you initiate administrative action against the landlord? Would you process a complaint from the white male? Do you interpret S. 506 as outlawing such practice by a landlord?

Answer No. 4: Assuming that the landlord was not acting in response to a finding of discrimination, HUD would initiate action or accept a charge alleging such facts. The Federal Fair Housing Law, as currently drawn and as proposed to be amended, makes any racial or sexual discrimination unlawful, regardless of whether the victim of discrimination is a member of the majority racial group. The Department has and will continue to recognize complaints received from all victims of discrimination.

Q. 5. Currently, HUD has the power only to encourage a conciliation between a landlord and a person claiming discrimination. If HUD were given the power to pursue these complaints administratively, with no power to initiate such complaints, would this give you a more effective tool to deal with such complaints than you now have? Please compare a cost estimate (rough figures only will be sufficient for an interim response) for HUD expenses comparing HUD simply following up complaints and HUD actually initiating them. This estimate should be a yearly cost. If HUD were not given the right to initiate claims, could you devise and effectuate a complaint process which would insure there were no barriers to access to the administrative process without involving HUD in the actual initiation of any such complaint?

Answer No. 5: The power to initiate charges in the Secretary is important, not because it would be used with great frequency, but because it would make it possible to end discrimination in those cases where no person willing to file a formal charge is present, but where indications of discrimination are apparent. The Department receives information regularly, for example, from real estate agents who personally favor the Fair Housing Act and wish to report apparent violations by fellow agents. Although these persons wish to see "something done," they are seldom willing to go on the record as charging parties; the Department believes it ought to have the power to act on complaint information, as well as on actual charges received.

HUD's policy is to make the complaint process known as widely as possible, and to encourage formal complaints when individuals report apparent violations of law. In circumstances wherein individuals with complaint information are unwilling to file a charge, our complaint process might not have any "barriers to access to the administrative process" but it would certainly have the current law's weakness-inability to act without the receipt of a personal complaint. The Department has testified that first-year costs for the enforcement program proposed in the Amendments Act would be approximately $2.6 million beyond the budget amounts currently proposed for the existing program. Most of these costs are for salaries and administrative expenses associated with the investigation, attempted conciliation, hearing and resolution of complaints. We do not believe the difference in the cost of the program would be significant, were the Department deprived of the power to initiate its own charges, because the loss of this power would not change our need for field staff both for investigation and hearing of charges and complaints. When individual victims of discrimination file charges, the Department regards their problems as of highest priority, and a large complaint load would demand a high proportion of our investigative

resources.

Senator HATCH. Our next witness will be Mr. Richard Kast of Glen Allen, Va. Mr. Kast is a State of Virginia housing commissioner. We are happy to welcome you and we look forward to hearing your testimony.

TESTIMONY OF RICHARD KAST, STATE HOUSING COMMISSION, STATE OF VIRGINIA, GLEN ALLEN, VA.

Mr. KAST. Thank you, Mr. Chairman.

I apologize for not having any written comments. I was asked to come and testify rather late in the week and I am happy to do so, and privileged to do so. I hope that my comments will be coherent enough that written comments will not be necessary.

Senator THURMOND. Speak a little louder. Pull the microphone a little closer to you. Speak right into it.

Mr. KAST. Does that help?

I am going to limit myself to the specific section of Senate bill 506 that most closely concerns me. I am an employee of the Virginia attorney general's office, and one of the capacities in which I serve in that position is as fair housing administrator to Virginia. The agency in Virginia which administers the Virginia fair housing law is the Virginia real estate commission and the real estate commision is the entity with which I work in fair housing.

Virginia has had for, I guess, a little over a year now, a substantial equivalency agreement with HUD. I think that from everything I have been hearing, the Virginia HUD substantial equivalency agreement is one of the better, more smoothly working agreements of that nature, and I would like to comment basically upon how that agreement has been working, how the two agencies are coordinating and how I feel that the suggested amendments of the Senate bill would impact upon that coordination. I will, of course, be happy to comment upon any other areas of the bill about which you would care to ask questions afterwards.

As I said, I would first like briefly to go through how our procedure works and how we cooperate with HUD under the substantial equivalency agreement. The Virginia fair housing law has been on the books since 1972 and I have been working with the attorney general's office in fair housing for about 111⁄2 years now. The substantial equivalency agreement with HUD came into being about the same time that I took the job. There was a lot of groundwork laid prior to that, but I am not really competent to testify to that, except to the extent that I know it was a long sought-after goal for the State of Virginia to have a substantial equivalency agreement with HUD.

We feel that it is working well. I will attempt to describe briefly just how it works. Presently we receive referrals of all fair housing complaints emanating from Virginia from the HUD regional office in Philadelphia. The present language of the Federal law is mandatory, where a State has been found to have a substantially equivalent fair housing law with the substantially equivalent remedies the referral process is mandatory. After we receive all of these referred complaints, we investigate them. The Virginia Real Estate Commission is located within the Virginia Department of Commerce, which is a large umbrella agency which has supervision over approximately 26 administrative boards. It is the enforcement section within the Department of Commerce which investigates fair housing complaints.

Senator THURMOND. Could I interrupt just a moment? I have got to leave. Can I just ask you this question? You are from the State Housing Commission of the State of Virginia?

Mr. KAST. Yes, sir.

Senator THURMOND. Do you favor this bill or are you opposed to it? Mr. KAST. I favor the bill overall. I have some quibbles with it and I will be happy to get to that.

Senator THURMOND. Are you going to point out your objections to the bill? Mr. KAST. Yes, sir.

Senator THURMOND. So it will be on the record here?

Mr. KAST. Yes, sir. I certainly am. If you have to leave shortly, let me do that now.

Senator THURMOND. I have another engagement. I have to leave. I will read your testimony later.

Mr. KAST. Certainly.

Senator THURMOND. Thank you.

Mr. KAST. AS I indicated, we presently receive the complaints from HUD on a routine basis. As I understand this bill, that language would be changed and HUD would be given discretion as to whether or not to refer. I understand that there is some talk of perhaps changing that language back to the original mandatory language that is in the present Federal law. I would support that. It is my feeling that the time at which the scrutiny should be exerted as to whether a State is doing its job is prior to the substantial equivalency decision being made. Once the decision is made that a State has a substantially equivalent law that affords relief that is basically the same as to what the Federal Government has to offer, I feel the decision to refer should be a mandatory one and not discretionary.

I also question the validity of the section of the subject bill which would make every referral decision subject to the approval of the complainant. While this may be philosophically a very admirable goal, from a practical standpoint I can foresee where it would result in unnecessary delay. Each complainant would have to be informed thoroughly as to the advantages and disadvantages of referral if this provision were to be meaningful.

This could result, as I noted, in substantial delay. In the average fair housing complaint delay is the one thing that you can't tolerate. Typically it involves a house or apartment that will be available for a short period of time. Any delay can be very damaging from the standpoint of meaningful relief being available at such time as there has been a determination of a violation.

So, I would feel that the provision of this bill which would require the complainant to approve the referral would not be advisable.

There is one more point I would like to make with reference to this bill. As I noted, in Virginia we have been working with HUD for about 111⁄2 years now. We have achieved what I feel is a very smooth operation. Cooperation between the two agencies has been quite good. I feel therefore that the recall provision in the present law creates no problems, and do not favor its removal by the present bill.

It is sometimes frustrating to have a complaint recalled that you have investigated, found a violation and negotiated 90 percent of your relief. But I think that is the exception rather than the rule. Overall, I feel that the recall process is valuable because it gives us a little bit more clout than perhaps we otherwise would have. I believe that a respondent may feel more inclined to enter into a voluntary conciliation agreement with the Virginia Real Estate Commission if he feels that the entire process will just be initiated again at the Federal level at such time as the case has been recalled. I, therefore, would favor reinstating in the bill the provision that is in the present Federal law which gives HUD the capacity to recall cases. I would especially favor this if referral is mandatory and not subject to the complainant's approval, both of which I've noted I favor.

Those are the basic comments that I have on the section of the bill that deals most specifically with Virginia's involvement with the Federal law. I will conclude with one last comment which may be instructive in understanding how the Virginia law differs from the Federal law.

We are, as I have stated, substantially in conformance with the Federal law in many ways. The major difference is that the Virginia Real Estate Commission which administers the Virginia law is also the agency in Virginia that licenses real estate salesmen, brokers, and rental location agencies. As such the commission has the power to revoke or suspend those licenses for a number of offenses including a fair housing violation. Typically, in a fair housing case in which we have reasonable cause to feel that there has been a violation and attempt to conciliate it voluntarily, we may succeed with this conciliation with a licensee because the next step would be to schedule a license revocation or suspension hearing on the fair housing violation.

This is an additional aspect of the commission's power that does not exist at the Federal level. It is a significant aspect because it gives us additional clout. This is true even though I would say that the complaints that involve licensees are probably the minority. Rather most involve individual owners or landlords who are not licensed. But in the cases where licensees are involved, the commission's administration and enforcement of the law is a significant factor, I think, in our ability to get voluntary settlements.

I will now be happy to answer any specific questions as to other sections of the law about which I have not commented. I do have occasion to deal with the Virginia and Federal laws in other capacities other than the sections dealing with the referral mechanism. I have limited my remarks to that section because I think that it is the most significant from the standpoint of the changes that have been suggested here to the State of Virginia.

Senator HATCH. Thank you, Mr. Kast. Do you believe that the State of Virginia has the financial resources to administer title VIII with respect to violations occurring within your State?

Mr. KAST. I believe that probably the State does. We have experienced a phenomenon recently that I cannot explain, and HUD cannot explain, and I do not know if it is nationwide or just limited to Virginia and the area that the HUD regional office in Philadelphia administers. But, we have seen a falling off of fair housing complaints being filed, and not just over 1 or 2 months, but a significant falling off over the last several months to 1 year. When I started as Fair Housing Administrator about 12 years ago, we had probably twice the complaints that we have now. So, I mention that only to say that we are not having any problem administering and investigating the fair housing complaints now because of the fact that we are not getting as many as we were. When we were getting more it was more difficult. And, of course, there is the fiscal aspect to your question, an aspect which is significant in Virginia as it is in all the States. How many invesigators you can hire, how many investigators you can assign to fair housing, is determined by financial limitations. But to answer your question, we have not had any problem so far.

Senator HATCH. I have to go and testify before a finance committee hearing on taxation. So I am happy to have Senator Simpson here and I am sure he has some questions for you.

Thank you so much. I appreciate having you.
Senator SIMPSON [presiding]. Thank you.

Mr. Kast, welcome to the committee hearing, and thank you for coming to testify. I appreciate that very much.

I have a couple of questions.

Would you please briefly describe the procedures your agency follows in obtaining HUD certification?

Mr. KAST. I will do so to the best of my ability. As I mentioned earlier, I was not in the office when the negotiations were ongoing as to Virginia getting the substantial equivalency agreement. I came into the office at about the same time it was finally signed by all of the parties. So, I cannot say exactly what was involved. I believe, in general terms, it involved a process whereby Virginia demonstrated to the satisfaction of HUD that the Virginia law was substantially equivalent in all significant ways, that it proscribed the same categories of discrimination, that it afforded generally the same types of relief, and that while it was different in small ways, it was substantially the same. That was demonstrated to the satisfaction of HUD.

Senator SIMPSON. Could you describe a typical type of case which your agency might receive or have referred from HUD?

Mr. KAST. I would be happy to describe a hypothetical. I am not sure that there is a typical fair housing case. But there are certain patterns of behavior that we tend to see. I think the significant thing about housing discrimination is that it is becoming a process that is much more sophisticated in its practice, and therefore much more difficult to document and prove. The days are gone, I believe-with the exception perhaps of some rural backwaters where they are not really aware of what the law states-when someone is told I won't sell you this house or I won't rent you this apartment because you are black or because you are a woman. More often we see patterns of behavior in which the discrimination is clouded by legitimate types of discrimination, which is, I will not rent you the apartment because you can't afford it or your credit is bad or some other type of legitimate consideration.

We have to therefore, of course, go out and attempt to prove whether or not the stated reason for their being refused the apartment, house, et cetera, is the reason for which they were in fact refused.

Senator Simpson. If the complaining persons are given a choice between the Federal or a State remedy, how many do you believe would select the State remedy?

Mr. KAST. It is hard to say. As I stated earlier, for the complainants ability to review and approve a referral to be meaningful, that approval would have to be knowledgeable approval. I don't think that the average complainant probably knows what particular advantages the Federal law might offer to the State or vice versa, without being so informed. There are not a whole lot of differences. I think, obviously, in Virginia's particular situation, if the complainant involved the real estate licensee, it might be better to proceed within the Virginia investigative system and have that additional sanction or addi