Answer. Severance damages are considered in arriving at the fair market value and consequently are paid as an integral part of the purchase price. Question. Does your agency reduce any offer because of benefits which remaining property might receive as a result of Federal activity? Answer. No. Question. Do the provisions for appraisal and compensation for property under S. 1201 differ from the current practices of your agency? Answer. The provisions concerning fair value in section 102 generally appear to parallel existing practices. Question. In reference to compensable items to be acquired by the Government as proposed in section 103, its provisions vary from current practices. Will these provisions result in higher payments for property than under current practices? Answer. It seems logical to assume that adoption of these provisions would result in higher payments. Question. Will these provisions reduce litigation over payments for property taken? Answer. Since, as we have previously indicated, we have not studied these provisions of S. 1201 in depth, we are not prepared at this time to estimate their effect on litigation. Question. Section 104 of S. 1201 authorizes the acquisition of evidences of debt under certain circumstances. Would this practice coincide with the procedures observed by your agency? Answer. No. We do not now acquire any evidences of debt. Senator METCALF. I do have one more question. That is this question of an amendment of section 6(a) (2) which you talked about on page 5 of your statement. You suggested that perhaps section 6(a)(2)(A) and 6(a)(2)(B) would restrict the power of the President. Do you think the President already has authority to prescribe regulations for fair and reasonable relocation payments? Mr. MOODY. No, sir. I am merely suggesting, or intending to suggest, that because this section says that the regulations he shall prescribe shall provide for certain things, I am somewhat Senator METCALF. What is the old phrase, I have been away from the law too long? Mr. MOODY. It is the so-called eiusdem generis rule. I think that is the Latin term for it. Senator METCALF. Yes. Mr. MOODY. I am just concerned that if this is enacted, some lawyers might take the position that that is restrictive instead of illustrative. Senator METCALF. The staff tells me that they have taken out at the bottom of page 8 of S. 1681, subsection (d) Mr. MOODY. Yes, sir. Senator METCALF (continuing). And at the top of page 9 they have cut out "consistent with the provisions." You think that that takes care of your problem? Mr. MOODY. This is in S.1681? Senator METCALF. Yes. Anyway the point is that this may be unduly restrictive to the exact provisions and the President or the agency may not have sufficient flexibility. Mr. MOODY. That is the point we are trying to make. We want to be sure that he has enough flexibility to provide for payments that really should be made. 51-896-65-12 Senator METCALF. Thank you very much, Mr. Moody. I am sorry that we have run out of time, as frequently happens to us, and I have to be on the floor in a few minutes. Mr. MOODY. Thank you very much. Senator METCALF. The subcommittee will be in recess until July 13 at 10 a.m. (Whereupon at 12:05 p.m., the committee recessed to reconvene at 10 a.m. Tuesday, July 13, 1965.) UNIFORM COMPENSATION FOR RELOCATION TUESDAY, JULY 13, 1965 U.S. SENATE, SUBCOMMITTEE ON INTERGOVERNMENTAL RELATIONS, The subcommittee met, pursuant to recess, at 9:45 a.m., in room 3302, New Senate Office Building, Senator Edmund S. Muskie (chairman of the subcommittee) presiding. Present: Senator Muskie. Staff members present: David B. Walker, staff director; Robert E. Berry, minority counsel; Arnold H. Raphaelson and Mark Freeman, professional staff members; and Dee Craven, assistant chief clerk. Senator MUSKIE. The hearing will be in order. 8 Our schedule has been thrown off base because of activities going on on Pennsylvania Avenue which practically require a passport to get through the lines-I found out this morning. I expect several of our witnesses will be late and we will be taking the witnesses considerably out of order. Our first witness this morning is the Honorable William B. Widnall, a Member of Congress from the State of New Jersey. We appreciate your taking the time to come over to visit with us and to help us with this important piece of legislation. I know that you are under pressure of time. And we would like to give you this opportunity to present your statement. We will be glad to hear from you now. STATEMENT OF HON. WILLIAM B. WIDNALL, A REPRESENTATIVE IN CONGRESS FROM THE SEVENTH CONGRESSIONAL DISTRICT OF THE STATE OF NEW JERSEY Mr. WIDNALL. Mr. Chairman, I appreciate your hearing me now. I do have some other pressing business on the House side. I have a short statement which I will read. I think it covers my own thoughts pretty well. I am pleased to appear before your subcommittee on the issue of full and just compensation. In an able speech in the Congressional Record of April 1, 1965, Senator Edmund S. Muskie showed how important a matter this is, for he pointed out that Federal and federally assisted programs, particularly housing and urban renewal programs, highway programs, and so on, will annually displace in the 8 A Shriners' parade was staged on July 13. 175 next 4 to 8 years 111,000 families and individuals, 18,000 businesses, and 4,000 farm operators. Senator Muskie's bill, S. 1681, would bring the highway and Federal real property acquisition programs up to the compensation standards prevailing in the urban renewal and housing programs. Senator Sparkman's bill, S. 1201, which is based on the work of the Select Subcommittee on Real Property Acquisition of the House Public Works Committee, would set procedural standards for all Federal and federally assisted property acquisition programs. As a ranking minority member of the House Special Subcommittee on Housing, I have been concerned for some time over the inadequancy of compensation received by those forced to give up their property as a result of an eminent domain taking. In January of 1964 I introduced a comprehensive housing bill containing a title devoted solely to the problem of compensation for condemnees. Again, on March 18 of this year, I introduced a comprehensive housing bill, H.R. 6501, containing a similar title which had been expanded to include a revised version of the procedural recommendations made by the House Real Property Acquisition Subcommittee staff report. This was in line with the Real Property Acquisition Subcommittee recommendation that the appropriate committee having jurisdiction over a Federal or federally assisted property acquisition program should act, within its particular jurisdiction, on the problem. In arriving at a consensus on what form the suggestions in H.R. 6501 and identical bills introduced by the other Republican members of the House Special Subcommittee on Housing could be included. immediately in the Housing and Urban Development Act of 1965, Chairman William A. Barrett of the Housing Subcommittee and I consulted with the top officials of the Housing and Home Finance Agency. The result is the new title IV of the Housing and Urban Development Act of 1965, H.R. 7984, which the House has since adopted without controversy-on June 30-as part of the total housing package. In taking this step we also had in mind the statement, in the Senate report on the Housing Act of 1964, that the Senate Banking and Currency Committee would take the matter of just compensation and property acquisition up this year following the completion of the Real Property Acquisition Subcommittee study. In view of the solid progress made by the House, first in the study by the Select Subcommittee on Real Property Acquisition, and second, by the House Special Subcommittee on Housing in developing title IV of H.R. 7984, it is the hope of those of us in the House who worked on this problem, that the Housing and Urban Development Act of 1965, when it is signed into law by the President, will contain the just compensation title IV as passed by the House. Nor should it come as any surprise to find the housing and urban renewal laws again setting the pace as far as compensation and property acquisition standards are concerned. These programs involve the displacement of more people, and the failure of more displaced small businesses, than any other federally assisted program. Title IV of H.R. 7984 covers the full range of Federal programs in the housing and urban renewal fields. It provides the procedural safeguards recommended by the Select Subcommittee on Real Property Acquisition and incorporated in S. 1201, except that these safeguards are made mandatory rather than suggestive procedures before any funds for acquisition are committed by the Federal Government. In addition, the bill contains a requirement that I have been suggesting for some time; namely, that the property owner receive 75 percent of the Government-appraised value of his property immediately, rather than being forced to wait for funds should he decide to contest the full award in court. We expect this to cut down heavily on business failures because of lack of capital for relocation, or the heavy borrowing which homeowners now find necessary in order to buy a new home when the award is being contested and funds are held up. H.R. 7984 also contains an increase in relocation payments for small businesses from $1,500 to $2,500, and the payment of costs for the transfer of real property. In the committee report on H.R. 7984 the administrators of the program are directed to consider insurance and storage fees, and the cost of reinstallation of relocated fixtures as part of the definition of moving costs. In light of these significant House actions, if the objective of the two bills before your subcommittee, S. 1201 and S. 1681, is to bring the standards of the other Federal and federally assisted programs of property acquisition up to the standards prevailing now in the housing and urban renewal programs, the Senate bills will be incomplete without further amendment. The subcommittee, in effect, will have to run in order to stand still. And I would go further to suggest that even this new effort in the housing and urban renewal field represents only an increase in the minimum equitable treatment that our citizens can rightfully expect from their government. For example, if moving expenses can be defined to include reinstallation of fixtures, there is no reason why it cannot be defined to include reinstallation of equipment as well. It has been my understanding that this would be included in the House committee report, but a late hour objection by the HHFA, on totally specious grounds, prevailed. Similarly, the entire arbitrary limitation of $25,000 on business moving expenses, administratively determined, deserves reexamination. This arbitrary figure, in its lack of sufficient reimbursement for some, and its potential for abuse through overreimbursement for others, points up the need to consider a more useful approach for arriving at just compensation awards. If this subcommittee seeks the opportunity to make a significant breakthrough in this field, rather than continue the more routine approach to the problem, I would suggest that it examine the possibility of substituting a replacement cost concept for the present actual value concept used to determine compensation for property taken. It is the only way I know of to avoid the pitfalls of arbitrary awards and ad hoc solutions and yet still reflect in the award such items as business reopening expenses, loss of rents or profits on a temporary basis, and the increase in price for suitable replacement homes as a result of a decreased supply and an increased demand occasioned by clearance and relocation. By accepting this new concept for Federal and federally assisted acquisition programs, Congress would set a persuasive example for the State to follow, which could then be applied without |