Development facilities grants―Justification of other objects

12.0 Personnel benefits---

1966 estimate $195,000

Covers the Government's share of the civil service retirement fund, social security tax, and the group life insurance and health benefits programs. The cost is approximately 7.5 percent of the compensation expenses. 21.0 Travel and transportation of persons-

Direct:

(a) Examination and review of project proposals at
site by Washington staff; 12 trips per profes-
sional at $175 per trip..

(b) On-site evaluation, inspection during construction,
and followup by field engineers; 8 trips per pro-
fessional at $100 per trip___

Administrative: Pro rata share of transportation and per
diems expenses of agency executive staff, auditing, man-
agement, and other administrative personnel, 160 trips at
$130 each_‒‒

22.0 Transportation of things_____.

Direct: Provides for the movement of household goods
of Federal employees to the proposed field offices_-_-
Administrative: Pro rata share of the shipment of forms,
stationery, and other materials to field offices---

23.0 Rent, communications, and utilities--

Direct: Payment to GSA for approximately 7,900 square
feet in Washington and 46,300 square feet in the field,
of office space to house the 452 new positions assigned
to this program. The estimate assumes leases being in
effect for two-thirds of the fiscal year. The current
square footage costs are $5.25 in the Washintgon area,
and averages $3.75 nationally. Total direct rent_____
This object class also provides for the communications ex-
penses of this program, including local and long-distance
telephone service, telegraph, and penalty mail charges.
The estimate is based on an average rate of $50 per man-
month for each of the 229 man-years required by this pro-
gram. Total direct communications..
Administrative: The costs of additional space for the 63
new executive and administrative positions ($19,000) and
the communications costs of the administrative personnel
($40,000) pro rated to this appropriation_-_-

24.0 Printing and reproduction__

355,000

118,000

216, 000

21,000

32,000

30,000

2,000 342,000

145, 000

138, 000

59,000

51,000

Administrative: Pro rata share of the printing expenses
of the executive and administrative staff_.

Direct: Printing of forms, circulars, manuals, and reports
needed to conduct this program, at an average rate of
$175 per man-year-

40,000

11,000

413, 000

25.1 Other services____.

Direct Engineering evaluations by engineering firms of
project proposals which are unusual in terms of their size,
complexity, or nature; 350 evaluations averaging $1,150__
Administrative: Pro rata of contract for development of
program control and evaluation system___

400, 000

13.000

Development facilities grants-Justification of other objects-Continued

25.2 Services of other agencies---.

1966 estimate

Direct: Evaluation of project proposals by other Federal
agencies___

Administrative: Pro rata share of personnel, accounting,
and administrative services provided by the Department
($106,000) and the machine processing of the program con-
trol and evaluation reports ($22,000).

26.0 Supplies and materials___.

Direct: Provision of miscellaneous expendable office sup-
plies, materials, standard forms, and periodicals, at $50
per man-year__

Administrative: Pro rata share of the provision of the
above items for the executive and administrative staff____

31.0 Equipment----

Direct: Procurement of equipment and furnishings for 452
additional positions at approximately $690 per new posi-
tion ---

Administrative: Procurement of the above items for the 63
new executive and administrative positions pro rated to
this appropriation---

Total, other objects----

Total, administrative expenses

$160,000

32,000

128,000

19, 000

12,000

7,000

355,000

312,000

43,000 1,922, 000

4,500,000

Mr. ROONEY. The justifications are already in the record and give meager reference to this point of $4.5 million.

Do you have any other information for us this morning that you did not have on Friday?

Mr. LEWIS. Mr. Chairman, excuse me. We do have for this same program here the list of positions that you had asked for but with the dollar figures attached. This is the same list that was provided Friday but with the dollar gross salaries by type of position.

Mr. ROONEY. This was already requested on Friday so you can take this back and insert it at the point in the record where it was requested. Do you have anything further, gentlemen?

Mr. FOLEY. We have a memorandum here from our Acting Chief Counsel.

Mr. ROONEY. I mean with regard to the figures in your budget. We will get into that matter of use of the funds for loans in just a few

moments.

Mr. FOLEY. Do you have anything further?
Mr. LEWIS. I believe this is all we have.

54-434-65-pt. 8-19

LEGALITY OF ARA EXPENDITURES

Mr. ROONEY. All right. Let us not waste any time. What do you have to say about this matter, Mr. Foley?

Mr. FOLEY. About the legality of expenditures?

Mr. ROONEY. Yes.

Mr. FOLEY. We have a memo here from our Acting Chief Counsel to Mr. Lewis, our budget chief, concerning the activities of the ARA during the months of July and August 1965, and the legal authority for continuing their activities at that time.

Mr. ROONEY. May we see it, please?

Before we read it we will put it in the record at this point to be overly fair to you.

(The memo follows:)

MEMORANDUM

SEPTEMBER 20, 1965.

In reply refer to:

To: Brinley J. Lewis, Chief, Budget Division.
From: Acting Chief Counsel.

Subject: Legality of expenditures for ARA projects during July and August 1965. Subsection 29 (a) of the Area Redevelopment Act (Public Law 87-27) originally provided that the act and all authority thereunder would terminate on June 30, 1965. However, on June 1, 1965, the Senate by a 71-12 vote passed a bill (S. 1648, the Public Works and Economic Development Act of 1965) explicitly designed to expand and continue area redevelopment activities similar to those conducted under ARA; and on June 22, 1965, a substantially similar bill was reported by the House Public Works Committee.

Accordingly, the House Appropriations Committee on June 28, 1965, included "area redevelopment activities" within subsection 101 (c) of House Joint Resolution 553, a continuing resolution for the month of July. The funds were appropriated "for continuing projects or activities which were conducted in the fiscal year 1965 * * * at a rate for operations not in excess of the current rate.” The resolution was signed into law on June 30, 1965, as Public Law 89-58 after only minimal debate in the two Houses.

Although it is probable that a point of order could have been raised against this part of the continuing resolution as containing legislation, such provisions in continuing resolutions are not without precedent; and it is clear that if a continuing resolution containing substantive legislation is enacted, it becomes law. From a legal standpoint it is immaterial that the continuing resolution was principally concerned with programs for which annual appropriation bills were then pending, since the Appropriations Committee could hardly have been unaware that no such bill was then pending with respect to area redevelopment activities, and the language of the resoltuion speaks for itself. In the absence of an express indication to the contrary, it was apparently the intent of the resolution that ARA should continue its general program of area redevelopment—which included loan approvals and technical assistance-pending congressional action on the proposed Public Works and Economic Development Act and the subsequent introduction of a supplemental appropriation bill. And it was so interpreted by ARA's legal staff.

In support of this view is the fact that 6 days prior to the introduction of House Joint Resolution 553, Chairman Patman of the Banking and Currency Committee, which had overseen the area redevelopment program from its inception, independently introduced another resolution, House Joint Resolution 541 (subsequently Public Law 89-55), which amended subsection 29 (a) of the Area Redevelopment Act by substituting the date "August 31, 1965" for the date "June 30, 1965". The principal reason for the introduction of House Joint Resolution 541, according to Mr. Patman, was to "keep the act in operation until legislation providing for some changes in the present act can be brought forth by the appropriate committee of the House * * (Congressional Record, p. 14182; emphasis supplied). However, since Mr. Patman knew of the probability