"For necessary expenses, not otherwise provided for, of the Area Redevelopment Administration, including not to exceed $4,500,000 for technical assistance, as authorized by section 11 of the Area Redevelopment Act (Public Law 87-27), rent in the District of Columbia, and hire of passenger motor vehicles, $11,000,000: Provided, That funds made available for administrative expenses of carrying out the functions of the Area Redevelopment Administration may be consolidated into a single expense fund account.”

HOUSE REPORT 1175

"The committee recommends that the allowance for administrative expenses be reduced to $5,500,000 because seven existing Government agencies will share the work."

JUSTIFICATION

The House Appropriations Committee recommended an amount of $5,500,000 for operations under the act with a limitation of $3,250,000 on operations and $2,250,000 for technical assistance. The entire item was deleted from the bill on a point of order concerning the financing of moneys to be utilized for the purpose of making loans. We are requesting restoration of the full $11 million so that we can effectively discharge our responsibilities for administering the act.

We maintain that the estimate is an austere one, fully recognizing and making utilization of personnel and facilities now in existence. Amounts have been recommended for other agencies only where we believe additional staff and resources are needed to get the redevelopment job done. The estimates for our own agency include only enough to coordinate the work, provide a field staff and headquarters support for the field coordinators. This will provide "onestop" service to the communities and to others concerned with the program. We must also assure a careful evaluation and review of programs and projects

so that the loan and grant funds are effectively utilized in redeveloping the areas in need of assistance. The program and the requirements are summarized below:

1. Operations

Area Redevelopment Administration

The Area Redevelopment Administration requested for its own services $2,955,000 providing an average staff of 186 persons to accomplish the following operations:

(a) Direct the program and coordinate the efforts of all concerned agencies in alleviating conditions of substantial and persistent unemployment and underemployment.

(b) Help communities to help themselves by providing in the field at the community, guidance and assistance in the development of sound programs of economic development and of specific projects for financial and technical assistance.

(c) Focus the efforts of State agencies and other Federal Agencies upon the problems and opportunities for sound economic development in the designated

areas.

(d) Stimulate multiplant firms to locate appropriate plant expansions in redevelopment areas.

(e) Help channel Federal procurement so as to assist these areas and coordinate assistance to communities affected by the closing of military installations. (f) Provide and furnish material on area redevelopment techniques, locational requirements of growth industries, reference data on new business development and technology.

(g) Conduct research and studies as to the causes and cures of chronic unemployment as specifically required by the act.

None of these functions should be neglected. To accomplish these purposes we proposed the following staff:

Area Redevelopment Administration will not be the only agency operating in the field. The act requires us to utilize to the fullest extent the capabilities of other agencies. To accomplish this the Secretary of Commerce has delegated functions to several of the agencies. In preparing our budget requests we have assured ourselves that funds were included only for additional work in their respective fields that was required over and above the agencies abilities to finance within funds already available to them. It is believed that the additional work required of these agencies needs the financing requested in our budget.

(a) Department of Agriculture.-The Department has and continues a considerable rural development program. Under our delegation they will be called on to provide the organizational and educational leadership in rural redevelopment areas designated under our act, and will assist these areas in the preparation of economic development programs and specific projects to accomplish these goals. This will require in many areas, additional staff for assignment to step up the development program in the redevelopment areas. Agriculture personnel will be called on to provided advice and guidance to local areas in the fields of agricultural credit, market development and financing as well as forest products industry, forest recreational development, water resources, land capability and the like. They will also provide guidance, as to the technical and economicfeasibility of project applications for loans and grants, $1,525,000 for 145 manyears are required.

(b) Department of Interior.—This Department will provide similar functions: increasing the amount of work with respect to Indian reservations, areas in the territories, and areas where economies are linked primarily to natural resources. While there are fewer areas involved the problems are no less, $300,000 for 25 man-years are required.

areas.

(c) Department of Labor.-This Department will have a large responsibility for the provision of data as to employment and unemployment for labor market Such data are needed not only for the determination of initial and continued eligibility under the act, but particularly as to the characteristics of the work force, for use in the preparation of soundly conceived and practical economic development programs. The bulk of the cost will be for work performed primarily by the State employment agencies. Actual advice and assistance in the utilization of this data will be performed by personnel of the Department of Labor, $1,500,000 for 140 man-years are required.

(d) Small Business Administration and Housing and Home Finance Agency.— These agencies will provide for the actual processing, making and servicing of loans and grants for Area Redevelopment Administration; $220,000 was included in the budget request for the cost involved in processing public facility grants by HHFA. Funds estimated at $790,000 ($300,000 for HHFA and $490,000 for SBA) for the servicing of loans were to be obtained as a charge to the revolving fund, which would in time be offset by income from the rate of interest charged above that which is required for payment to the Treasury Department. 2. Technical assistance

The amount of $4,500,000 was requested for the provision of technical assistance. Many of the smaller urban and rural areas will not have the resources to prepare programs for economic development without detailed assistance from outside sources with professional competence and background. In addition it may be necessary to obtain for these areas specific studies of their resources and potential. This is especially important during the initial stages of the program so that the economic development programs and projects are soundly based. Such studies will be provided from these funds only when existing Federal resources are not available.

Other areas of study which would provide the basic information that would make possible an attack on specific problems of unemployment and underemployment include:

(a) Studies of new or improved use of natural resources and new business or new product opportunities which will be of assistance to specific areas.

(b) Studies of development trends and opportunities of individual States and regions. The upper Great Lakes region is a good example of an area where Indian reservations, declining mineral industries, and low farm income complicate the problem and require, through studies, a broad approach to utilization of area resources.

(c) Detailed analysis of locational, site and capital requirements of growth industries. This will proved invaluable information on manpower, raw materials, transportation, and other requirements against which redevelopment areas can compare their resources and prepare sound plans.

(d) Studies of tourist and other nonindustrial and commercial development potential for certain areas.

While the bulk of the program is expected to be accomplished by contract with private firms and other Government agencies, 32 positions are also included in the request for $4,500,000.

"For grants in accordance with the provisions of section 8 of the Area Redevelopment Act (Public Law 87-27), $40,000,000, to remain available until expended."