habilitation, or alteration of public facilities within such area. The act requires such grants to be supplementary to other funds, including loans made available by the act. Each project must be consistent with area's economic development program and must improve the area's development opportunities. Legislation AREA REDEVELOPMENT ADMINISTRATION GENERAL STATEMENT The purpose of the Area Redevelopment Act is "to establish an effective program to alleviate conditions of substantial and persistent unemployment and underemployment in certain economically distressed areas." The Federal Government, in cooperation with the States, will help such areas to plan and finance their economic development, thereby creating stable and diversified economies, as well as developing new job opportunities. The Secretary of Commerce will be responsible for administering the act. Provision is made for delegation of appropriate functions to existing agencies of the Federal Government. The functions lodged in the Secretary will be carried out through an Area Redevelopment Administration. The Administrator will designate as "redevelopment areas" those areas in the Tnited States (including the 50 States, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, and American Samoa) having a condition of substantial and persistent unemployment. Two types of redevelopment areas are recognized. Under section 5(a) urban areas may be designated; under section 5(b) smalltown areas, Indian reservations, and rural areas (both farm and nonfarm) may be designated. The Departments of Labor, Agriculture, and Interior, as well as other agencies, both governmental and private, will provide the data on which the Administrator will base his designations of area eligibility. Three broad types of assistance are available under the Area Redevelopment Act: 1. Financial assistance; 2. Redevelopment guidance; and The Area Redevelopment Act also amends the urban renewal provisions of the existing Housing Act in two respects: First, to permit the rehabilitation of blighted industrial and commercial areas without regard to the requirement that the area be predominantly residential in character, and second, to extend urban planning assistance grants directly to cities, other municipalities, and counties in a redevelopment area. Loans for industrial and commercial projects The Administrator may make loans (including participations) to finance the purchase or development of land and facilities (including, in exceptional cases, machinery and equipment) for industrial or commercial usage, including the construction, rehabilitation, and conversion of buildings. The act provides separate loan funds of $100 million each for areas designated under sections 5(a) and 5(b). Loans and grants for public facilities The act provides $100 million for loans and $75 million for grants. The purpose of these loans and grants is to assist in financing the purchase or development of land for public facilities usage and the construction, rehabilitation, alteration, expansion, or improvement of public facilities within a redevelopment area. Proposed projects should contribute to the successful establishment or expansion of industrial or commercial plants or facilities in the area. Redevelopment guidance and technical assistance A. Redevelopment guidance involves two types of activity: 1. Providing a variety of research, surveys, technical data, and procurement information. 2. Furnishing members of the Administrator's staff to the area for consultation and guidance. B. Technical assistance: Furnishing technical assistance studies (up to $4.5 million annually) evaluating the needs of, and developing the potentiality for, economic growth of redevelopment and other areas. Since the adoption of an overall economic development program is a necessary requirement for obtaining an industrial or commercial loan or a public facility loan or grant, it is assumed that all three forms of technical assistance could be employed at an early stage to assist areas in the formulation of their overall economic development program. Occupational training The Secretary of Labor is authorized to study the skills and potentials of the labor force of any redevelopment area. Furthermore, he shall determine occupational training or retraining needs in the redevelopment area and advise the Secretary of Health, Education, and Welfare, who shall provide assistance, including financial assistance, when necessary, to the appropriate State vocational educational agency. The act authorizes $4.5 million annually for occupational training. Retraining subsistence payments The Secretary of Labor has the principal responsibility for entering into agreements with States having redevelopment areas for payments to such States to provide retraining subsistence to those unemployed persons who are certified by the Secretary of Labor to be undergoing occupational training or retraining. The sum of $10 million annually is authorized. Method of operation The Secretary of Commerce has legislative responsibility for carrying out all programs under the Area Redevelopment Act except the training and retraining subsistence provisions. The Congress intended that the Secretary discharge these functions through the use of existing Federal facilities "to the fullest extent practicable." Delegations of authority to other agencies will adhere to the following principles: (1) The Department of Commerce will supervise and coordinate the program. (2) Use of existing Federal facilities and skills will be utilized to the maximum extent. Action on the local level will normally be a team effort with the Area Redevelopment Administration providing coordination and guidance. (3) Neither Commerce nor any delegate agency will create new facilities that duplicate the existing facilities of another Federal agency. Appropriation structure The new Area Redevelopment Administration will be financed through three accounts: "Operations," "Public facility grants," and "Area redevelopment fund." Expenses of supervision, coordination, and direction of the program appear in the "Operations" account. Direct appropriations to this account. Direct appropriations to this account will provide for overall supervision of the program, technical guidance, information, and research, as well as the cost of administering public facility grants. The area redevelopment fund will reimburse the "Operations" account for the cost of administering the loan program. A separate appropriation is also proposed for "Public facility grants." The cost of administering these grants will be provided by appropriations to the "Operations" account. The "area redevelopment fund" is established by section 9 of the act. Funds are obtained by borrowings from the Treasury. The fund is available for defraying all of the costs of extending financial assistance under sections 6 and 7 of the act. Summary of requirements by appropriation : Operations appropriation__. Grants for "Public facilities" appropriation_ Total for all appropriations__ Summary of activity by the revolving fund: Total authority. Public facility loans__. Commercial and industrial loans. Total commitments---. $11, 000, 000 40, 000, 000 51, 000, 000 300, 000, 000 72,750,000 50,000,000 122, 500, 000 Plan of action for fiscal year 1961 A. Organization.-Departmental order No. 171 (May 8, 1961) established the Area Redevelopment Administration in the Department of Commerce and transferred personnel, property, records, and funds of the Office of Area Development to it. Three major offices were identified in the order: the Office of Area Operations, the Office of Research and Planning, and the Office of Management Services. The functions of these major units have been described in management orders of the Area Redevelopment Administration. B. Criteria for designation of redevelopment areas.—The legislation provides objective criteria under section 5(a) for making designations but leaves section 5(b) criteria largely up to the discretion of the Secretary of Commerce. Standards must be developed for defining geographical boundaries, for defining areas to be designated under 5(a) as distinguished from 5(b) and for making 5(b) designations. The Administrator has already designated 20 major areas and 94 smaller areas under section 5(a) of the act. Procedures for the designation of additional redevelopment areas have been adopted through negotiations with the Departments of Labor and Agriculture. C. Loan and grant policies and procedures.-The legislation provides general criteria for commercial, industrial, and public facility loans. These are being further defined with respect to such matters as the conditions for repayment, and the meaning of "reasonable expectation of repayment." The public will want quickly information on where and how to apply for loans and the criteria under which they will be reviewed. Drafts of loans and grant policy statements are now in the process of interagency clearance. |