Mr. SHAFER. Correct. Senator METCALF. Are there any other Federal agencies, other than those two you have named, that have this ability to give excess property to grantees? Mr. SHAFER. Oh, yes; any of the Federal agencies that have grantees would be included. Senator METCALF. There would be no limitation here to the Department of Agriculture and to the National Science Foundation? Mr. SHAFER. No such limitation. Senator METCALF. One such agency which comes to mind is the Department of Interior. Mr. SHAFER. The Department of Defense. Senator METCALF. The Commerce Department also and this would be applicable to all of those Federal agencies that make grants, that are not part of their internal operations, and then there would be a charge of 25 percent. Mr. SHAFER. That is correct. Senator METCALF. And then the property would be declared surplus after it had gone through this whole excess property procedure, and then it would be donated to the States, and there would be no charge of 25 percent or anything else? Mr.SHAFER. That is correct, there would be no charge to the States for the property, per se. Senator METCALF. So that in addition to the new charge of 25 percent to be deducted from the grant, it only applies to this property that is excess, and is picked up by a Federal agency in order to contribute to its grantees? Mr. SHAFER. Yes, sir, that is correct. Senator METCALF. I just wanted to make those three stages clear in my own mind and clear for the record. Mr. SHAFER. One addition I would make to the statement is that at the present time, the regional commissions are on the same level as the Federal agencies for excess property, and under the act, the regional commissions would have to go to the State agencies for excess property. Senator METCALF. I think it is important to bring that out, that the regional commissions, you say 32 States belong, and the previous witness said 33. Mr. SHAFER. Thirty-three, one State was added just recently and I learned about it yesterday. Senator METCALF. There are some that are not participating in the regional commissions, and, therefore, are denied the opportunity to participate in surplus property at that level? Mr. SHAFER. At that level it would be excess, you are correct. Senator METCALF. And that is excess property, that had never passed into the surplus property category? Mr. SHAFER. That is correct. Senator METCALF. Thank you very much. Thank you for an excellent statement. Senator NUNN. Thank you, Mr. Shafer, and also to your associates. We appreciate your help. Mr. SHAFER. Thank you, Mr. Chairman. Senator NUNN. Our next witness this morning is Mr. John Eden, Assistant Secretary of Commerce for Economic Development, of the Department of Commerce. Mr. Eden, would you care to introduce your associates? TESTIMONY OF JOHN EDEN, ASSISTANT SECRETARY OF COMMERCE FOR ECONOMIC DEVELOPMENT, DEPARTMENT OF COMMERCE, ON H.R. 14451 Mr. EDEN. Thank you very much, Mr. Chairman. On my left is Mr. George Milner, the Deputy Director of the Office of Regional Economic Coordination of the Department of Commerce, and on my right is Mr. William Clinger, who is the Chief Counsel of the Economic Development Administration. Senator NUNN. Fine. You may proceed with your statement. Mr. EDEN. Mr. Chairman and members of the committee, I would like to thank the members of the committee for providing me with the opportunity to present the views of the Department on H.R. 14451. My remarks this morning will relate to both the title V regional commissions and the Economic Development Administration which I have responsibility for and which are the two areas of the Department most concerned with the subject matter of this legislation. The bill would amend the Federal Property and Administrative. Services Act of 1949 by placing State surplus property agencies in charge of the distribution of surplus property and by increasing the range of eligible recipients, as well as broadening the categories of use of such property. Furthermore, the bill will lessen considerably the extent to which Federal agencies utilize excess property as a tool to provide additional needed support for various financial assistance programs. The Department of Commerce generally supports the purpose of the act which is to provide an effective and efficient program for the disposal of unneeded Federal personal property. Likewise, we generally support those provisions which expand the range of eligible recipients to encompass entities such as Indian tribes, local governments and economic development districts. Regional commissions and EDA have had no concern with surplus property in the past. Expansion of the permissible uses of surplus property to include such public purposes as economic development, public safety, and recreation is also considered by us to be a positive step in making available unneeded Federal property to the public bodies which established the greatest need for such property. Senator NUNN. You are saying EDA, and the commissions have had no involvement with surplus properties, you are distinguishing that from excess property? Mr. EDEN. Yes, sir. Both of our programs deal with excess property. On the other hand, EDA's excess property program has been utilized as a vehicle to provide certain grantees economic development districts, and, therefore, their component local units of government, and Indian tribes-with Federal excess property for use in their economic development efforts. Our present program permits EDA to use this excess property in the communities, States, and counties which are most in need of such assistance. These communities have limited finances and resources. We strive to utilize every available tool to provide help to these communities and help insure the most effective and efficient utilization of the property. The provision in section 3 of this bill requires the sponsoring Federal agency to pay an amount equal to 25 percent of the original acquisition cost of the excess property furnished to a grantee. There appears to be a legal question whether funds appropriated to EDA may be utilized for this purpose. And we would need to examine the desirability of using available grant funds for this purpose. The proposed surplus property program will not serve as a substitute for EDA's excess property program. We recognize, however, that EDA grantees will be eligible recipients of surplus property under the provision of H.R. 14451. Thus, they will be able to compete on the basis of need and utilization with other State and local programs for the available surplus property. While this will not afford EDA grantees the provision they now enjoy we believe it would assure that all public needs are equally considered for Federal property. We have instituted various controls of excess property, ranging from computer data to periodic inspections. Our program also relies on local initiative in augmenting these controls. Of the approximately 145 districts eligible to receive excess property-that is, all of the districts which have EDA planning grantsapproximately 30 are thus far taking advantage of the program. This represents approximately 27 percent of those districts eligible during the first year of our revised programs' operation. Property acquired to date has a total value of $9,138,000. If the average level of acquistion remains the same, about $22 million in excess property will be put to work in these districts which represent about one-third of all counties in the United States. The EDA grantees have used the excess property program in a variety of situations. For example, the program has provided in the Northwest Arkansas District, heavy road building and maintenance equipment to maintain secondary and tertiary county roads which have a low priority for State maintenance; a fire truck for Montrose, Colo., which never had one before; and over $800,000 in excess property for the Navajo Tribe in Arizona for a wide variety of uses. As Acting Special Assistant to the Secretary for Regional Economic Coordination, I am responsible for carrying out the Secretary's operational responsibilities with respect to the Federal cochairmen of the Regional Action Planning Commissions which have been established under title V of the Public Works and Economic Development Act. To date seven such Commissions have been established, and they cover all or parts of 32 States. Among the provisions of title V is section 514 which authorities a "Regional Excess Property Program." The Congress added that section to title V by Publc Law 93-423, approved September 27, 1974. Section 514 authorizes the Federal cochairman of title V regional commissions on an equal basis with other Federal agencies to acquire excess personal property from the General Services Administration and to dispose of it without reimbursement for economic development purposes to a variety of State and local, Indian, and certain nonprofit recipients within their respective regions. The Federal cochairmen are authorized by the statute to lend the property or to transfer its title to eligible recipients. During the year and a half that the program has been in operation, we have found that the property has been valuable in supporting economic development and that the program has been very popular among the Governors and States in the title V regions. I recently had a management review made of the program with on-the-ground checks made in each region. We found that in nearly every instance there is a great need for the property received, particularly in the many smaller towns and communities with insufficient tax base. Despite the popularity of the program and the good use to which the property has been put, the Administration believes that it is not an appropriate program for regional action planning commissions. The commissions have a primary responsibility for multistate economic development. They are not equipped and were not originally designed to be property management agencies in the sense that the General Services Administration is a property management agency. We believe that this expanded surplus property authority proposed in the bill approaches that kind of authority which the Congress provided the Federal cochairman in enacting section 514. With this expanded authority handled by the General Services Administration, the Federal agency which is generally charged with and is experienced in property management, the justification for regional commission involvement is diminished. Accordingly, it is the Administration's position that section 514 of the Public Works and Economic Development Act should be repealed as provided in section 6 of H.R. 14451. Thank you. This concludes my statement I shall be happy to try to answer any questions. Senator NUNN. Thank you. Mr. Eden, has your statement been cleared with the Office of Management and Budget? Mr. EDEN. Yes, sir, it has. Senator NUNN. Were any changes made in that revision? Mr. EDEN. There were two portions added which I can read to you. On page 3 of the statement, the second sentence which reads: "And we would need to examine the desirability of using available grant funds for this purpose." That was added, and, second, the following sentence: "We recognize, however, that EDA grantees will be eligible recipients of surplus property under the provision of H.R. 14451. Thus, they will be able to compete on the basis of need and utilization with other State and local programs for the available surplus property. While this will not afford EDA grantees the provision they now enjoy, we believe it would assure that all public needs are equally considered for Federal property." Senator NUNN. Those two sentences were added-there was nothing deleted? Mr. EDEN. That is correct. Senator NUNN. I notice you say through here we, we, we-and then you get over on to page 5 and you say the administration. I am not attaching any significance to it, but I would like to know why. Mr. EDEN. I was striving in the early part of the testimony to describe the actual operations of the program and its resulting activities. Senator NUNN. Does the Commerce Department, then, in your division of it, endorse this bill? Mr. EDEN. Yes, sir, we do. Senator NUNN. Senator Metcalf? Senator NUNN. I have a couple more questions here. How much of the Nation geographically is now included in excess property programs operated by the Department of Commerce? Mr. EDEN. Thirty-three States, Mr. Chairman, are included in the Regional commission excess property program, and within EDA, 145 districts are included. I will have to verify for you specifically those 145 that are not included in the title V regions. I will get a rundown on that, and provide that for you, Mr. Chairman. Senator NUNN. For instance, in my own State, in the State of Georgia, which I am more familiar with, we have some situations in which some of our counties are in the Coastal Plain Regional Commission, and some are not. Some are in the Appalachian Regional Commission, which is not eligible to participate. Do you have any breakdown of Georgia counties within the Coastal Plains region? Mr. EDEN. All of the countries included in the Coastal Plain region are included in these programs, and not those counties in the Appalachian region. Senator NUNN. Why is the Appalachian Regional Commission not eligible? Mr. EDEN. I am not familiar with the background on that. I am told that the amendment is to title V, which covers only the title V Coastal Plains, and the six other Regional Commissions. Appalachia is in a separate status, and Congress did not amend its legislation or extend the section 514 program to the Appalachian Regional Commission. Senator NUNN. You do not know the rational reason? It is just not a part of the law? Mr. EDEN. That is correct. |