ASSISTANCE TO PUBLIC FACILITIES

SEC. 9. (a) The Administrator, in consultation with the members of the Advisory Committee, shall conduct continuing studies of needs throughout de pressed areas for useful public facilities, with a view to determining each of the various types of public facilities needed, the probable cost of construction of each such facility, and the estimated number of jobs which would be provided in and near such depressed area by the construction of each such public facility. (b) (1) The Administrator is authorized to receive proposals from States, Territories, possessions, political subdivisions of States (including municipalities), and private or public organizations and associations relating to works of public facilities construction. Such proposals shall contain plans showing the work proposed to be performed, and the cost thereof, and shall contain proposals for contributions to the cost thereof by the entity making the proposal, proportioned to its ability to pay such contributions. The Administrator, in consultation with the entity which makes a proposal, is authorized to modify all or any part of such proposal.

(2) The Administrator shall periodically review proposals received under this subsection, and shall adopt such proposals as, in his view, will substantially aid in carrying out the purposes of this Act.

(c) The Administrator, after consultation with the entity of entities most directly affected, is authorized to initiate programs of public facilities construction without the necessity for proposals therefor having been made under subsection (b).

(d) The Administrator shall select projects to be constructed under this section on the basis of the degree to which the construction of such project will result in the most effective and economic alleviation of unemployment within the depressed area wherein such project is to be constructed.

(e) (1) The Administrator shall assist, by making grants or loans, in the construction of any project selected for construction by him as the result of the submission of a proposal provided for in subsection (b), but he shall not make any loan or grant to assist in the construction of any project with respect to which a grant or loan under any other Federal program or State programs partially financed by Federal grants is, or upon application therefor would be, obtainable.

(2) In the case of any project which is in a category of projects with respect to the construction of which assistance, by means of grants or loans, is provided under another Federal program or State program partially financed by Federal grants, but which is not eligible for such assistance, or for which such assistance cannot be obtained, the Administrator shall, in determining the amount and conditions under which a grant or loan will be made under this subsection, be governed by the amounts and conditions of the grants or loans provided for by such Federal or State program.

(f) The Administrator is authorized to proceed with the construction of any project initiated by him under subsection (c) without any requirement of local contributions toward the construction of such project.

(g) The Administrator shall provide by regulations for the supervision of construction conducted under this section to insure that Federal funds are not wasted or dissipated.

(h) Not more than $100,000,000 of the funds authorized to be raised under section 10 of this Act shall be available for the purpose of carrying out the provisions of this section.

FUNDS

SEC. 10. To obtain funds for grants and loans under this Act, the Administrator may, with the approval of the President, issue and have outstanding at any one time notes and obligations for purchase by the Secretary of the Treasury in an amount not to exceed $200,000,000. Such notes or other obligations shall be in such forms and denominations, have such maturities, and be subject to such terms and conditions as may be prescribed by such officer or agency, with the approval of the Secretary of the Treasury. Such notes or other obligations shall bear interest at a rate determined by the Secretary of the Treasury, taking into consideration the current average rate on outstanding marketable obligations of the United States as of the last day of the month preceding the issuance of such notes or other obligations. The Secretary of the Treasury is authorized and directed to purchase any notes and other obligations issued under this section and for such purpose is authorized to use as a public debt transaction the proceeds from the sale of any securities issued under the Second

Liberty Bond Act, as amended, and the purposes for which securities may be issued under such Act, as amended, are extended to include any purchases of such notes and other obligations. The Secretary of the Treasury may at any time sell any of the notes or other obligations acquired by him under this section. All redemptions, purchases, and sales by the Secretary of the Treasury of such notes or other obligations shall be treated in every respect as public debt transactions of the United States.

PROCUREMENT

SEC. 11. (a) Each department, agency, or other instrumentality of the Federal Government engaged in the procurement of any supplies or services for use by or on behalf of the United States shall, to the maximum practicable extent, procure such supplies or services from contractors in depressed areas or from contractors who in furnishing the same will undertake to provide for the employment of additional individuals in depressed areas.

(b) The Administrator shall furnish all departments, agencies, and instrumentalities of the Federal Government with a list of areas which he has designated as depressed areas under this Act together with a list of the services and supplies which are most abundantly available in each of such areas.

INFORMATION

SEC. 12. The Administrator shall aid depressed areas by furnishing to interested individuals, communities, industries, and enterprises within such areas any assistance, technical information, market research, or other forms of assistance, information or advice which is obtainable from the various departments, agencies, and instrumentalities of the Federal Government and which would be useful in alleviating conditions of excessive unemployment within such areas.

POWERS OF ADMINISTRATOR

SEC. 13. For the purposes of performing his duties, the Administrator is authorized to

(a) hold such hearings, to sit and act at such times and places, and to take such testimony, as the Administrator may deem advisable;

(b) secure directly from any executive department, bureau, agency, board, commission, office, independent establishment, or instrumenality information, suggestions, estimates, and statistics needed to carry out the purposes of this section; and each department, bureau, agency, board, commission, office, establishment, or instrumentality is authorized and directed to furnish such information, suggestions, estimates, and statistics directly to the

Administrator;

(c) require by subpena or otherwise the attendance of witnesses and the production of books, papers, and documents, to administer oaths, to take testimony, to have printing and binding done; and to make such expenditures as he deems advisable within the amount appropriated therefor. The Administrator may administer oaths or affirmations to witnesses appearing before him. Subpenas shall be issued under the signature of the Administrator and shall be served by any person designated by him. The Administrator is authorized to exercise any of the powers conferred upon the Securities and Exchange Commission by subsection (c) of section 21 of the Securities and Exchange Act of 1934, and subsection (d) of such section shall be applicable to witnesses before the Administrator; and

(d) establish such rules, regulations, and procedures as may be appropriate to permit the Administrator to perform the functions prescribed in this Act.

TAX RELIEF

SEC. 14 (a) The first sentence of section 168 (e) (1) of the Internal Revenue Code of 1954 (relating to amortization of emergency facilities) is amended by striking out "has certified as necessary in the interest of national defense during the emergency period, and only such portion of such amount as such authority has certified as attributable to defense purposes" and inserting in lieu thereof "has certified as necessary in the interest of national defense or to relieve unemployment in areas designated as 'depressed areas' by the Administrator of the Depressed Areas Administration during the emergency period, and only such portion of such amount as such authority has certified as attributable to such purposes."

2. United States will pay additional period of 13 weeks beyond State benefit payments.

Surplus food

Commodity Credit Corporation to distribute processed food to homes and institutions.

Hon. LISTER HILL,

DEPARTMENT OF AGRICULTURE, Washington, D. C., January 23, 1956.

United States Senate.

Chairman, Committee on Labor and Public Welfare,

DEAR SENATOR HILL: In accordance with your request we have reviewed S. 2663, a bill to establish an effective program to alleviate conditions of excessive unemployment in certain economically depressed areas.

This bill proposes to establish a program to alleviate conditions of excessive unemployment in certain economically depressed areas by setting up a Depressed Areas Administration which shall make loans to assist in financing the construction of industrial plants, commercial facilities, or public facilities, to the extent of $200 million. Federal agencies are to procure supplies or services from contractors in depressed areas to the maximum practicable extent. Technical information, market research, etc., from Federal agencies shall be furnished to depressed areas by the Administrator. Special provisions are made for tax relief, vocational training, unemployment compensation, and surplus food supplies in depressed areas.

Section 17 of the bill relates to the distribution of surplus commodities and would provide authority to the Commodity Credit Corporation to underwrite the cost of processing price support food commodities into a form suitable for home and institutional use. With such authority, CCC inventories of wheat and corn could be processed into flour and meal, respectively, for distribution under the authority of sections 407 and 416 of the Agricultural Act of 1949, as amended. This bill aims at special industrial development programs to alleviate unemployment problems in depressed industrial areas. Depressed areas are defined in terms of the percentage of the labor force that is (totally) unemployed. In general, this would not cover areas of low farm income and rural underemployment where the problem is great and for which the Department has recommended a rural development program. Since this bill deals primarily with urban problems and has no explicit provisions for any rural development program, the programs proposed are in the field of responsibilities of agencies other than the Department of Agriculture. However, efforts to reduce unemployment in depressed industrial areas and to prevent the spreading of unemployment to still other areas are bound to have a supporting effect on consumer demand for food and other farm products. The Department of Agriculture supports the objectives of this bill, but has no comment on the specific measures proposed to handle problems of industrial unemployment. It is suggested that the area development program recommended by the President, although partially covered by S. 2663, would be more adequately met by enactment of S. 2892.

With respect to the provision relating to surplus food supplies, Public Law 311, 84th Congress, approved August 9, 1955, provides for the use of section 32 funds to make wheat flour and cornmeal available to needy persons, upon the request of the governor of any State, through the period June 30, 1957. There fore, this Department does not believe any further legislation on this matter is needed until such time as experience with the program under Public Law 311 indicates that change in the maximum amount or the program duration authorized by that law is warranted.

The Bureau of the Budget advises that there is no objection to the submission of this report.

Sincerely yours.

TRUE D. MORSE,
Acting Secretary.

Hon. LISTER HILL,

ATOMIC ENERGY COMMISSION, Washington, D. C., February 1, 1956.

Chairman, Committee on Labor and Public Welfare,

United States Senate.

DEAR SENATOR HILL: This is in response to your request for our comments on S. 2663, a bill to establish an effective program to alleviate conditions of excessive unemployment in certain economically depressed areas.

The proposed bill provides that the Congress finds and declares that the present existence of excessive unemployment in certain areas of the Nation is jeopardizing the health, standard of living, and general welfare of the Nation. The purpose of the bill is to provide assistance to communities, industries, enterprises, and individuals of depressed areas defined as areas where there has existed unemployment of not less than 9 percent of the labor force for 18 months or 6 percent of the labor force for 3 years. The bill would create a Depressed Areas Administration under the direction and control of an administrator, who, in carrying out his duties under the bill, would consult with an advisory committee composed of designated representatives of other Government agencies including the Chairman of the Atomic Energy Commission. The Administrator is authorized to make loans to assist in financing construction of industrial and commercial facilities in depressed areas. He is also authorized to construct or make grants or loans to assist in the construction of public facilities which he finds will result in the most effective and efficient alleviation of unemployment within depressed areas.

The bill provides additional relief to depressed areas by (a) requiring Government agencies, to the maximum extent practicable, to procure supplies and services in depressed areas; (b) making information, market research, and other advice obtainable from Government agencies available to depressed areas; (c) providing tax relief under section 168 (e) (1) of the Internal Revenue Code of 1954 to facilities constructed to relieve unemployment; (d) providing vocational training to residents of depressed areas and increased unemployment compensation to such vocational trainees; and (e) making surplus food supplies more readily available in depressed areas. The Administrator is authorized to obtain from any agency information, estimates, and statistics needed to carry out his duties.

As the Commission is not specially qualified to ascertain the extent of unemployment or to evaluate the effect of present unemployment on the general welfare or the need for the proposed legislation, our comments will be confined to the impact of enactment of the proposed bill on the Atomic Energy Commission. Under section 5 of the bill, the Administrator, in carrying out his duties under the bill, is required to consult with the advisory committee of which the Chairman of this Commission would be a member. This would seem to require the Chairman of this Commission to participate in (a) determinations of those areas qualifying as depressed areas under the bill; (b) disposition of loan applications for construction of industrial and commercial facilities; and (c) determination of needed public facilities in depressed areas. The responsibilities of the Chairman of the Commission under the Atomic Energy Act of 1954 are so extensive as to make it unlikely that he could find time to make a valuable contribution to the Depressed Areas Administration. Of course, even if the Chairman was not a member of the advisory committee, the Commission, on request of the Administrator, would provide such technical and other information in accordance with the terms of the Atomic Energy Act as the Administrator might consider desirable. In view of the availability of this information to the Administrator, it would seem unnecessary to designate the Chairman of the Commission as a member of the advisory committee.

While section 9 authorizes the Administrator to select public facilities for construction in depressed areas and authorizizes him to construct or make grants or loans for such construction, we assume that with respect to projects involving the application of atomic energy the Administrator's authority would not supersede the Commission's responsibilities under the Atomic Energy Act including its responsibility to protect public health and safety, license construction and operation of facilities and the use of special nuclear material, and safeguard restricted data.

In view of the foregoing, we consider the designation of the Chairman of the Atomic Energy Commission as a member of the advisory committee unnecessary. For the reasons indicated, we are unable to express a view as to the desirability of the proposed legislation.

The Nation as a whole is prosperous although some of our communities are faced with problems of substantial and persistent unemployment. This spotty unemployment results in hardships to many individuals and their families and has some impact on the national welfare because of the nonuse of vital human resources. From the scope of the problem, however, it appears that a program fashioned to meet the problem could and should be administered by an existing executive department or agency.

Neither the program of loans for industrial development, nor the "grant or loan" program for public facilities has, in the opinion of the Department of Commerce, adequate standards to govern its administration. A Federal program of loans specifically addressed to the problem of helping such areas help themselves is important, but it appears to the Department that the program proposed by S. 2892 is better fashioned to the problem here faced.

Because of the absence of standards, the proposed program of "grants or loans" for public facilities does not appear to be tailored to provide the sort of assistance which is apt, in the long run, to contribute materially to the economic stability of the areas. Unilateral action by the Federal Government seems to be invited by section 9 (c) authorizing the initiation of programs of construction of public facilities without awaiting proposals from States, subdivisions thereof, or private organizations associated with the affected areas. This is contrary to the principle which should, in our opinion, pervade the program-to help the areas help themselves.

In summary, therefore, it is urged that, although legislation for the general purpose of S. 2663 should be enacted, favorable action on S. 2892 should be taken by the Congress since the latter bill encompasses a program better fashioned to effect a long-term solution to the problem of substantial and persistent unemployment in the so-called depressed areas than is the program described by S. 2663.

The Bureau of the Budget has advised that it would interpose no objection to the submission of this report.

DEAR SENATOR HILL: This is in reply to your letter of July 30, 1955, in which you request a report of this agency on S. 2663, a bill to establish an effective program to alleviate conditions of excessive unemployment in certain economically depressed areas.

There can be little question that the avoidance of excessive unemployment is in the best interests of the United States or of the advantages of Federal assistance in areas of the country in which such a condition exists. As you are probably aware, some steps have already been taken in that direction in order to meet objectives of the present mobilization program. Preference in Government procurement for contractors in labor surplus areas is now being extended in appropriate cases and additional percentages of new capital investment are being certified for purposes of tax amortization to firms building or expanding defense facilities in such areas.

We do believe, however, that programs for unemployment assistance should be kept separate from those devoted to defense mobilization, both in authorization and in administration. In this connection, we would be opposed to section 14 of S. 2663 which would amend section 168 of the Internal Revenue Code by making relief of depressed areas a basis for granting tax amortization certificates. While we would not object to use of the tax amortization device to accomplish the objectives of the bill, we believe that if it is to be made available for that purpose it should be authorized by a separate section of the code and should be administered by the Depressed Areas Administrator.