Loan activities.

Executive direction

Directs the overall program including development of program policies, direction of all program and administrative activities of the administration, insuring Federal program coordination through the Area Assistance Advisory Board, and the like.

Administrative, legal and accounting

Managerial functions, including organizational planning and methods and procedures analyses; administrative servicing; legal services, including a general counsel and staff; and budgetary control and accounting services, including a comptroller and staff.

Loan activities

Process loan applications, make necessary investigations and carry out accounting and other details involved in the loan program.

Economic development and area research staff

Develop area aids and studies for field staff. Studies of industrial location advantages of labors surplus areas, successful community experiences in industrial financing, new technology available from Government research of use to labor surplus area firms, and Federal programs useful in local development.

Field operations staff

Counsel community and area development groups on such matters as industrial surveys, industrial districts, methods of financing industrial growth, growth industries, how to establish small industries, and similar matters.

All nonpersonal services expenditures

Estimate covers all costs of operation except compensation as such, including lease or rental of office space if required, purchase of furniture and other office equipment and office machines, payment of utility bills, travel and transportation of persons and things, procurement of program equipment of all kinds, etc.

Senator DOUGLAS. I may say that the staff is preparing a detailed analysis of S. 964 and S. 1433, which, of course, will be submitted to the sponsors of this legislation, to see if it is satisfactory.

If this analysis is declared satisfactory by the sponsors, but only if so, this also will be inserted in the record at this point. (The analysis referred to follows:)

Comparison of principal provisions in area redevelopment bills

Subject

Organization.....

Definition of areas...

Creates Area Redevelopment Administra-Assigns operating responsibility to
tion as separate agency (sec. 3).
the Department of Commerce
(sec. 101).
Creates Government
Board (sec. 112).

Creates Government Advisory Committee
and National Public Advisory Committee
(sec. 4).
Industrial redevelopment areas are those
determined by Administrator as having
had "substantial and persistent unem-
ployment for an extended period of time.'
Areas so designated shall include those
where unemployment has been:

(1) 12 percent for preceding 12 months.
(2) 8 percent for 15 of preceding 18
months.

(3) 6 percent for 8 months in each of

2 preceding years.

An area may be 1 or more counties or mu-
nicipalities, or a part of a county or mu-
nicipality (sec. 5 (e)).

Rural redevelopment areas are those which
have the largest number and percentage of
low income families, and a condition of
substantial and persistent unemployment
or underemployment (sec. 5).

Advisory

Upon request of appropriate State
government the Secretary of
Labor shall certify labor market
areas where unemployment:
(1) has been 8 percent for the
major portion of each o
preceding 2 years, or,
(2) if no historical labor force
data has been compiled,
is shown by a current
survey of available data
to meet specifications of
(1) above.

(Sec. 102 (a)).
The Secretary of Commerce may
assist rural areas in their efforts
to develop manufacturing, proc-
essing and service activities (sec.
101 (b) (1)).

Comparison of principal provisions in area redevelopment bills-Continued

Subject

Local committees...

Loans.

8. 964 (Douglas et al.)

Administration appoints a local redevelop-
ment committee of at least 7 residents in
area representative of labor, commercial,
industrial and agricultural groups and the
public, including members of existing re-
development committee (sec. 6 (a)).
Committee prepares plans for economic re-
development (sec. 6 (a)).

Loans for public facilities.

Regional committees may be appointed on
the same basis for 2 or more areas (sec. 6
(b)). $1.5 million of funds available for
administrative expenses of local and re-
gional committees (sec. 6 (c)).
a. Upon application approved by the local
committees. May make loans to as-
sist in financing (1) purchase or devel-
opment of land for industrial use; (2)
construction, rehabilitation or altera-
tion of industrial, commercial, or proc-
essing plants or facilities and (3)
purchase of machinery or equipment.
If he finds that-

(1) The project is reasonably calculated
to alleviate, more than temporar-
ily, unemployment or underem-
ployment;

(2) Funds requested are not otherwise
available on reasonable terms;
(3) The amount of the loan plus other
available funds are adequate; and
(4) The borrower will not cause a reloca-
tion of business operations conduc-
ted by him so as to effect a signifi-
cant reduction in employment
elsewhere in United States.

(5) There is a reasonable expectation of
repayment.

b. No loan shall exceed 75 percent or 40
years. The interest rate shall be 12
percent more than the administration
pays to the Treasury (sec. 7 (b)).
c. 10 percent to 25 percent shall be supplied
by the State or political subdivision or
by local private sources as loan or equity
capital. Federal loan is 1st lien. Not
less than 5 percent must be from non-
governmental sources. Local financial
conditions and per capita income to be
considered in determining amount of
local participation (sec. 7 (c)).

*Sprin

S. 1433, administration bill

Secretary may make loans for land
and buildings but not for machin-
ery or equipment (sec. 107 (a)).
Financial assistance shall not be
used to assist relocations where
such assistance will result in
substantial detriment to the area
of original location (sec. 107 (3)).
Loans outstanding at any time
shall not exceed $50,000,000 (sec.
107 (b) (1)).
Persons assisted must be approved
by the State or an agency or
instrumentality thereof concerned
with economic development (sec.
107 (b) (2)).

(1) The project will alleviate, more than
temporarily, unemployment or
underemployment and will tend
to improve industrial opportuni-
ties;

(2) Funds requested are not otherwise
available on reasonable terms;
(3) The amount of the loan plus other
available funds are adequate; and
(4) There is a reasonable expectation of
repayment (sec. 8 (a)).

b. No loan shall be for more than 75 percent
or 40 years. The interest rate shall be
2 percent more than the administration
pays the Treasury (sec. 8 (b)).

Assistance must be not otherwise
available on reasonable terms
(sec. 107 (b) (3)).

No loan shall be made if the Gov-
ernment can participate with a
private lender (sec. 107 (b) (4)).
Reasonable assurance of repayment
(sec. 107 (b) (5)).

c. 10 percent to 25 percent shall be supplied
by the State or political subdivision as
loan or equity capital. Federal loan
must be repaid first and have first lien.
Local financial conditions and per
capital income to be considered in de-
termining amount of local participation
(sec. 8 (c)).

No loan shall exceed 35 percent or 25 years (sec. 107 (b) (6 and 7)). Other conditions:

Non-Federal funds are sufficient to supplement Federal funds. At least 15 percent shall be supplied by State or community or area organiza tion as loan or equity capital (sec. 107 (b) (7) (A and B)). Federal loan is repayable ahead of and is repayable before the 15 percent (sec. 107 (b) (7) (B)).

Project must be part of an over. all program for the economic development of the area (sec. 107 (b) (8)).

Comparison of principal provisions in area redevelopment bills-Continued

Comparison of principal provisions in area redevelopment bills—Continued

Not more than 10 percent of funds for loans No provision.
under sec. 102 or for capital grants under

sec. 103 of the Housing Act shall be avail-
able for these purposes (sec. 17).

No provision...

Planning grants are authorized for smaller municipalities in designated areas (sec.18). Vocational training.... Secretary of Labor shall determine needs for

Penalties.

Employment of expediters and administrative

employees.

Annual report..

Appropriations..

training or retraining of unemployed per-
sons and shall cooperate with HEW to
assure existing programs are made avail-
able. When he finds additional services
are needed, he shall advise HEW and
HEW shall provide assistance, including
financial assistance, when necessary to the
appropriate State agency. If State serv-
ices are inadequate HEW may contract
for them. Retraining payments may be
made to unemployed persons who are not
receiving unemployment compensation
and are certified by the Secretary of Labor
as undergoing training, for up to 13 weeks
(secs. 19 and 20).

Penalties provided for false statements, will-
ful overevaluation, etc. (sec. 21).
No loan shall be made to business enterprise
unless owners (a) certify to Administrator
names of attorneys, agents, etc., employed
for purpose of expediting application and
fees paid for service, and (b) agree that for
2 years to refrain from employing any per-
son who shall have served as officer or em-
ployee of Administrator in position involv-
ing discretion as to granting assistance
under this act (sec. 22).
Comprehensive and detailed report required
(sec. 23).

Authorizes such sums as may be necessary
(sec. 24).

In processing applications for assistance under title II, the Administrator shall give priority first to areas designated under Area Assistance Act, provided the Secretary of Commerce certifies there is reasonable probability of lasting improvement in their economic development (sec. 104). Comparable provisions (sec. 105).

When skills of labor force are not suited to reemployment, Department of Labor "may provide advice and technical assistance" in developing and carrying out a program to increase employ ability (sec. 102 (c)).

When Department of Labor finds need for Vocational services, advises HEW. HEW may provide assistance, including financial assistance when necessary, to the State vocational education agency (sec. 102 (c)).

Comparable provisions (sec. 114).
No provision.

Comprehensive report required
(sec. 117).
Comparable provisions (sec. 118).

Senator DOUGLAS. I expect the departments which have been asked to comment on these bills will also forward their comments to us, so that the committee may have their views for consideration.

I want to make a statement for the record here. In a sense I realize as a sponsor of one of these measures it might be said that I have a personal interest in that bill. Of course, I do not deny that fact. I also, however, am chairman of the subcommittee and therefore must try to act in a judicial capacity on all of these measures.

I can truthfully say that I will try not to let my personal interest in my bill warp my judgment or sway my actions as chairman of the subcommittee. If at any time it seems to anyone or any of the sponsors of these other bills that I am erring, I hope they will call that to my attention and I will at least make an honest effort to correct any mistakes which I may have made.