help them compete with the big, prosperous counties and cities. We look at them as our part of the job.

Mr. CLEVELAND. I was told you had been in the process of concluding your work with EDA toward the end of this month, but then you decided to stay on for another year. Is that correct? Mr. NEPTUNE. Well, another few months, anyway; yes, sir.

Mr. CLEVELAND. Another few months. We would be glad to see you up in New England if that is your attitude. I commend you for that.

Mr. NEPTUNE. Let me commend my counterpart, Mr. Berry, from whom I have learned an awful lot, but he has the same attitude, I am sure, and just

Mr. CLEVELAND. He may have the same attitude, but they have got him ensconced in the city of Philadelphia, and Philadelphia is almost as far away from northern New England as Washington is, and as

remote.

Mr. NEPTUNE. Yes, sir. He has too big an area. I have too big an area. You are exposing a kind of policy difference that we have, on good terms, in the agency. He works hard, and I am sure

Mr. CLEVELAND. I am not asking for you to agree with my comments, because I did not want to put you in that spot. I will make this as a statement, but I still think, at least, in my experience in northern New England, EDA is not performing its function of getting out in the field and helping the areas it needs to help.

What is happening is that most of the applications are being generated in the wealthier communities where they can afford a town manager and a lawyer and an accountant, and they have got city planners and all of the accoutrements, and these are the people that are getting the dough.

Mr. NEPTUNE. I will pass that word on to Mr. Berry, and I am sure he will take those comments very seriously.

Mr. FAGAN. From my experience in the agency in the last 2 years, I think your criticism was very valid. I do not know whether it is the fault of our EDR's in the field or the fault of the new office that we put in Philadelphia, but it does seem on balance that smaller, more remote, and less sophisticated communities in other parts of the country do seem to get more individual projects than they do in New England. I do not know why that occurs.

Mr. CLEVELAND. I know why it occurs.

Mr. FAGAN. We will make an effort to find out.

Mr. CLEVELAND. I know why it occurs. I have a guilty conscience, because I am Congressman for some of that area, and probably I should be using my time and my staff's time to help them. I just have not got the time, unfortunately. But, one of your witnesses this morning, this gentleman from Colorado, made the point that the socalled doers in some of these communities are spread pretty thin and that they are overworked. The answer is, I think, EDA could get some energy out of staff people into these areas and generate the type of project that hopefully would start refurbishing some of these areas and get them back on the track. It is just that simple.

Mr. NEPTUNE. It should not be necessary for the Congressmen to get into it. We should do it without the Congressmen and, certainly, I am sure in most areas it goes forward with the Congressman's knowledge, but it is not necessary for him to work at it.

Mr. CLEVELAND. I am not saying it should be, and it certainly should not be. I simply say that I sometimes feel guilty because I know communities in my district need this type of assistance and are not getting it.

Once in a while, I have lent a hand, and once in a while, I have been successful. But the basic problem is, I do not think the field representatives of EDA quite have this aggressive attitude for going to where the trouble is and lending a helping hand. They are sort of sitting back and waiting for applications to come in. That is not true of all of them, but I think it has been true in parts of northern New England.

Mr. FAGAN. You are right. We have had more of that problem in that area than we have had other places.

Mr. KLUCZYNSKI. Are you through, Mr. Neptune? Did you complete your testimony?

Mr. NEPTUNE. Yes.

Mr. KLUCZYNSKI. The chair recognizes Mr. Yates for a question or two.

Mr. YATES. Thank you, Mr. Chairman. Mr. Fagan, as a result of the Environmental Act of 1969, do you prepare environmental impact statements on each and every project?

Mr. FAGAN. No; we do not. In the application process, the applicant is provided with a form on which he is supposed to write down his own opinion of the environmental impact and concern of the particular project. That is then sent around in the A-95 process and comments are obtained from other interested agencies and parties, and then our agency makes a determination as to whether a full-scale environmental impact statement is necessary.

So far, we have only done four, and we have reviewed several hundred out of that, and we have determined that it was necessary to write four environmental impact statements. So far, it has not been too much of an added processing burden.

Mr. YATES. The point I wanted to get for the record and before the subcommittee is that you have established procedures by which, out of several hundred, I believe you said, possible environmental impact statements were actually reduced to four in the draft stage. Is that correct?

In other words, out of the several hundred possibilities, and Mr. Reiss is raising his hand

Mr. REISS. Can I answer that?

Mr. FAGAN. Yes.

Mr. REISS. Basically, we evaluate projects prior to the time we decide whether the impact statement should be written. There is a point under NEPA, National Environmental Policy Act, which says that impact statements will be written if the project simply affects the quality of health and environment. There is an evaluation process which we go through, which the form addresses itself to.

Mr. YATES. In other words, as I read the testimony, you take the position that the act gives vou the option of making the decision of whether or not one should be prepared, and since you have that authority, you act on that authority and do not just wholesale make environmental impact statements without making the decision?

Mr. REISS. That is right.

Mr. YATES. Thank you. Is it a fair statement that EDA has averaged annually about one-third of its authorizations in appropriations? Is that a fair statement?

Mr. FAGAN. That is correct.

Mr. YATES. Have you found that the one-third funding of your authorization has resulted in denial of good projects, the procrastination has resulted in the denial of good projects?

Mr. FAGAN. I would say not. We fund at least two-thirds or more of those that are really truly worthwhile. I am sure we could spend more money. Then, again, if we spent considerably more money, we would have to have a larger field staff to process many more projects. In each of the past 2 or 3 years, in the last 2 years, we have ended up the fiscal year with a backlog of some 50 percent of the amount of OPW funds that we have had. So, we have not really had a tremendous backlog which would be an example of an inability to fund. Mr. YATES. Would you make the statement that you could attribute no projects being denied because of lack of funds?

Mr. FAGAN. I would not want to say that no projects have, but I do not think many have.

Mr. YATES. You refer to certain work performed by SBA. How was SBA reimbursed for these services?

Mr. FAGAN. Let me give a little background on that and ask Mr. Cahill to explain exactly what the arrangement is at the moment. As you know, when EDA was created in 1965, it was instructed by the Congress to contract out a certain amount of its business loan processing to SBA.

Mr. YATES. Excuse me. Was this in the Public Works and Economic Development Act of 1965?

Mr. FAGAN. No. This was a result of instructions from the Committee on Appropriations. Since that time, we have taken back more and more of the processing and have rearranged our agreement with SBA, and since that time, we now do more of the processing than we did. We are in the midst of reviewing the present situation to see whether or not we can still do more. If you would like to have explained exactly what we are doing and what they are doing, and how much they are being paid for and

Mr. YATES. I do not think that much detail is necessary at this point. A certain amount has been earmarked, would that be a correct statement, annually for SBA to perform this function?

Mr. FAGAN. That is correct.

Mr. YATES. And this is done at the Appropriations Committee level?

Mr. FAGAN. Yes.

Mr. YATES. For the record, how much has been earmarked for SBA for fiscal year 1971?

Mr. FAGAN. I believe it was $1,200,000.

Mr. YATES. Would it be possible, then-briefly, to go back to the point you just mentioned that EDA could perform this function itself?

Mr. FAGAN. We are reviewing this at the moment. We do not know whether or not we would want to say at the moment that we could do all of it. It is under advisement at the moment.

Mr. YATES. Mr. Fagan, you describe the functions of the Office of Technical Assistance and the Department of Commerce Contracting Office in connection with contract processing. As I read this, this contracting office is in the Department of Commerce but outside EDA; is that correct?

Mr. FAGAN. Yes. It is the departmental contracting office. We do not have our own.

Mr. YATES. You do not have your own contracting office. Do you feel this back and forth exchange, then, as I read from your testimony, between the contracting office-well, first, apparently from your technical assistance people to the contracting office and back again, and finally, I suppose, back to you for signoff, does this possibly create delay in trying to get any projects approved?

Mr. FAGAN. I am sure it does.

Mr. YATES. If I may interject, there is something to that effect described in your charts L and M, which indicates a greater length of time, which was the reason for the question.

Mr. FAGAN. I am sure it does cause delays in processing. Whether or not it would be faster had we our own processing office, of course we cannot tell. We do not have any. Better administrative brains than mine have determined that there should be only one contracting office, and, at the moment, there is only one.

Mr. YATES. Thank you. That is all I have.

Mr. KLUCZYNSKI. We have a teller vote on the floor.

Mr. D'AMICO. In preparation for these hearings, Chairman Wright wrote to each of the Governors of the States, asking for their comments and their suggestions. In their responses, several suggestions were made and several questions were asked.

May we ask that at some time convenient to you, Mr. Fagan, you comment or respond to some of the questions, some of the issues raised by the respective Governors?

Mr. FAGAN. We would be happy to reappear and meet with the staff.

Mr. KLUCZYNSKI. The Chair would appreciate it if you would answer the questions so we can have them in the record.

(The material requested appears in the appendix, beginning at page 785.)

Mr. KLUCZYNSKI. Gentlemen, I want to thank you for your presence here today. You have been most cooperative, and everyone of you has had all the answers at your fingertips. I have learned something new, and I am very proud to have people like you in our Federal agencies. Also, I want to thank the Department of Commerce for the splendid cooperation which it has given to this committee. Thank you again, and it was nice to have you with us. The hearings will adjourn until 1:30 tomorrow afternoon.

(Whereupon, at 4:05 p.m., the subcommittee recessed, to reconvene at 1:30 p.m., Thursday, June 24, 1971.)