DEPARTMENT OF HOUSING And Urban DEVELOPMENT, August 25, 1967. Hon. JOHN O. PASTORE, DEAR MR. CHAIRMAN: In accordance with Section 102 of the Atomic Energy Community Act, as amended, there is attached the Department of Housing and Urban Development's progress report of activities under the Act through June 30, 1967. Our report covers functions transferred to the Department by Executive Order. We understand that the Atomic Energy Commission has reported to the Committee separately on its activities under those sections of the Act for which the Commission retained responsibility. Sincerely yours, ROBERT C. WEAVER, PROGRESS STATUS, DISPOSAL AND FINANCING FUNCTIONS, AS OF JUNE 30, 19671 OAK RIDGE, TENNESSEE, AND RICHLAND, WASHINGTON The sales program started at Oak Ridge in September 1956 and Richland in June 1957. Disposition of 11,700 properties having a book value of $73.9 million has been completed. On hand to be liquidated are 48 mortgages having a book value of $2.9 million. LOS ALAMOS, NEW MEXICO The Atomic Energy Community Act of 1955 was amended by P.L. 87-719 approved September 28, 1962, to include the transfer of government ownership of the Los Alamos Community to private and municipal ownership and operation. The Department of Housing and Urban Development advised and assisted the Atomic Energy Commission with predisposition activities after establishing a Community Disposition Staff field office on July 1, 1963. These activities included planning, platting, classification of properties, and development of priorities regulations for which the AEC retained responsibility. The Federal Housing Administration completed the first segment of appraisals of Los Alamos properties on August 27, 1965. The properties in this group consisted of 1,545 residential houses, single family (detached), duplex (two family), and split duplex (semi-detached) subject to priorities and established the current fair market value of the government's interest at $16.7 million. These appraisals were posted at Los Alamos for public inspection on August 30, 1965. On October 19, 1965, the finding of reasonable possibility of successful disposal by the Government of all real property at the community of Los Alamos, New Mexico, was published pursuant to Section 51 of the Act. The first general offering of 316 single-family houses to priority holders was made on November 2, 1965, and the first sale consummated on November 18, 1965. Priority holders have at least 90 days in which to exercise their right to purchase. Appraisals of all properties classified for sale have been completed and are as follows: 1 In accordance with sec. 102 of the Atomic Energy Community Act of 1955, as amended. SUMMARY OF OPERATIONS, JUNE 80, 1967, LOS ALAMOS, NEW MEXICO Financing As prescribed by statute, sales are for cash except when financing is not available on reasonable terms from other sources, the Secretary may take back a purchase money mortgage. Mortgages on residential properties bear interest at the rate authorized by FHA regulations at the time the notes and mortgages are executed. Advances for financing property repair and improvements on residential property are also authorized and such sums are included in the mortgage. Mortgages acquired in the sale of commercial properties carry an interest rate of 6 percent for a term of 10 years. Residentials-Single Family and Duplex Houses 1,545 houses having an appraised value of $16.7 million have been sold. Net sales proceeds amounted to $12.1 million of which $7.7 million was represented by 1,008 FHA insured mortgages. Statutory deductions on these properties amounted to $4.6 million. Remaining to be sold are 193 Denver steel houses not included in the original group of properties classified for sale. Appraisal of these properties was completed and posted on June 29, 1967. The current fair market value was established at $744,225 and tenant enhancement value at $3,670. These houses were offered in July 1967. Residentials-Vacant Lots 41 vacant residential lots appraised at $85,050 were offered to priority holders on March 21, 1966. 34 exercised the right to purchase and the remaining 7 were offered by competitive bid on November 14, 1966, and March 20, 1967. All lots have been sold and net sales proceeds amounted to $89,200. Churches and Non-profits On June 9, 1966, appraisals of the following properties were posted: 16 churches____ 15 non-profit organizations___ $96, 450 105, 400 Total (31 properties) ---- 201, 850 Sold at June 30, 1967, were 8 churches and 10 non-profit organizations. Deposits had been received on all but one church, the Grace Lutheran. Sale of this property is being negotiated. Three non-profit organizations with an appraised value of $11,450 have not as yet submitted good faith deposits to purchase. Redevelopment Tracts—24—appraised value $632,300 20 of these tracts appraised at $548,850 have been offered by competitive bid. Bid openings were held on November 14, 1966, and March 20, 1967. 14 of the 20 offered were sold for $266,380 at the first bid opening. Sales proceeds were $62,780 over the appraisal. The remaining 6 tracts were offered in March 1967, and 48 bids representing less than 60% of the appraised value, were received. All bids were rejected. The properties will be reoffered at a later date. Subject to review and adjustment. Lessees are entitled under Section 161e of the Atomic Energy Act of 1964 to apply for lease renegotiation based on inequity or undue hardship. These requests are received and acted upon by the Atomic Energy Commission. The renegotiated lease is then reviewed by appraisers and adjustment of appraisal, when needed, is made. Eighteen lessees have applied for renegotiation of lease. To date, AEC has completed six renegotiations which have resulted in a reduction of $97,500 in appraised values. Nine of the leased commercials have been sold to priority holders. Twenty-two remain in inventory and include parcel CG 45 Commercial Center, appraised at $1,951,856. The Center consists of 16 areas, 14 of which have governmentowned buildings and land and two are privately-owned buildings on land leased by the Government. A contract was entered into with Frederick M. Babcock and Company, 5201 Connecticut Avenue, N.W., Washington, D.C., to rework an appraisal dated December 22, 1965, of the Community Center giving effect to changes, new and cancelled leases on tenant spaces and ground leases during the period September 1, 1965, and June 30, 1967, together with zoning changes in Los Alamos County determinations affecting the parcel and any other conditions that may now exist. Unleased Thirteen of the unleased commercials having an appraised value of $1,581,900 were included in the competitive bid opened on November 14, 1966. Two of the properties were sold for $96,718 which was $19,487 more than the appraised value. The remaining 11 properties were reoffered in the March 20, 1967, bid sale. At this time, 59 bids were received on these properties and three were accepted in the amount of $428,076, some $9,000 under appraisal. 2 Two of the bids accepted were from the Los Alamos Developers, Inc., and have not been closed as yet. Extension of time to settle has been requested and granted with the receipt of an additional $10,000 deposit. Settlement of these properties has now been scheduled for August 24, 1967. The remaining unsold properties will be reoffered on a similar bid basis in the near future. The proposed offering of apartments in October 1966 was delayed as a result of widespread dissatisfaction among the residents of Los Alamos to provisions of Section 58 of the Atomic Energy Community Act of 1955, as amended, whereby priorities to purchase apartment buildings can only be granted to cooperatives. An ad hoc committee was appointed to make a careful study and analysis of the situation and make recommendations for further action. This committee met in Los Alamos December 12 and 13, 1966, to obtain background information and to inspect the community and vacant units of the various types of multiple family housing. On January 12, 1967, the committee held a public meeting to which all interested parties were invited. The committee report submitted on March 30, 1967, recommended a further amendment to the Atomic Energy Community Act and as a result HR 9199 and S 1623 were introduced to establish a revised program for the priority sale of apartment houses at Los Alamos, New Mexico. Hearings on these bills were held by the Subcommittee on Communities of the Joint Committee on Atomic Energy at Los Alamos, New Mexico, and early passage of this amendment is anticipated. It is estimated that all of the apartments will be sold by the end of fiscal year 1969. Community Disposal Operations Fund Section 117a of the Atomic Energy Community Act of 1955, as amended, established the Community Disposal Operations Fund to be credited with all proceeds of sales and income and to pay all necessary costs and expenses incident to the sale of these properties. All resources determined to be in excess of requirements are annually paid as liquidating dividends to the Treasury. Liquidating dividends totalling $64 million have been paid into the Treasury by June 30, 1967. Net assets of the fund on June 30, 1967, total $12.1 million of which $1.2 million represents cash and $10.9 million represents a mortgage portfolio of 1,056 mortgages acquired from the sale of properties. 998 mortgages are FHA insured with interest rates varying from 54% to 6%. 58 mortgages are conventional mortgages bearing 6% interest acquired on the sale of commercial properties. As the mortgage market permits, these mortgages will be packaged and sold as provided in Section 62d of the Act. To date, 5,099 mortgages with a book value of $25.5 million have been sold by competitive bid at various times. Proceeds in excess of book value of some $300 thousand have been credited to the disposal fund. APPENDIX 20 AEC LETTER TRANSMITTING PROPOSED LEGISLATION TO AUTHORIZE TRANSFER OF ADDITIONAL URANIUM 235 TO EURATOM (SEPTEMBER 28, 1967) Hon. HUBERT H. HUMPHREY, U.S. ATOMIC ENERGY COMMISSION, DEAR MR. PRESIDENT: There is transmitted herewith a Commission proposal in the form of a draft bill to amend the EURATOM Cooperation Act of 1958, as amended. The proposed legislation is attached as Appendix A; an analysis of the legislation is attached as Appendix B; and a comparative bill is attached as Appendix C. This proposal is related to two other proposed amendments to the EURATOM Cooperation Act concerning which hearings were held on August 15 and 24, 1967 by the Joint Committee on Atomic Energy. One proposed amendment, included in Sec. 5 of H.R. 10627 and S. 1901, the Commission's omnibus legislation for 1968, would permit the performance of toll enrichment services for the European Atomic Energy Community. The other, which would increase the quantity of plutonium which may be transferred to the European Atomic Energy Community, was transmitted to you in a letter from Chairman Seaborg dated August 22, 1967. It was not feasible to submit the present proposal in time to be considered at the hearing of August 24, 1967. As we recommended in the case of the plutonium proposal in Chairman Seaborg's letter, we recommend that this new proposal be considered as an amendment to Sec. 5 of H.R. 10627 and S. 1901. Specifically, the proposed legislation would amend the EURATOM Cooperation Act of 1958, as amended, to increase the quantity of contained uranium 235 which may be transferred to the European Atomic Energy Community from seventy thousand kilograms to two hundred fifteen thousand kilograms. The prosposed legislation could result in substantial increases in revenues. It is anticipated that the additional one hundred forty-five thousand kilograms of contained uranium 235 would be transferred to Euratom under uranium enrichment services contracts rather than by sale or lease. Assuming that the entire additional quantity is to be transferred under such contracts, the revenues to the United States would be approximately $500,000,000. Enactment of the proposed legislation is not anticipated to result in additional man-years of employment during the first five years following its passage. The Bureau of the Budget has advised that it has no objection to the Commission submitting the proposed bill for consideration by the Congress. Cordially, W. E. JOHNSON, Acting Chairman. APPENDIX A A BILL To amend the EURATOM Cooperation Act of 1958, as amended Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 5 of the EURATOM Cooperation Act of 1958, as amended, is amended by deleting the word "Seventy" and substituting therefor the words "Two hundred fifteen". APPENDIX B ANALYSIS OF DRAFT BILL TO AMEND THE EURATOM COOPERATION ACT Section 5 of the EURATOM Cooperation Act of 1958, as amended, presently authorizes the Commission to transfer 70,000 kilograms of contained uranium 235 under the U.S.-Euratom Agreement for Cooperation. The proposed amendment to Section 5 authorizes the Commission to transfer an additional 145,000 kilograms of contained uranium 235 or a total of 215,000 kilograms. Section 54 of the Atomic Energy Act of 1954, as amended, requires specific authorization by the Congress of the amount of special nuclear material which may be distributed to a group of nations. The initial amount authorized in 1958 was 30,000 kilograms of contained uranium 235 for use in the U.S.-Euratom Joint Reactor and Research and Development Programs which were established and were to be carried out in accordance with the provisions of an agreement for cooperation (Joint Program Agreement) entered into with Euratom pursuant to the provisions of Section 123 of the Atomic Energy Act, as amended. When it became apparent that programs within the Community that were not covered by the Joint Program Agreement would require special nuclear material, an Additional Agreement for Cooperation was concluded with Euratom in 1960. However, the net amount of uranium 235 to be transferred under the Additional Agreement was to be charged against the net amount of 30,000 kilograms of uranium 235 available under Article III of the 1958 Agreement for Cooperation, since the Joint Program uranium 235 requirements were not as great as had been expected. In 1964, as a result of increased enriched uranium requirements in the European Community, the uranium 235 ceiling of the EURATOM Cooperation Act was increased from 30,000 kilograms to the present ceiling of 70,000 kilograms. This additional 40,000 kilograms of uranium 235 was to be used for applications undertaken pursuant to the Additional Agreement for Cooperation. A recent survey of Community uranium 235 needs for Community projects indicates that the current ceiling of 70,000 kilograms will not be sufficient to meet the relatively near-term requirements. This deficiency is due principally to the increase in long-term fuel requirements for nuclear power plants which are in operation, under construction, and in planning in the Community. As in the United States, but not yet to such a dramatic extent, the Community is experiencing a substantial growth in the use of nuclear power. Of the 70,000 kilograms of uranium 235 now authorized for transfer to Euratom, about 45,000 kilograms have been allocated for specific projects and applications. This leaves only 25,000 kilograms (1 (the approximate amount required over 30 years for two 600 MWe reactors) for several power projects from which requests for enriched uranium fuel assurances are expected soon. To be able to provide such assurances promptly is conducive to the selection of enriched uranium power reactors thereby having a favorable impact on the overseas market for U.S. nuclear goods and services with a resultant increase in revenues to industry and the government. The U.S. foreign policy objectives on nonproliferation of nuclear weapons potential is also enhanced. An analysis by Euratom and the AEC of the Community's enriched uranium needs reveals that a total of about 200,000 kilograms of uranium 235 will be necessary to fuel, over the term of the Additional Agreement for Cooperation (1995), an installed capacity of 13,000 MWe. This is the amount of nuclear capacity that the Community expects to have in operation or under construction by 1972. In addition, the Community anticipates a need for about 10,000 kilograms to support its projected research and development activities and an average uranium 235 inventory of 5,000 kilograms for "third-country" services (i.e., fuel fabrication and chemical reprocessing services performed for groups outside the Community which involve U.S.-origin enriched uranium). Performance of such services are permitted under the U.S.-Euratom Agreement for Cooperation. These various actual and projected needs result in an overall total uranium 235 requirement through 1972-73 of 215,000 kilograms, or an increase of 145,000 kilograms in the present ceiling of the EURATOM Cooperation Act. The Commission's consideration of this matter included the following factors: 1. The Community represents a significant market for U.S. nuclear goods and services. (Seventy-five percent of all uranium 235 distributed abroad to date has gone to the Community.) An important factor in persuading Com |