developments-critical of the issuance of the certificate.

There seems to be building up a resentment against the status of the President as a disabled veteran, his deep interest in veterans' affairs, and his feeling of closeness to our former fighting men and their families.

There seems to be implied in this undercurrent of carping a strange theory that somehow the President is making political capital of his veteran's status and his interest in their affairs.

This sniping reminds me of the sniping on the great battlefields of World War I. It was always the courageous fellow advancing in front of all the other soldiers who drew the heaviest enemy fire.

This seems to be happening now to the President.

Now it is undeniable that he is a veteran, and-a disabled veteran-others have called him a war hero. But never has he himself referred to his combat record as anything but that of a citizen doing his best, the same way most veterans regard their wartime contribution.

As evidence to support this outlandish political theory, it is pointed out that President Kennedy participated personally in the 1961 Veterans' Day ceremony at Arlington National Cemetery; that he has seen fit to honor the memory of deceased veterans by issuing a memorial certificate to the next of kin; that he twice proposed that Congress increase the compensation rates of the service connected; that, following enactment of this increase, the veteran received a notice with his check stating "President Kennedy has signed a law"-that veterans were similarly reminded of the President's role in the acceleration of insurance dividend checks.

It is undeniably true that President Kennedy has felt deeply his kinship with veterans. He was the first PresiHe was the first President to play an active part in the national observance of Veterans' Day. Not since 1954, when this holiday was so named, did a Chief Executive personally participate in the ceremony as he did in 1961.

Mr. Speaker, I honor the President for his personal participation in the Veterans' Day ceremony at Arlington National Cemetery, for by doing so he is relating service to one's country with the history of our Nation, with our national

is a decent, thoughtful, human act. I am appalled to hear it referred to as a "politically inspired action."

istration." It bears the personal signature of President Eisenhower: GROUP LIFE INSURANCE FOR FEDERAL CIVILIAN EMPLOYEES

THE WHITE HOUSE, Washington, D.C., August 17, 1954. To Federal Civilian Employees:

As a result of favorable action by Congress, we are now able to provide the benefits of low-cost group life insurance to Federal employees. The proposal to provide this protection to employees through private in

suming a portion of the cost, was developed as a part of the program of this administration to improve the Government's personnel system.

The critics also mutter darkly about inserts mailed out with insurance dividend and compensation checks. The facts are simple. The insert used with facts are simple. The insert used with the regular 1961 Government life insurance dividend said that the payment was "part of the President's program. This was done to clearly call attention to the fact that it was an advance pay-surance companies, with Government asment made on the assumption that policy premiums would be continued for the entire year, or else an overpayment would take place. It was the first time dividends had ever been paid in advance. Normally, they are paid over an entire year at the anniversary date of each individual policy. At the time, the press was full of news about the President's program to advance the economy and of the part to be played by paying GI dividends ahead of time. Therefore, this wording was used to identify the checks, and so prevent needless, delaying queries from individuals.

Similarly, a notice went out with payment of service-connected compensation checks of October 1962, following enactment of the law which provided for an increase in the service-connected compensation rates. The purpose was to explain that the veteran's check was augmented by a 3-month retroactive inmented by a 3-month retroactive increase, and to forestall a deluge of telecrease, and to forestall a deluge of telephone calls, letters, and personal visits inquiring about the extra amount.

Again, press attention at the time had focused on the President's action in signing the compensation increase, a measure he had twice urged Congress to measure he had twice urged Congress to pass.

The VA so identified the check. In effect, it was simply a quick, easily understood method of saying "this is the compensation increase you have been reading about in the newspapers."

The criticism of these inserts seems to be based on an unusual theory of the President's freedom of speech.

It is permissible, so this theory goes, for the President to talk to the American people on radio or television. may also deliver a speech, address, or remark in person. It is acceptable for remark in person. It is acceptable for him to give interviews and be quoted extensively in newspapers, magazines, or books-both hard cover and paperback. The President may also direct a message The President may also direct a message to the public via posters or signs.

However, if a Presidential messageor even bare mention of his name or

I urge all eligible employees to give serious consideration to this worthwhile program which will help provide economic security for their families.

DWIGHT D. EISENHOWER.

THE PLAN AT A GLANCE

What are the benefits?

Life insurance at low cost without requiring a medical examination.

Payment of double indemnity for accidental death.

Payment for accidental loss of one or more limbs or eyesight (dismemberment).

Life insurance after retirement at no cost to you.

Free insurance if you are 65 years of age or older. Am I eligible?

Yes, unless you (1) are a noncitizen employed overseas, or (2) fall within the small group of employees excluded because of the nature and type of employment, such as part time, seasonal, or intermittent employment.

Who pays for the insurance?

You pay 25 cents per $1,000 of insurance each biweekly pay period by payroll deduction until you reach age 65. If you are paid on other than a biweekly basis, the cost is proportionate. (See table following.)

The Government helps to pay the cost of this insurance by contributing half as much as you do.

How do I become insured?

If eligible, you will be automatically insured unless you fill out standard form 53 (waiver of life insurance coverage) which is available at your personnel office.

For how much will I be insured? The amount of insurance depends upon your annual basic salary. (See table following.)

You may not choose a lesser or greater amount of insurance.

If you are 65 years of age or older, or when you become age 65, the amount of your insurance will be reduced by 2 percent for each month you are over 65 until a reduction of 75 percent is reached. The re

problems. This is a most fitting, a most proper usage of the prestige and power

of the head of state.

I would say that his leadership of the national ceremonies did much to lift this great day of dedication out of the obscurity and apathy into which it had declined.

I would say that it is absurd to grumble and to point out that President Kennedy's predecessor did not do likewise.

Likewise, it is absurd to look behind the President's issuance of a memorial certificate for a political motive. This

are mailed to individuals or groups, then complaints are heard about "political

motivation and partisan machinations."

May I add that the use of the name of the President of the United States in announcing actions of the Federal Government is common practice. The President, after all, is the Chief Executive. Illustrative of this practice is the enclosed announcement to all Federal civilian employees. It mentions a new lowcost group life insurance plan "developed cost group life insurance plan "developed as a part of the program of this admin

No.

or

Must I name a beneficiary? Your life insurance will be payable in the following order: (1) widow widower, (2) children, (3) parents, (4) estate, (5) next of kin. Your personnel office will have the proper form for you to use if you wish to change this order or name someone else.

What if I retire?

Your life insurance is provided without further cost, if you retire on an immediate annuity either for disability or after at least 15 years of creditable service, at least 5 years of which are civilian. Your double indemnity and dismemberment protection stops.

VETERANS' ADMINISTRATION. Always keep your choice of beneficiary up to date.

(VA form 9-5976 (NR), May 1961.) NOTICE SENT TO INSURED TO HAVE DIVIDENDS LEFT ON DEPOSIT

The VA is paying ahead of schedule the 1961 dividend on Government life insurance as part of the President's program for advancing the economy. These advance payments are made on the assumption that your premiums will continue to be paid for the remainder of your policy year. If premiums are not so paid, this dividend will constitute a partial overpayment which will become an indebtedness against your insurance. VETERANS' ADMINISTRATION. (VA form 9-5974 (NR), February 1961.)

NOTICE

President Kennedy has signed a law increasing service-connected compensation rates for disabled veterans. The increase is included in the enclosed check. This check also includes a retroactive payment equal to a 3-month increase as provided by the new law unless special action is necessary. In that case you will get your adjustment check in the near future.

1 The amount payable for all checks received after the first one.

2 Veterans disabled 50 percent or more may receive an additional allowance for dependents. The law does not change the amounts paid for dependents.

[U.S. SEAL]

THE UNITED STATES OF AMERICA HONORS THE MEMORY OF

This certificate is awarded by a grateful nation in recognition of devoted and selfless consecration to the service of our country in the Armed Forces of the United States.

President of the United States.

Mr. Speaker, at the State level in Illinois a certificate of grateful appreciation is issued to each draft board member signed by the secretary of state, for their patriotic services to the State and

Nation.

Mr. Speaker, in view of the foregoing facts, it is not necessary to defend the President against his critics, but rather to apologize to him and to the thousands of widows and children of deceased veterans who have received from the President a memorial certificate honoring the memory of their loved ones. I am appalled to think that partisan politics and mudslinging are being indulged in in an attempt to sully this patriotic program attesting to the gratitude of a grateful nation through its President.

Before presenting the facts about the memorial certificate, I would like to call attention to an article that appeared on the first page of the Houston Chronicle on Thursday, August 1, 1963, entitled "Yes, Adrienne, It Is Indeed a StoryA Big, Big Story."

(By Bill Porterfield) To the BUREAUCRAT UNKNOWN:

For you it was a routine clerical procedure, repeated, no doubt, thousands of times a year. The checking of records, the printing of the name on a form certificate stamped with the President's signature, the mailing

to the widow or the mother. You did it with

machine-like precision, and with just about as much feeling as a computer crackling out statistics on birth and death rates.

You didn't wonder or weep over it. No matter.

It arrived at its destination-a tiny house at 4111 Basil in North Side Houston-and performed its magic.

Adrienne Lloyd, 71, took it from the mailbox, noted the White House return address, and opened the envelope with trembling

hands. She read the citation:

"THE UNITED STATES OF AMERICA HONORS THE MEMORY OF EARL E. LLOYD

"This certificate is awarded by a grateful nation in recognition of devoted and selfless

consecration to the service of our country in the Armed Forces of the United States.

"JOHN F. KENNEDY."

Earl Lloyd was her husband. He never fired a shot at the enemy, never left his country. He died in Veterans' Administration hospital here 11 years ago, at 60, of natural causes.

But he was Adrienne's bugler boy, her stateside sergeant when she was young and blonde and beautiful and danced the tango at the Khaki Club in Fort Worth. She was touched that, after all these years, the President would remember an ordinary doughboy of 1918.

Her life was once full. But for years now, with her dogs and cat and boarder, it was virtually empty. But this. Wasn't it wonderful?

Adrienne did something she never has done before. She got up her courage and called her newspaper. Would they be interested to know about her late husband's commendation from the President? Would a reporter want to come out and talk with her about it? Or was she wasting the editor's time? Perhaps it was a small thing, but she was so proud. Was it worth a story?

"Nuclear

"Profumo, Race Riots." "Communist Threat." Threat." "Overkill." "Buddhist Revolt." "Stocks Rise." "Stocks Fall." "Auto Crash." "Police Brutality." "Lost Dog." "Drowned Child."

Yes, Adrienne, yes.

I am impressed with a program that touches a lonely widow's life with the rich remembrance of things past. I am impressed, too, that a tough-minded editor, awash in a sea of cold facts and hard news, also saw this program as a warm

human interest story-one big enough for his front page.

But now, Mr. Speaker, I am depressed to see this program being criticized. I can only conclude that the critics-if they are sincere—simply do not have the

facts.

For given the facts, the only criticism that can be leveled against this program is, "Why did not someone think of it sooner?" The fact that President Kennedy began this program is a tribute to his humanity and his sense of identification with people.

The Veterans' Administration assists in this program by identifying the next of kin eligible to receive the certificates. These are mailed from Washington in White House envelopes.

How does the Veterans' Administration actually identify these eligible next of kin?

There are actually three methods:

First, in deaths occurring after March 1962, notices are normally received in one of VA's regional offices, which in turn checks the next of kin from the veteran's records. A certificate is then mailed without any action on the next-of-kin's part.

Second, in deaths occurring before March 1962, a certificate may be issued upon request of the next of kin.

A third method was later developed because of the widespread interest in the President's program, and because of the growing volume of inquiries from relatives of veterans who died before March 1962.

At the White House and at VA offices throughout the country people wanted to know how they could receive a certifi

cate honoring the memory of their loved ones. The VA decided to let these thousands of widows know how they could apply for a certificate.

How was the VA to do that, however? Take full page advertisements in newspapers? Buy time on radio and television?

It seems to me that the Veterans' Administration showed good sense by doing neither. Instead, it made arrangements with the Treasury Department for a letter and an application card to be inserted with compensation and pension checks mailed to persons receiving death benefits. Such a mailing is being made to next of kin. The mailing is scheduled a few States a month to even out the clerical workload.

This method has the advantage of being directed to those people most likely to be interested; that is, the next of kin of deceased honorably discharged vet

erans.

In addition, the President of the American Gold Star Mothers, Inc., recently expressed her appreciation for the initiation of the memorial certificate letter, and asked that her entire organization be "blanketed into" the program without waiting to apply via a VA letter in a benefit check.

Mr. Speaker, as so often happens, when a critic is caught off base, he is caught way off base. This is one of those times. Not only has the VA come up with a good idea, they have also come up with an inexpensive idea.

Should VA be deluged with requests for certificates in the form of letters and telephone calls, it would be very costly indeed. Each one would have to be individually checked out to see that the deceased veteran was eligible and that the next of kin was eligible, and so forth. Records would have to be searched, correspondence dictated, and so forth. In all, it would cost about $2.50 per request.

The method used by the VA relies upon automatic data processing equipment, for the applications are on punchcards. It has the cooperation of the Treasury and Post Office Departments. It eliminates the need for dictation of letters and search of records, and it cuts the cost to 22 cents, versus $2.50 per application.

Mr. Speaker, I do not wish to take up any more of the Members time in answering the political attacks upon this Presidential Memorial Certificate.

I would only hope that these carping critics could see some of the lettersmany of them from their own constituents that have come to the President and the Administrator of Veterans' Affairs. In all, more than 480,000 certificates have been issued. The favorable response has been overwhelming. The universally expressed sentiment is that this is a document that will be treasured.

Exposed to the genuine and deep appreciation of these widows and children and other next of kin, I am convinced that these critics would see the memorial certificate program as one that should be above politics and political smears. I would hope they would see it as in the best tradition of American gratitude to

ward those who served, a program that should be continued under all administrations.

WATER
WATER SUPPLY AND SEWERAGE
DISPOSAL IN URBAN AREAS

Mr. REIFEL. Mr. Speaker, I ask unanimous consent that the gentlewoman from New Jersey [Mrs. DWYER] may extend her remarks at this point in the RECORD and include extraneous matter. The SPEAKER. Is there objection to the request of the gentleman from

South Dakota?

There was no objection.

Mrs. DWYER. Mr. Speaker, I have introduced for appropriate reference a bill, H.R. 9078, which is designed to encourage greater cooperation and efficiency in the planning and construction of community water systems and to improve the adequacy of water and sewerage systems in urban areas. It would amend the National Housing Act in several important respects, and in view of the severe drought which recently plagued many parts of the country, including my own State of New Jersey, I would urge upon our colleagues the importance of taking constructive action along these and other lines to strengthen our water systems, especially in heavilypopulated urban areas.

Title I of this bill would remove the population restrictions upon communities seeking assistance under the public facilities loan program in the case of loans for water and sewerage projects. Currently communities of 50,000 population or more, or communities whose combined population exceeds 50,000 joining together to provide sewer and water facilities on a joint or cooperative basis, are not eligible for such loans. This title would also grant adequate authority to the Housing and Home Finance Administrator to defer, more effectively than at present, the interest payments on public facility loans for projects planned to meet anticipated growth needs.

Title II of the bill would provide that individual or subdivision development housing projects authorizing individual wells and septic tanks be ineligible for FHA or VA insurance or loans in areas where the installation of public or community water and sewerage systems is economically feasible.

The provisions of title III would authorize a program of FHA mortgage insurance for land development costs, including costs of providing adequate community water and sewerage systems. The objective of this additional mortgage insurance coverage would be to stimulate private investment in wellplanned and sound land development and to reduce the use of private wells and septic tanks by residential land developers and builders.

The proposed legislation is based on a detailed and well-documented report entitled "Intergovernmental Responsibilities for Water Supply and Sewage Disposal in Metropolitan Areas," which was adopted last year by the Advisory Commission on Intergovernmental Relations,

of which I am a member representing the House. The Commission directed its attention to the problems of achieving satisfactory water supply and sewerage disposal services in urban areas and the need for adjusting governmental policies and practices to accommodate current and anticipated increases in population and water use in these areas. The Commission focused attention on the problems of inadequate investment, uneconomical water utilities development and fragmented responsibility. Among its findings was the fact that public investment in water and sewer facilities is inadequate, but sewerage treatment and water quality are more pressing problems than water supply and distribution.

Water problems were found to be most critical in the suburbs. It was found that a large part of the difficulty arises from reliance on individual water supply and waste disposal systems. The indiscriminate use of wells and septic tanks encourages urban sprawl, often endangers public health, and rarely provides a permanent solution to the problem of obtaining and disposing of water.

Local communities seeking to provide adequate sewerage and water systems find that they cannot get Federal public facility loans to supplement other sources of financing if the population is over 50,000 or 150,000 in area redevelopment areas. The community also finds that loans are not available when it joins with other communities to build a sewerage or water system serving a total population greater than the prescribed limit, even if its own population and the population of the other cooperating communities are individually within the existing legislative limitation.

The present 50,000 population limitation of the public facility loans program has several major disadvantages with respect to meeting governmental responsibilities for water supply and sewage disposal in metropolitan areas. First, it directly discriminates against communities of 50,000 population or more by not permitting them to receive public facility loans. Second, it encourages fragmentation, duplication, and inadequate long-term facilities by prohibiting bond action under the Federal loan program by a number of communities within a metropolitan area to meet water and sewer needs.

Congress has agreed that the public facility loans program should be used to assist communities to provide public facilities which have growth capacity sufficient to supply the services that will be needed by the increased population of the community in the foreseeable future. At present, the Housing and Home Finance Administrator has authority to postpone repayment of the principal on financial assistance extended under the public facility loans program. Section 501(c) of the Housing Act of 1961 authorized the Housing and Home Finance Administrator to defer payment of interest on 50 percent of a public facility loan for a period of up to 10 years if the loan does not exceed 50 percent of the development cost of the project financed by the loan, and if the Administrator determines that the applicant for the loan

will experience above-average population growth. However, in its present form this deferred interest provision has been inoperable and has not been utilized since it was enacted.

To make the use of this deferment of interest provision feasible and effective, section 202 of the bill I have introduced would remove the present provision that interest can be deferred on only 50 percent of the loan made under the public facility loans program, and would remove the requirement that 50 percent of the development cost of the project be financed by private borrowing or other means. In addition, the requirement that the Housing and Home Finance Administrator find that the applicant will experience "above average" population growth has been modified to require that the applicant will experience "substantial" population growth. Let me emphasize that these amendments would not in any way undermine the financial soundness of the loan. All of the existing requirements and standards in the public facility loan program for approval of loans would remain in full effect. Further, there would be no subsidies or additional costs involved. Any payments that would be deferred would have to be repaid, but over a longer period of time.

The Federal housing program as presently administered goes far toward encouraging provision of service by public or other adequate community water and sewerage systems, wherever such systems are available or economically feasible. In some areas, however, local laws and ordinances do not authorize the construction of public or adequate community systems, though the construction of such systems is made both desirable and economically feasible by the existing or anticipated population. In such circumstances, the Federal housing officials have been unable to assure the provision of public or adequate community water and sewerage systems to properties they insure despite the desirability and economic feasibility of providing such facilities.

The enactment of this bill

would stimulate the construction of public or adequate community systems, where such systems are economically feasible, by requiring the Federal Housing Commissioner and the Administrator of Veterans' Affairs to refuse assistance to new housing unless such housing will be served by public or adequate community water and sewerage systems.

Under present Federal laws, a builder who takes the trouble to install community water and sewer systems to serve his houses finds that his extra expenses cannot be financed under FHA insured

lending. With the anticipated major demand for suburban building sites in the next decade, it is imperative that an adequate supply of satisfactory new building sites be available at reasonable prices to individuals and small builders as well as to site developers. The sites should be supplied with essential utilities and community facilities and be efficiently planned for orderly urban development. They should also be planned and developed in the context of the community or area in which they are situated so as to insure protection of other

neighborhoods in the area and to proneighborhoods in the area and to promote sound and better coordinated community growth. To help stimulate private investment in proper land development and reduce use of private wells and septic tanks, this bill would authorize FHA insurance for site preparation and development, including costs of water development, including costs of water and sewer lines and systems.

Although the public facility loan and FHA programs have stimulated the provision of adequate facilities for water supply and sewage disposal in many communities in the past, the limitations I have described prevent their full potential from being realized. The bill I have introduced would remove these limitations. Enactment of this legislation would help greatly to discourage uneconomical and unsatisfactory investeconomical and unsatisfactory investment in water and sewerage systems in ment in water and sewerage systems in our growing urban areas. The modification of existing Federal programs to better meet the needs of our growing better meet the needs of our growing urban areas should contribute to more urban areas should contribute to more coordinated policymaking and economicoordinated policymaking and economical investment in community water and sewer services and to the more orderly

growth of our suburban communities.

The specific objectives embodied in this bill have received the specific endorsement of the American Municipal Association, the U.S. Conference of Mayors and the National Association of Counties.

Under unanimous consent, I include the text of the bill at this point in my the text of the bill at this point in my remarks:

H.R. 9078

A bill to amend the National Housing Act with respect to water and sewerage facilities and mortgage insurance for land development

Be it enacted by the Senate and House of Representatives of the United States of Representatives of the United States of America in Congress assembled,

TITLE I-COMMUNITY FACILITIES

SEC. 101. The last sentence of paragraph (4) of section 202(b) of the Housing Amendments of 1955 is amended by inserting after "project" the following: "(1) for the storage, "project" the following: "(1) for the storage, treatment, purification, or distribution of water, (2) for the provision of sewerage, sewerage treatment, or sewerage facilities, or (3)".

SEC. 102. The second paragraph of section 202(b) is amended to read as follows: "No securities or obligations shall be purchased, and no loans shall be made, including renewals or extensions thereof, which have maturity dates in excess of forty years. Subject to such maximum maturity, the Administrator in his discretion may provide for the postponement of the payment of all or a por

tion of the interest on financial assistance extended to an applicant under this section for a period up to ten years where it is determined by the Administrator that such applicant will experience substantial population growth and the project would contrib

ute to to orderly community development, economy, and efficiency; and any amounts so postponed shall be payable with interest in annual installments during the remaining maturity of such assistance: Provided, That in the case of any financial assistance on which payment of all or a portion of the for the repayment of one-third of the interest is deferred, there shall be pledged

amount of such assistance the full faith and

credit of the municipalities or other political subdivisions to be served by the project for which such financial assistance is provided: Provided further, That the guarantee re

quired by the first proviso in this paragraph shall be in addition to any other security received for the financial assistance extended."

TITLE II-PROVISION OF WATER AND SEWERAGE FACILITIES

SEC. 201. (a) Title II of the National Housing Act is amended by adding at the end

thereof a new section as follows:

"Water and sewerage systems

"SEC. 325. Notwithstanding any other provision of this Act, no mortgage which covers new construction shall be approved for insurance under this Act (except pursuant to a commitment made prior to the date of the enactment of this section) if the mortgaged property includes housing which is not served by a public or adequate community water and sewerage system: Provided, That this limitation shall be applicable only to property which is not served by a system apX of this Act and which is situated in an proved by the Commissioner pursuant to title area determined by the Commissioner to be an area where the establishment of public or adequate community water and sewerage systems is economically feasible: Provided further, That for purposes of this section the Commissioner shall determine the economic

feasibility of establishing such public or adequate community water and sewerage systems without regard to whether such establishment is authorized by law or is subject to approval by one or more local governments or public bodies."

(b) Section 1804 of title 38, United States Code, is amended by adding at the end there

of a new subsection as follows:

"(e) No loan for the purchase or construction of new residential property (other than property served by a water and sewerage system approved by the Federal Housing Commissioner pursuant to title X of the National Housing Act) shall be financed through the assistance of this chapter if such property is not served by a public or adequate community water and sewerage system and is determines that the establishment of such located in an area where the Administrator systems is economically feasible. For pur

poses of this subsection, the Administrator shall determine the economic feasibility of establishing public or adequate community water and sewerage systems without regard to whether such establishment is authorized by law or is subject to approval by one or more local governments or public bodies." TITLE III-MORTGAGE INSURANCE FOR LAND

"SEC. 1002. As used in this title—

"(1) the term 'mortgage' means a lien on real estate in fee simple, or on the interest of either the lessor or lessee thereof (A) under a lease for not less than ninety-nine years which is renewable or (B) under a lease having a period of not less than fifty years to run from the date the mortgage was executed; and the term 'first mortgage' includes such classes of first liens as are commonly given to secure advances (including but not being limited to advance during construction) 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 instrument or instruments, if any, secured thereby, and may be in the form of trust mortgages or mortgage indentures or deeds of trust securing notes, bonds, or other credit instruments;

"(2) the terms 'mortgagee', 'mortgagor', and 'State' shall have the same meaning as when used in section 207 of this Act;

"(3) the term 'improvements' means water lines and water supply installations, sewer lines and sewage disposal installations, streets, curbs, gutters, sidewalks, storm drainage facilities, and other installations or work, whether on or off the site which the Commissioner deems necessary or desirable to prepare land primarily for residential and related uses; and

"(4) the term 'development' means the process of making and installing improvements in undeveloped or partially developed land.

"SEC. 1003. (a) The Commissioner is authorized to insure, upon such terms and conditions as he may prescribe, any first mortgage (including advances in such mortgage during development) in accordance with the provisions of this title and to make commitments for the insurance of such mortgage prior to the date of its execution or disbursement thereon; but no mortgage shall be insured under this title after June 30, 1968, except pursuant to a commitment to insure issued before such date.

"(b) To be eligible for mortgage insurance under this title a mortgage shall

"(1) be executed by, and cover property held by, a mortgagor approved by the Commissioner and have been made to and be held by a mortgagee approved by the Commissioner;

"(2) cover the land developed and the improvements made with the assistance of the mortgage insurance unless they are in public ownership;

"(3) involve a principal obligation in an amount satisfactory to the Commissioner but in no event to exceed 75 per centum of the estimated value of the security as of the completion of the development to be financed with assistance under this title;

"(4) have a maturity and contain repayment provisions satisfactory to the Commissioner, and bear interest (exclusive of premium charges for mortgage insurance and such service charges and fees as may be approved by the Commissioner) at a rate satisfactory to the Commissioner, but not to exceed 6 per centum per annum on the amount of the principal obligation outstanding at any time; and

"(5) contain such terms and provisions with respect to protection of the security, payment of taxes, delinquency charges, prepayment, additional and secondary liens, and other matters as the Commissioner may in his discretion prescribe.

"(c) The Commissioner may consent to the release of a part or parts of the mortgaged property from the lien of the mortgage on such terms and conditions as he may prescribe.

"(d) No mortgage shall be accepted for insurance under this title unless the Commissioner finds that

"(1) the insurance would represent an acceptable risk to the Land Development Insurance Fund, as established by subsection (g) of this section, giving consideration to the experience to be obtained from, or demonstration effected by, the undertaking and to the expected contribution of the land development to sound community growth;

"(2) the land to be developed will meet the housing and related needs of moderate income families or will contribute to the orderly development of a well-planned residential neighborhood which will meet such needs;

"(3) the improvements will comply with all applicable State and local governmental

requirements and with minimum standards approved by the Commissioner; and

"(4) the land will be developed in accordance with a plan which

"(A) provides reasonable assurance that the land will be part of a well-planned residential neighborhood which will (i) have a long economic life, (ii) be protected against undesirable traffic patterns and other adverse physical conditions, and (iii) be served by public systems for water supply and sewerage, and such school, playground, shopping, recreational, and other facilities as the Commissioner deems adequate: Provided, That where the Commissioner finds that a public system for water supply or sewerage is not feasible, he may approve an adequate privately owned system regulated with respect to user rates and charges, capital structure, methods of operation, and rate of return, or an adequate cooperatively owned system; and

"(B) has been determined by the Housing and Home Finance Administrator to be consistent with a comprehensive plan for the area in which the land is situated meeting criteria established by the Administrator for such comprehensive plans.

"(e) The Commissioner shall collect reasonable premiums for the insurance of any mortgage under this title and shall make such additional charges as he may deem reasonable for the analysis of the land development plan and the appraisal and inspection of the property and improvements. On or before January 1, 1968, the Commissioner shall make a report to the Congress concerning premium rates and additional charges under this title which he estimates would be adequate to protect the solvency of the Land Development Insurance Fund and to provide income sufficient for the program established by this title to be self-supporting on a continuing basis.

"(f) The provisions of subsections (e), (g), (h), (i), (j), (k), (1), (m), (n), and (p), of section 207 of this Act shall be applicable to mortgages insured under this title, except that as applied to such mortgages (1) all references therein to the Housing Insurance Fund or the Housing Fund shall be deemed to refer to the Land Development Insurance Fund, (2) all references therein to section 207 or section 210 shall be deemed to refer to this title, and (3) any reference to an annual premium shall be deemed to refer to such premiums as the Commissioner may designate.

"(g) There is hereby created the Land Development Insurance Fund which shall be used by the Commissioner as a revolving fund for carrying out the provisions of this title. The Commissioner is authorized to transfer to the Fund the sum of $1,000,000 from the War Housing Insurance Fund created by section 602 of this Act. General expenses of operation of the Federal Housing Administration under this title may be charged to the Land Development Insurance

"SEC. 1004. Any contract of insurance executed by the Commissioner under this title shall be conclusive evidence of the eligibility of the mortgage for insurance, and the validity of any contract of insurance so executed shall be incontestable in the hands of an approved mortgagee from the date of the execution of such contract, except for fraud or misrepresentation on the part of such approved mortgagee.

"SEC. 1005. Nothing in this title shall be construed to exempt any real property acquired and held by the Commissioner under this title from taxation by any State or political subdivision thereof to the same extent, according to its value, as other real property is taxed.

"SEC. 1006. The Commissioner is authorized to make such rules and regulations as he may deem necessary or desirable to carry out the provisions of this title, including regula

tions with respect to user rates and charges, capital structure, method of operation, and rate of return of private utility companies operating utilities financed with assistance under this title. As an aid to such regulation, the Commissioner may make such contracts with, and may acquire for not to exceed $100 such stock or interest in, the utility company as he may deem desirable.

"SEC. 1007. The Commissioner shall adopt such regulations or procedures as he deems necessary reasonably to assure that the outstanding balance of any mortgage insured under this title shall not at any time exceed 75 per centum of the aggregate amount of (i) the value, as estimated by the Commissioner, of the mortgagor's interest in the land before development and (ii) the actual costs of development, as such aggregate amount is allocated by the Commissioner at the time to the property remaining under the lien of the insured mortgage. For this purpose, the Commissioner shall require the mortgagor to submit from time to time during development of the land, and upon completion of such development but prior to final endorsement of the mortgage, the actual costs of development. Such certifications shall be accompanied by such data and records as the Commissioner shall prescribe. Upon the Commissioner's approval of a mortgagor's certification, such certification shall be final and incontestable, except for fraud or material misrepresentation on the part of the mortgagor. As used in this section, the term 'actual costs' means the costs exclusive of rebates or trade discounts, to the mortgagor of the improvements, including amounts paid for labor, materials, construction contracts, land planning, engineers' and architects' fees, surveys, taxes and interest during development, organizational and legal expenses, such allocation of general overhead expenses as are acceptable to the Commissioner, and allowance for contractor's profit deemed reasonable by the Commissioner if the mortgagor is also the contractor as defined by the Commissioner, and other items of expense incidental to development which may be approved by the Commissioner."

SEC. 302. Section 219 of the National Housing Act is amended by inserting "the Land Development Insurance Fund," after the "Apartment Unit Insurance Fund,”.

SEC. 303. The first paragraph of section 24 of the Federal Reserve Act is amended by inserting before the last sentence the following new sentence: "Notwithstanding the limitations and restrictions in this section, any national banking association may make loans for site preparation and development which are secured by mortgages insured under title X of the National Housing Act."

SEC. 304. Section 5(c) of the Home Owners Loan Act of 1933 is amended by adding at the end thereof the following new paragraph:

"Without regard to any other provision of this section and to such extent as the Board may by regulation permit, any such association is authorized to invest in loans for site preparation and development which are secured by mortgages insured under title X of the National Housing Act."

SEC. 305. Section 212 of the National Housing Act is amended by inserting after the third sentence of subsection (a) of such section the following new sentence: "The provisions of this section shall also apply to insurance under title X with respect to laborers or mechanics employed in land development financed with the proceeds of any mortgage insured under that title."

INCREASED INCENTIVE FOR ECONOMICAL AND COMPREHENSIVE SEWAGE TREATMENT FACILITIES Mr. REIFEL. Mr. Speaker, I ask unanimous consent that the gentlewoman from New Jersey [Mrs. DWYER] may