S. 1681, which I note includes a recommendation that action on S. 1201 be deferred.

U.S. DEPARTMENT OF THE INTERIOR,

OFFICE OF THE SECRETARY, Washington, D.C., June 29, 1965.

Hon. JOHN L. MCCLELLAN,

Chairman, Committee on Government Operations,
U.S. Senate, Washington, D.C.

DEAR SENATOR MCCLELLAN: Your committee has requested this Department's views on S. 1681, a bill to provide for uniform, fair, and equitable treatment of persons, businesses, or farms displaced by Federal and federally assisted programs.

We recommend the enactment of S. 1681, if amended as suggested herein.

The purpose of this bill is to establish a uniform policy for the treatment of owners, tenants, or other persons displaced by, among other things, the acquisition of real property pursuant to Federal or federally assisted programs.

It has long been the policy of this Department to pay to the property owner the market value of the property acquired for our program purposes. This policy follows the principle set forth in the fifth amendment of the Constitution that private property shall not be taken for public use, without just compensation. Just compensation includes all elements of value that inhere in the property, but it does not exceed market value fairly determined. Olson v. United States, 292 U.S. 246, 255 (1934). The market value of property and its improvements can be estimated with considerable accuracy. It is usually said that market value is what a willing buyer would pay in cash to a willing seller. United States v. Miller, 317 U.S. 369 (1943). All other expenses and losses incurred by owners and tenants of real property as a result of Federal acquisitions, such as moving and relocation costs, absent congressional authorization, are viewed by the courts as consequential damages that are not compensable.

Congress, however, has recognized that the payment of market value is not always enough. Congress authorized the Secretary of the Interior by the act of May 29, 1958 (43 U.S.C. 1231-1234) to reimburse owners and tenants only of lands or interests therein acquired for the construction, operation, or maintenance of developments under his jurisdiction for expenses and other losses and damages incurred by such persons in moving themselves, their families, and their possessions as a direct result of such acquisition. The total reimbursement is limited to 25 percent of the fair value of each parcel of land acquired.

It should be pointed out that the Comptroller General, in an opinion dated December 18, 1958 (B-137960), concluded that because of unresolved doubts about the applicability of the 1958 act to the Secretary's acquisitions of park lands, the best interests of the United States would appear to be served if payments of the moving expenses of owners and tenants of lands acquired for use in the national park system were deferred until such time as the matter may be presented to the Congress for clarification. In answer to a further inquiry from this Department, the Comptroller General, in an opinion of February 19, 1959 (B-137960), advised that the doubt was so great that he would be required to take exception to the payment of a claim filed under the 1958 act respecting National Park Service land, prior to a clarification by the Congress. The firm opinion of February 19, 1959, appears tantamount to an expression of opinion by the Comptroller General that the act does not apply to lands acquired for inclusion in the national park system.

S. 1681 repeals the 1958 act. In its place, it provides a much broader program of relocation payments for Federal and federally assisted programs. We think that this is desirable. It recognizes that there is a need for uniformity in making relocation payments. This uniformity is designed to meet the needs of the individual owners and other persons.

Section 3(a) of the bill, in the case of this Department, directs the Secretary of the Interior to make fair and reasonable relocation payments to displaced persons in accordance with regulations issued by the President whenever he acquires lands or interests therein for program purposes. These regulations will be issued pursuant to section 6 of the bill.

Section 6 directs the President to issue such regulations as he deems necessary to assure the displaced person (1) that relocation payments will be fair and reasonable and as uniform as practicable, (2) that he shall be reimbursed for actual and reasonable moving costs for himself, his family, his business, farm

operation, or other personal property, (3) that, in the case of a farm operation, he is reimbursed for actual and reasonable costs in searching for a replacement farm, (4) that if he disposes of personal property connected with his business or farm operation and replaces it at a new location, he will be reimbursed for reasonable costs in moving such original property to the new location, (5) that he shall be paid promptly after his move, and (6) that he will have a reasonable time in which to apply for relocation payments.

This section also provides that the President may, in his discretion, establish a maximum on the amount of relocation payments to be made. Presumably, this maximum could be uniform for all agencies or it could be established on a program basis. In either event, we think that such a limitation is highly desirable.

In addition, this section directs the President to provide for agency review upon request of the displacee of any determination as to eligibility for relocation payments or the amount thereof, or both. We think that this provision is desirable. Presumably, it permits the Secretary of the Interior to adjust the amount of payment upward and downward depending on the facts.

Since the making of relocation payments to persons who are displaced by Federal or federally assisted acquisition programs is a statutory privilege not otherwise compensable, we think that the decision of the agency head, in this case the Secretary of the Interior, should be final and not subject to judicial review. We therefore recommend that section 6 of the bill be amended by adding at the end thereof, a new subsection (e) as follows:

"(e) All determinations by the head of the agency made under this part shall be final."

Subsections (b) through (d) of section 3 of the bill give to displaced persons an opportunity to choose between the Presidential regulations for relocation payments and a fixed statutory schedule for such payments.

Subsection (b) permits the displacee who moves or discontinues his business to elect to accept a fixed relocation payment in an amount equal to the average annual net earnings of the business or $5,000 whichever is lesser. The Secretary must be satisfied that the business will lose substantial customers as a result of relocation. He must also be satisfied that the business is not part of a commercial enterprise which has one or more units of the same kind that are not being acquired. We also think that the maximum payment of $5,000 under this subsection may be too high. The Bureau of the Budget is recommending $2,500. We concur.

Subsection (c) permits a displacee who moves from a dwelling to elect to accept a fixed relocation payment. This payment is (1) a moving expense allowance determined by a schedule established by the Secretary which must not exceed $200, (2) a dislocation allowance of not more than $100, and (3) an additional $300 if the displacee owned the property in fee or had a life estate therein. We think that this latter provision is unnecessary. We understand that it is to cover expenses incurred by such person at the time he acquired the property which may range from a very short to a very long time before the Secretary acquires it. We agree that provision should be made for relocation payments arising directly from the acquisition by this Department, but we are opposed to paying an additional amount for unrelated expenses. We therefore recommend that subsection (c)(3) of section 3 of the bill be deleted.

Subsection (d) permits the displacee who moves or discontinues a farm operation to elect to accept a fixed relocation payment of $1,000. The Bureau of the Budget is recommending $500. We concur.

Where the entire farm operation is not acquired, the payment of $1,000 may only be made if the Secretary determines that the remainder of the property is not an "economic unit." The term "economic unit" is not defined. We think it should be.

Section 3 (e) of the bill permits the Secretary, in his discretion, to pay, in addition to the relocation payments set forth in the President's regulations or the fixed provisions of subsections (b) through (d) of section 3, on behalf of any displaced family, elderly person, or handicapped person a sum equal to the difference between 20 percent of such person's or such family's income and the amount needed to rent a decent, safe, and sanitary building for 2 years. The total sum must not exceed $1,000. While we are not opposed to this provision, we think that other legislative proposals now pending in Congress may be adequate to take care of these people.

Section 3 (f) is concerned with judicial review of actions taken pursuant to this section. This provision will not be necessary if the committee adopts our amendment to section 6 of the bill relating to final agency determinations.

Section 4 of the bill directs the Secretary of the Interior, in the case of the Department, to establish a relocation assistance program for displacees. He may also offer this service to other persons occupying property that is adjacent to the property he acquires, if his acquisition will cause substantial economic injury. We think that the assistance program should be limited to those persons actually displaced. While it is conceivable that others may be caused substantial economic harm by reason of Federal and federally assisted acquisition programs, we believe that there are other Federal programs which are available to aid these people. We therefore recommend that the second sentence in section 4(a) of the bill be deleted.

It should be noted that section 6(c) of the bill authorizes the President to require any Federal agency, including this Department, to use the services of other agencies in carrying out the provisions of S. 1681. We would expect to utilize the services of other agencies in carrying out the relocation assistance programs of section 4 of the bill.

Section 5 of the bill directs that State acquisitions for Federal project purposes shall include relocation payments, relocation assistance, and assurance of availability of housing.

Section 7 of the bill authorizes the Secretary to use any funds available to him for land acquisition for programs of this Department for obligation and expenditure to carry out the provisions of S. 1681. We think that this provision is desirable.

Section 12 of the bill defines various terms used in the bill. Subsection (2) defines the term "displaced person" to mean owners of businesses, owners of farms, heads of families, and other persons who, as a result of the acquisition or imminence of acquisition of real property pursuant to a Federal or federally assisted program moves from such property or discontinues his business or farm operation. We interpret the term "imminence of acquisition" to apply only to situations where the person moves from the property or discontinues his business or farm operation and the property is actually acquired by the Secretary. If, however, it is intended to apply to cases where the person moves, etc., and the property is not finally acquired or taken by the Secretary, then we strongly recommend that the term be deleted from the bill or be specifically limited to cover the situations mentioned in our above interpretation. The same term is used in subsection 12 of section 12 of the bill.

Section 8 of the bill relates to federally assisted programs.

Subsection (a) of this section provides (1) that if a State agency acquires real property, (2) that if Federal grants are available to pay the costs thereof or the costs of improvement thereof, and (3) that if a State agency agrees with the Secretary of the Interior to provide to displacees for moves from such property the fair and reasonable relocation payments pursuant to sections 3(a) and 6 of S. 1681, and the fixed relocations payments in subsections (b) through (d) of section 3, the relocation assistance programs described in section 4(b), and a feasible method for temporary relocations of families and individuals and other specified assurances, then Federal grants may be made to share the cost of relocation payments. A State agency need not agree to pay more than $25,000 to a displaced person.

Section 9 of the bill provides that the Secretary cannot approve after the effective date of this act any agreement with a State agency calling for Federal assistance in financing the cost of real property acquisitions or improvements thereon unless the State enters into an agreement pursuant to section 8(a). Thus, under this provision we would be unable to make payments to States under the Federal aid in fish and wildlife restoration acts, the Land and Water Conservation Fund Act of 1965, or the recently enacted Commercial Fish Research and Development Act to pay the appropriate Federal share of land acquisition or improvements on lands to be acquired until the State agrees to relocation payments. We think this is desirable.

Subsection (c) of section 8 of the bill authorizes the head of the Federal agency to amend any contract with a State entered into before the effective date of this bill to include an agreement on relocation payments.

Subsection (d) provides that the cost of relocation project payments may be made a project cost for which Federal funds are available and the State shall be eligible for Federal aid in the same manner and to the same extent as other project costs. This subsection also provides that the first $25,000 of the reloca

tion costs to any person will be all Federal. We are strongly opposed to this latter provision. We think that the States should share the relocation costs to the same extent and in the same manner as they share all other project costs. We therefore recommend that lines 22 through 24 on page 11 of the bill be deleted and that the comma at the end of line 21, on page 11, be deleted and insert therein a period.

Subsection (e) of section 8 permits the Secretary to make advances to the State to cover relocation payments.

We recommend the following technical changes in the bill:

1. On page 7, line 9 change the "2" to "3".

2. On page 7, line 13 change “2(a)” to “3(a)”.

3. On page 9, line 22 insert "(a)" after "section 3".

Your committee has also requested our views on S. 1201, 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.

The provisions of sections 107 through 118 of title I of S. 1201 are similar to the provisions of S. 1681.

Sections 101 through 106 of the bill are intended to establish a uniform policy on land acquisition practices among Federal land acquisition agencies. We fully agree with the objective. Some of these practices are now being followed by this Department. Others, however, could result in a substantial change in our acquisition policies. We have not had sufficient time to consider all of these changes and their implications on the programs of this Department. We therefore recommend that your committee defer consideration on S. 1201 until later in this Congress at which time we will expect to comment more fully. The Bureau of the Budget has advised that there is no objection to the submission of this report from the standpoint of the administration's program. Sincerely yours,

JOHN A. CARVER, Jr., Under Secretary of the Interior.

STATEMENT OF LEWIS A. SIGLER, ASSISTANT LEGISLATIVE COUNSEL; ACCOMPANIED BY DAVID B. FINNEGAN, ATTORNEY, LEGISLATIVE COUNSEL'S OFFICE, DEPARTMENT OF THE INTERIOR

Mr. SIGLER. Mr. Chairman, I have with me a member of the Legislative Counsel's Office, Mr. David B. Finnegan.

Mr. Chairman, the Department's report on these two bills has been filed with your committee. We recommend the enactment of S. 1681 with amendments. We recommend that action on S. 1201 be deferred until later in this Congress. Our analysis and evaluation of that bill in terms of programs of the Department of the Interior has not been completed, but we expect to be able to report on the bill within a short time.

Senator MUSKIE. It is conceivable that the committee may wish to consolidate these two bills. Do you recommend, then, that we delay that action until you file your report?

Mr. SIGLER. Mr. Chairman, we will expedite the filing of our report on S. 1201 if you desire to combine them so that you will have the advantage of whatever comments we may have.

Senator MUSKIE. All right.

Mr. SIGLER. What I am trying to say here is that we have not finished our analysis of S. 1201. I am not prepared to speak regarding the details of that bill.

The purpose of S. 1681 is to establish a uniform policy, applicable to all Federal agencies, for the treatment of owners, tenants, and others who are displaced by the acquisition of real property pursuant to a Federal or a federally assisted program.

We agree with the basic premise of the bill, that the payment of just compensation in accordance with the constitutional requirement of the fifth amendment does not fully compensate a displaced person for all of the expenses or losses incurred when his land is acquired by the Government. Moving costs, relocation costs, and other costs are regarded as consequential damages and are not compensated unless specifically authorized by statute.

Senator MUSKIE. Even if S. 1681 is passed it would not provide full compensation?

Mr. SIGLER. Not full compensation, but it would provide for substantial additional compensation which we think is fair.

Congress has provided for the payment of actual moving expenses in the case of land acquisition by some Federal agencies. In the case of the Department of the Interior, the authority was granted in a 1958 act. That act gave the Secretary discretionary authority to reimburse owners and tenants of lands acquired by him for actual expenses and damages incurred as a direct result of removing themselves, their families, and their possessions. The total reimbursement may not exceed 25 percent of the value of the land acquired. Although the language of the 1958 act seems to apply to all land acquisitions by this Department, the Comptroller General has concluded that it does not apply to acquisitions for the national park system without further consideration by Congress. Furthermore, the act applies only to Federal acquisitions, and not to State acquisitions under federally assisted

programs.

The Department of the Interior has a sizable land acquisition program. The Fish and Wildlife Service acquired in fiscal year 1964 approximately 65,000 acres of land at a cost of $8.4 million. The Bureau of Reclamation acquired in fiscal year 1965 approximately 56,500 acres of land at a cost of $11.2 million. The National Park Service acquired in fiscal year 1965 approximately 41,562 acres of land at a cost of $20.3 million. All of these programs are of a continuing nature and are expected to continue for a number of years. Under the fish and wildlife program, a total of $23,000 was paid to 39 claimants for moving expenses under the 1958 Act. Only one of the claimants received the full 25 percent allowable under the act, and the average claim was 1.2 percent of the price of the land. Under the reclamation program, a total of $80,000 was paid to 75 claimants for moving expenses under the 1958 act.

I would like to interpolate that the act provides for the payment of actual expenses, and the claimants must document their actual expenses. What I just read to you was the result of that procedure.

Senator MUSKIE. Let me ask you this question about S. 1681. If it had been in effect at the time, would it have been necessary to change these figures on reimbursement?

Mr. SIGLER. Those figures would probably be the same for moving expenses. The present law does not apply to the expenses provided in S. 1681 for businesses and farms. This is just the removal of the person and his property to another location.

Senator MUSKIE. My question was intended to draw out information as to whether or not these other provisions would have been relevant to the acquisitions that you have just described.