Answers to these questions were submitted to the newspaper for publication on September 8, 1966. Early in September 1966, it was announced that public meetings would be held on September 21, 22, and 23, at which time any interested persons could receive information on formation of and methods of purchase by cooperatives. Open sessions were held during the day on each of these dates as well as during the evening of the first 2 days. Local representatives from HUD and AEC as well as a Washington representative of FHA were available throughout the period. In order to assure that all interested persons might be informed of these meetings, daily radio announcements were made in addition to newspaper notices. Predisposal actions were to be culminated by a general offering for sale of the apartments proposed to be made on October 21, 1966. Despite the actions taken over an extended period to inform affected residents of the details of the proposed plan, there was increasing evidence of a lack of understanding of the program and dissatisfaction with some of its requirements. Following announcement of the proposed general offering date, a large number of residents asked that the general offering be delayed pending further study of alternate disposal methods. Although some cooperatives had been formed and were anxious to proceed with the schedule, agreement was reached between AEC and HUD to postpone the offering. On October 25, 1966, several individual citizens and representatives of various groups discussed the planned sales of apartment buildings with AEC Commissioner Wilfrid E. Johnson, general manager Robert E. Hollingsworth, ALO manager L. P. Gise, other AEC personnel, and representatives of Senator Clinton P. Anderson, Congressman Thomas G. Morris, and the Joint Congressional Committee on Atomic Energy. On November 22, 1966, the Department of Housing and Urban Development and the Atomic Energy Commission agreed to the formation of an ad hoc committee, composed of senior staff members from the Washington headquarters of each agency and the Los Alamos Scientific Laboratory, to study all aspects of the sale of multifamily housing at Los Alamos and to recommend a future course of action. The work of that committee, its conclusions and recommendations will be covered in Mr. Parks' testimony. That concludes my prepared statement, Mr. Chairman. Representative MORRIS. Thank you, Mr. Roser. In order to expedite the hearings and to save the time of the committee, I am going to present to you, Mr. Roser, a series of questions from the subcommittee and ask you to respond in writing for the record. I also want copies of the questions and the answers delivered to the news media. Mr. ROSER. That will be fine, sir. (See app. 5, p. 162.) Representative MORRIS. Do you have any questions, Senator Bennett? Senator BENNETT. No. Representative MORRIS. Mr. Hosmer? Representative HOSMER. No questions, Mr. Chairman. Representative MORRIS. Thank you, Mr. Roser. The Committee will next hear from Mr. Parks, Associate General Counsel of the AEC. STATEMENT OF FRANKLIN N. PARKS, ASSOCIATE GENERAL COUNSEL, U.S. ATOMIC ENERGY COMMISSION Mr. PARKS. Mr. Chairman, Senator Bennett, and Mr. Hosmer, my name is Franklin N. Parks. I am Associate General Counsel of the Atomic Energy Commission. I was also Chairman of the Committee on Disposal of Multiple-Family Housing at Los Alamos. That Committee was established November 22, 1966, to study problems that had developed in the proposed disposal of the multifamily housing, consider alternative methods of disposal, and report to the Commission. I would like at this time to offer for the record a copy of the Committee's report. (See app. 3, p. 151.) Representative HOSMER. How voluminous a report is that? Representative HOSMER. If the witness will yield, I will ask unanimous consent that the report be included as part of the record. Representative MORRIS. Hearing no objection, it is unanimously agreed that the report will be made part of the record. Mr. PARKS. In brief, the Committee found: 1. That the contemplated disposal program would not serve all the objectives of the Atomic Energy Community Act; namely, expeditious -disposal, with a minimum of dislocations while enabling a greater number of residents to participate in homeownership; 2. That there was interest in a variety of methods and disposal; and 3. That amendment of the disposal procedures to provide more flexibility would better serve the objectives of the Community Act. The Committee concluded that a procedure could be developed which would provide a better balance among the objectives of the Community Act, flexibility in methods of homeownership, and a reasonable expectation of a continuing number of rental units. At the same time the Committee concluded that the decision in 1963 not to split any of the quadruplexes and offer them as single-family units was correct. Representative MORRIS. The Senator from Utah. Senator BENNETT. Because I do not know the exact physical situation in these quadruplexes and what they mean to you, I just want to be sure that the decision was that they would be offered in a group as quadruplexes. Mr. PARKS. That is correct. Senator BENNETT. And not as four single family units. Mr. PARKS. That is correct. The thought in 1961 and 1962 was that they could be sold as singlefamily homes. After an engineering analysis had been made it was concluded that they would have to be sold as a single unit containing four family units. The Committee recommended the following disposal program: 1. Extend to each occupant (defined in Section 21g) of an apartment property (apartment sales lot), at the time it is offered for sale, a priority interest in its purchase. By extending this to occupants, the current discrimination against retirees and widows of project-connected persons is eliminated. 2. Authorize assignment by an occupant of his priority interest to (i) another occupant of the sales lot; or (ii) an entity (as used herein this includes a group of occupants who would purchase as tenants in common) composed solely of occupants of the sales lot, projectconnected persons, and other persons residing in the community. (This will also preclude more than one outstanding assignment.) 3. Award tentative priority of purchase to that occupant or entity demonstrating that he or it represents the priority interest of more occupants of the apartment sales lot in question than any other occupant or entity; ties would be decided by lot. 4. Award final priority of purchase to that occupant or entity granted tentative priority of purchase provided that (a) in the case of an occupant he demonstrates that after receiving tentative priority of purchase he has offered to accept assignment of priorities from all other occupants on the same terms and that he represents the priority interests of occupants of 70 percent of the housing units in the apartment sales lot and (b) in the case of an entity it demonstrates that after receiving tentative priority of purchase it has offered membership or association to all occupants of the apartment sales lot in question and that it represents the priority interests of occupants of 70 percent of the housing units in the apartment sales lot. 5. Within 30 days of the award of final priority of purchase (as provided in 4. above) an occupant of the apartment sales lot whose priority interest is not represented by the occupant or entity receiving the final priority of purchase may request from the Commission or its agent a lease to the housing unit he occupies, such lease to extend for not more than 15 months from the date the property was first offered for sale. The Commission at the time of closing the priority sale shall execute such a lease if so requested. The Commission would, in a manner similar to that provided in section 56 of the act, guarantee the lessee's performance to the purchaser. 6. In the event the occupant or entity awarded tentative priority of purchase (as provided in 3. above) is unable to qualify for award of final priority of purchase under 4. above, or having so qualified is unable to consummate the purchase within such time as the Commission prescribes, his, or its, tentative rights will terminate and all assignments of priority interests thereto will expire. 7. At this time, a second priority offering will be made in accordance with the procedures 2 through 6, above except that the final priority award will not be made to an individual but will be made only to an entity which has demonstrated that its members-who need not be occupants have agreed to occupy at least 70 percent of the housing units of the apartment sales lot. 8. In the event the occupant or entity awarded tentative priority of purchase pursuant to 7. above is unable to qualify for final priority of purchase or having so qualified is unable to consummate the purchase within such time as the Commission prescribes (or in the event. no occupant or entity qualifies for tentative priority of purchase) the apartment sales lot in question should be offered to the highest bidder in a manner consistent with sections 53b. and 53c. Providing further alternative procedures would be inconsistent with the objective of expeditious termination of the Government's interest in the property. 9. Finally, a person who has exercised a priority in the purchase of a housing unit at Los Alamos would not be permitted to consummate a priority purchase under the program outlined in paragraphs 1 through 8 above, nor would such a person be considered in qualifying any occupant or entity for a priority award. The Committee believes a procedure such as that described above will accommodate in the greatest degree the objectives of the act and at the same time provide the greatest acceptable degree of choice and flexibility in methods of ownership to the occupants of apartment properties. It is apparent that under the first round-through step 4 above "occupants" will enjoy control of their future. This will serve the statutory objective of minimizing dislocation of residents. If "occupants" permit step 7 above to be invoked then the objective of additional homeownership by project-connected persons is served. Dislocation of present residents is in any event mínimized by the provision under which they may request a lease from the Commission on their housing units for a period of not more than 15 months from the date the property was first offered for sale. At the same time the entity or occupant purchasing would be guaranteed performance of the lease by the Commission. It is intended that this procedure parallel that provided in section 56 for junior tenants in unsplittable duplex buildings except for the time of entering into the lease and the term of the lease. However, neither the lease nor the guarantee would be available in the event of sale to the highest bidder on the theory that such a purchaser will continue to operate the property as rental property. Moreover, this procedure would present occupants of apartment sales lots with the maximum flexibility in determining how the sales lot would be purchased. For example, two or three occupants of a quadruplex could assign their priority interests to one occupant and he could purchase as an individual. Or, they could assign their priority interests to a corporation they formed or to a cooperative which was large, medium, or small. They could even assign their priority interests to a corporation they formed which could, after purchase, take the necessary steps to convert the property to condominium ownership if that was the desire of the occupants and permissible under State law. Finally, as only 70 percent of the occupants of an apartment sales lot acting in concert would be required to effect a purchase on the first round and only 70 percent of the housing units, including the initial qualifying occupants, would be represented on the second roundparagraph 7 above-it is possible that a substantial number of rental units will remain in the apartment properties so purchased. It is intended that the 15-percent deduction specified in subsection 35 a., the deduction provided in subsection 36 d., the financing provisions of section 62 and the indemnity provided in sections 63 to 66 be applicable to any priority purchaser under this procedure (but not to a high-bid purchaser). Allowing 70 percent of the occupants of an apartment property, or occupants plus project-connected persons, to obtain the full deductions for the entire property is comparable to the situation in which the senior tenant of an unsplittable duplex qualified for the full discount on both units. In addition, no occupant of an apartment building 84-223-67-2 would lose his priority to share in the purchase until he had rejected membership in or association with the purchaser representing 70 percent of the housing units in the property. The proposed bills would authorize the Commission to establish a disposal program for the apartment houses at Los Alamos as recommended in the Committee report. We believe either bill, if enacted, will alleviate the adverse conditions which led to community dissatisfaction with the existing disposal program. At the same time, we believe that the disposal program authorized by these bills will provide a more equitable basis for the sale of the apartment houses. We, therefore, recommend enactment of either S. 1623 or H.R. 9199. In this connection we believe the effect of the parenthetical phrase in the first sentence of the second proviso of section a. is not entirely clear. However, we understand it to mean that the entity referred to must consist of at least one occupant and may include either or both project-connected persons and persons residing in the community. We also understand that section c. would preclude purchasers of split units in duplexes from participating in the priority purchase of an apartment house. That concludes my prepared statement, Mr. Chairman. Before we proceed further, I want to ask unanimous consent of the subcommittee that the bill and official report of the Atomic Energy Commission be printed in the record. Hearing no objection Senator BENNETT. I am not going to object Representative MORRIS. The Senator from Utah. Senator BENNETT. The witness on page 7 of his statement refers to H.R. 9199 and S. 1623 as though they were somewhat different but that he would be willing to see either passed. Aren't they identical? Representative MORRIS. They are identical. Senator BENNETT. Then, of course, I have no objection. Representative MORRIS. With unanimous consent, the request is agreed to. Mr. Parks, I have a couple of questions I think I should ask at this time. TIMETABLE FOR SALE OF BUILDINGS If one of these bills before us today was enacted during this session of Congress, what time schedule do you foresee for the sale of multiple-family dwellings by the AEC? In other words, how long is it going to take you to implement this legislation and to start selling? Mr. PARKS. I would like to consult with Mr. Roser on this. Mr. PARKS. I would expect the program to start fairly rapidly-in a matter of a month or so. Representative MORRIS. Is that your understanding, Mr. Roser? Mr. ROSER. I think our desire, certainly, Congressman Morris, would be to start as soon as possible. However, I think we do need to conduct a very intensive informational campaign so that the residents, the people who will be affected by the legislation, will understand at each step of the procedure what they are getting into. |