difficult to project what is going to happen in the new location. Senator METCALF. Thank you very much, Mr. Davis. Mr. DAVIS. Thank you, Mr. Chairman. Senator METCALF. And thank you, gentlemen, for your appearance here. You have contributed to our understanding of the bill, and we are very pleased to have you. At this point in the record, we will insert the reports of the General Services Administration on S. 1201 and S. 1681. Hon. JOHN L. MCCLELLAN, GENERAL SERVICES ADMINISTRATION, Chairman, Committee on Government Operations, Washington, D.C. DEAR MR. CHAIRMAN: Your letter of February 25, 1965, requested the views of the General Services Administration on S. 1201, 89th Congress, a bill "To provide for equitable acquisition practices, fair compensation, and effective relocation assistance in real property acquisitions for Federal and federally assisted programs, and for other purposes." GSA's primary interest in S. 1201 relates to title I, part A. Since the remainder of the bill pertains to programs not affecting the responsibilities of this agency, our comments are confined to title I, part A. The purposes of title I, part A, of the bill are to encourage the acquisition by Federal agencies of real property through amicable agreements with owners. to establish a uniform policy for such acquisitions, and to promote public confidence in Federal land acquisition functions. Our preliminary study of the bill indicates that, if enacted, it would bring about major changes in Federal land acquisition laws, policies, practices, and procedures to achieve the purposes and objectives set forth in the declaration of policy stated in section 2. Except with respect to the provisions of sections 107, 108, 109, and 110 of title I, part A, concerning which our views are hereinafter set forth, we have not had adequate opportunity to evaluate its effect upon the program responsibilities of GSA or formulate an agency position on the bill. Such consideration as we have thus far been able to devote to the proposed legislation suggests that certain of its provisions, such as paragraph (3) of section 101 (a) which would provide that the head of an acquiring agency should establish a fair and reasonable price for the property not less than the appraised fair value, and make a prompt offer to the owner in the full amount so established, would require a major change in GSA's acquisition policies and practices. It seems to us this provision could do away with the time-honored practice of negotiated purchase of real property by the Government through exchange of offers with the owner, bargaining toward a mutually satisfactory price. This provision raises a question as to whether an agency would be justified, administratively, in paying more than the predetermined fair and reasonable price, a result which would undoubtedly increase the number of condemnation actions. and a result clearly not intended by the bill. Under current practices, GSA pays the appraised market value or better for the great majority of all the land it buys. The principal source of public discontent with established procedures stems from those instances where cooperative landowners in a project site agree to a negotiated sale for their property but some of their neighbors, who would not agree to sell to the Government at a price it was willing to agree to pay, later received higher awards in condemnation actions. We do not see how the enactment of section 101 (a) (3) of the bill would ameliorate this situation. The foregoing illustrates why we believe more extensive study and consideration of the bill is warranted before we would be able to formulate our views thereon. Accordingly, GSA recommends that the committee defer further consideration of S. 1201. Specifically with respect to the provisions of sections 107, 108, 109, and 110 of S. 1201, which are similar to the provisions of sections 3 through 7, part A, of S. 1681, GSA believes that enactment of these provisions of S. 1681 is highly desirable and would correct inequities under present law, and has submitted a favorable recommendation to your committee for its enactment subject to clarifying amendments. The Bureau of the Budget has advised that, from the standpoint of the administration's program, there is no objection to the submission of this report to your committee. Sincerely yours, LAWSON B. KNOTT, Jr., Administrator. Hon. JOHN L. MCCLELLAN, GENERAL SERVICES ADMINISTRATION, Chairman, Committee on Government Operations, DEAR MR. CHAIRMAN: Your letter of May 7, 1965, requested the views of the General Services Administration on S. 1681, 89th Congress, a bill "To provide for uniform, fair, and equitable treatment of persons, businesses, or farms displaced by Federal and federally assisted programs." The purpose of this bill is to establish a uniform policy for the fair and equitable treatment of owners, tenants, and other persons displaced by the acquisition of real property in Federal and federally assisted programs or by related activity in public improvement programs. This policy is to be as uniform as practicable as to (1) relocation payments, (2) advisory assistance, (3) assurance of availability of standard housing, and (4) Federal reimbursement for relocation payments under federally assisted programs. GSA's primary interest in S. 1681 relates to part A, sections 3 through 7. The remainder of the bill pertains to programs not affecting the responsibilities and functions of this agency and, therefore, we have confined our comments to part A. Except for acquisitions by the Department of Defense or any military department thereof, the Department of the Interior, the National Aeronautics and Space Administration, the Tennessee Valley Authority, and the Housing and Home Finance Agency, owners or tenants of land or interests in land acquired directly by GSA and other executive agencies may be paid only the fair market value of the property acquired. Expenses, losses and damages incurred by owners or tenants as a direct result of moving themselves, their families and possessions are not compensable. Reports issued by the Select Subcommittee on Real Property Acquisition of the House Committee on Public Works and the Advisory Commission on Intergovernmental Relations clearly indicate that the Federal, State, and local governments are falling far short of equity in their treatment of those persons who are displaced as a result of the programs of such governments. GSA has long advocated the enactment of legislation which would minimize inequities existing under the present state of law when property is acquired for use in Federal programs and has submitted to prior Congresses, as part of its legislative program, draft legislation to authorize reimbursement to owners and tenants of lands or interests therein acquired by the United States for moving expenses, losses, and damages. Our legislative proposal would have authorized GSA and other executive agencies not presently so authorized to reimburse displaced owners and tenants for such expenses, losses, and damages incurred by them in the process of moving themselves, their families, and their possessions from property acquired by these agencies. In the 88th Congress this proposed legislation was introduced in the Senate by you, at our request, as S. 1509. An identical bill, H.R. 6043, was introduced in the House of Representatives. S. 1509 passed the Senate and was referred to the House Committee on Public Works, but no action was taken by this committee on either S. 1509 or H.R. 6043. Although the legislation proposed by GSA was patterned after authority now vested by existing law in the agencies named above and, therefore, differed in some respects from the provisions of part A of S. 1681, we believe that enactment of S. 1681 would accomplish the purposes we have been seeking and would establish for the Government a workable, uniform system for fair and equitable treatment of individuals displaced by the acquisition of real property in Federal programs. However, in the interest of clarifying some of the relocation payments provisions of the bill we offer the following comments and recommended amendments for consideration by your committee. We recommended that the $300 payment provided for in section 3(c) (3) should be deleted from the bill in the interest of uniformity of treatment of displaced persons. Under the provision, a displaced owner would receive the payment, but a displaced tenant would not even though he purchased a new home. If the provision is retained in the bill, we recommend that availability of the payment be limited to those displaced persons who actually acquire the fee title or life estate in real property at the replacement location. Such limitation would be more consistent with the basic objectives of S. 1681. We also recommend that provision for extension of relocation assistance to persons occupying property adjacent to that taken for Federal purposes be deleted from the bill on the grounds of impracticability, impossibility of factually ascribing claimed losses to the Federal acquisition, and the availability of aid in such situations from other Federal sources. Accordingly, we recommend that the last sentence of section 4, beginning with the word "If" on line 20, page 5, and ending with the word "program" on line 25, page 5, be deleted. To remove any possibility of the specificity of section 6(a)(2) being later construed as limiting the President's authority to prescribe regulations assuring fair and reasonable relocation payments as required by section 3 and section 6(a) (1), we recommend that section 6 be revised so as to make clear that the expenses which the regulations may authorize to be paid or reimbursed are not necessarily limited to those specified in section 6(a)(2)(A) and section 6(a) (2) (B). With respect to section 6(a)(2)(A), which limits entitlement to actual and reasonable expenses of searching for replacement locations to farm operations, we suggest that the committee consider, in furtherance of the stated purpose of uniformity of treatment of all persons displaced by Federal acquisitions, whether entitlement to such expenses should also be extended to dwellings and businesses, taking into account, also, the administrative burden incident to determining the nature and reasonableness of such items of expenses which should be reimbursed. We suggest that the committee also consider whether the payment provided for in section 6(a)(2)(B), which section authorizes the payment of an expense not actually incurred by displaced persons as a result of Federal acquisitions, is inconsistent with the general purpose of section 3(a) of the bill, and if the provision is retained in the bill, also consider, again in the interest of uniformity of treatment, whether such provision be broadened to include displaced persons who move from a dwelling. In addition to the foregoing, we offer the following technical amendments and corrections to the bill: The typographical error in misspelling the word "business" in line 23, page 2. should be corrected. The word "or" in line 16, page 7, apparently is intended to mean "and" and should be changed to so read. The reference to section 2, line 9, and to section 2(a), line 13, page 7, should be changed to read section 3 and section 3(a), respectively. Subject to the foregoing comments, GSA favors the enactment of S. 1681. The Bureau of the Budget has advised that, from the standpoint of the administration's program, there is no objection to our submission of this report. Sincerely yours, LAWSON B. KNOTT, JR., Administrator. Senator METCALF. Our next witness was to be Mr. Lawson Knott. The last time he was before the Committee, at least as I remember it. he was here for confirmation. He is now confirmed, so he has sent Mr. Joe Moody to present his testimony. Mr. Moody, we are pleased to have you here. I see that you are accompanied by several of your colleagues. If you will identify them, we will be delighted to hear you in any way you want. STATEMENT OF JOE E. MOODY, GENERAL COUNSEL, GENERAL SERVICES ADMINISTRATION; ACCOMPANIED BY ROBERT T. DAVIS, DIRECTOR OF LEGISLATION; AND WILLIAM WHELAN, CHIEF COUNSEL FOR LAND ACQUISITION Mr. MOODY. Thank you, Mr. Chairman. My name is Joe Moody. I am the General Counsel of General Services Administration. Administrator Knott intended to make this presentation personally but at the last minute was unavoidably detained. He asked me to express his regrets to you that he is unable to be here. Senator METCALF. Certainly the members of this committee understand how difficult it is to be in four or five places at the same time. Mr. MOODY. Thank you, sir. I am accompanied on my right by Mr. William Whelan, who is our Chief Counsel for Land Acquisition, and by Mr. Robert Davis, who is Director of Legislation for GSA. I will proceed now, with your permission, to present Mr. Knott's statement. It is a pleasure to appear before you today as you continue your consideration of S. 1201 and S. 1681, similar legislative proposals providing for uniform relocation compensation and equitable treatment of businesses, places, and farms displaced by land acquisition programs. Since the General Services Administration, for reasons hereinafter discussed, prefers the latter of these two proposals, I shall address my remarks first to S. 1681, a bill to provide for uniform, fair, and equitable treatment of persons, businesses, or farms displaced by Federal and federally assisted programs. The purpose of this bill is to establish a uniform policy for the fair and equitable treatment of owners, tenants, and other persons displaced by the acquisition of real property in Federal and federally assisted programs or by related activity in public improvement programs. This policy is to be as uniform as practicable as to (1) relocation payments, (2) advisory assistance, (3) assurance of availability of standard housing, and (4) Federal reimbursement for relocation payments under federally assisted programs. GSA's primary interest in S. 1681 relates to part A, sections 3 through 7, providing for relocation payments to persons displaced by Federal land acquisition programs. Since we do not administer federally assisted programs involving land acquisitions and the other programs dealt with in the other sections of the bill, our comments will be confined to part A. Except for acquisitions by the Department of Defense or any military department thereof, the Department of the Interior, the National Aeronautics and Space Administration, the Tennessee Valley Authority, and the Housing and Home Finance Agency, owners or tenants of land or interests in land acquired directly by GSA and other |