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105th Congress                                            Rept. 105-684
                        HOUSE OF REPRESENTATIVES

 2d Session                                                      Part 1
_______________________________________________________________________


 
              ECONOMIC DEVELOPMENT PARTNERSHIP ACT OF 1998

_______________________________________________________________________


                 August 6, 1998.--Ordered to be printed

                                _______
                                

 Mr. Shuster, from the Committee on Transportation and Infrastructure, 
                        submitted the following

                              R E P O R T

                             together with

                           SUPPLEMENTAL VIEWS

                        [To accompany H.R. 4275]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Transportation and Infrastructure, to whom 
was referred the bill (H.R. 4275) to reauthorize and make 
reforms to programs authorized by the Public Works and Economic 
Development Act of 1965 and the Appalachian Regional 
Development Act of 1965, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.
  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Economic Development Partnership Act 
of 1998''.

        TITLE I--PUBLIC WORKS AND ECONOMIC DEVELOPMENT PROGRAMS

                      Subtitle A--Reauthorizations

SEC. 101. AMENDMENT OF PUBLIC WORKS AND ECONOMIC DEVELOPMENT ACT OF 
                    1965.

  The Public Works and Economic Development Act of 1965 (42 U.S.C. 3121 
et seq.) is amended by striking all after the first section and 
inserting the following:

``SEC. 2. FINDINGS AND DECLARATION.

  ``(a) Findings.--Congress finds that--
          ``(1) the maintenance of the national economy at a high level 
        is vital to the best interests of the United States, but some 
        of our regions, counties, and communities are suffering 
        substantial and persistent unemployment and underemployment 
        that cause hardship to many individuals and their families and 
        waste invaluable human resources;
          ``(2) to overcome this problem the Federal Government, in 
        cooperation with the States, should help areas and regions of 
        substantial and persistent unemployment and underemployment to 
        take effective steps in planning and financing their public 
        works and economic development, with cooperation among area 
        local governments;
          ``(3) Federal financial assistance, including grants for 
        public works and development facilities, to communities, 
        industries, enterprises, and individuals in areas needing 
        development should enable such areas to help themselves achieve 
        lasting improvement and enhance domestic prosperity by the 
        establishment of stable and diversified local economies, 
        sustainable development, and improved local conditions, if such 
        assistance is preceded by and consistent with sound, long-range 
        economic planning; and
          ``(4) under the provisions of this Act, new employment 
        opportunities should be created by developing and expanding new 
        and existing public works and other facilities and resources 
        rather than by merely transferring jobs from one area of the 
        United States to another.
  ``(b) Declaration.--Congress declares that, in furtherance of 
maintaining the national economy at a high level--
          ``(1) the assistance authorized by this Act should be made 
        available to both rural and urban areas;
          ``(2) such assistance should be made available for planning 
        for economic development prior to the actual occurrences of 
        economic distress in order to avoid such condition; and
          ``(3) such assistance should be used for long-term economic 
        rehabilitation in areas where long-term economic deterioration 
        has occurred or is taking place.

    ``TITLE I--ECONOMIC DEVELOPMENT PARTNERSHIPS, COOPERATION, AND 
                              COORDINATION

``SEC. 101. ESTABLISHMENT OF ECONOMIC DEVELOPMENT PARTNERSHIPS.

  ``(a) In General.--In providing assistance under this Act, the 
Secretary shall cooperate with States and other entities to ensure 
that, consistent with national objectives, Federal programs are 
compatible with, and further the objectives of, State, regional, and 
local economic development plans and comprehensive economic development 
strategies.
  ``(b) Technical Assistance.--The Secretary shall provide to States, 
local governmental subdivisions of States, sub-State regional 
organizations (including organizations that cross State boundaries), 
and multi-State regional organizations technical assistance that the 
Secretary determines may be necessary or desirable to--
          ``(1) alleviate economic distress;
          ``(2) encourage and support public-private partnerships for 
        the formation and improvement of economic development 
        strategies that promote the growth of the national economy;
          ``(3) stimulate modernization and technological advances in 
        the generation and commercialization of goods and services; and
          ``(4) enhance the effectiveness of United States firms in the 
        global economy.
  ``(c) Intergovernmental Review.--The Secretary shall issue 
regulations to ensure that appropriate State and local governmental 
authorities will be given a reasonable opportunity to review and 
comment on proposed economic development projects that the Secretary 
determines may have a significant and direct impact on the economy of 
the area.
  ``(d) Agreements.--The Secretary may enter into an agreement with 2 
or more adjoining States, or an organization consisting of such States, 
in support of effective economic development. The agreement shall 
provide for suitable participation by other governmental and non-
governmental parties that represent significant interests in and 
perspectives on economic development in the area.

``SEC. 102. COOPERATION OF FEDERAL AGENCIES.

  ``Each Federal department and agency, in accordance with applicable 
laws and within the limits of available funds, shall exercise its 
powers, duties, and functions, and shall cooperate with the Secretary, 
in a manner that will assist the Secretary in carrying out the 
objectives of this Act.

      ``TITLE II--GRANTS FOR PUBLIC WORKS AND ECONOMIC DEVELOPMENT

``SEC. 201. PUBLIC WORKS GRANTS.

  ``(a) Direct Grants.--Upon the application of an eligible recipient, 
the Secretary may make direct grants for--
          ``(1) acquisition or development of land and improvements for 
        public works, public service, or development facility usage; 
        and
          ``(2) acquisition, design and engineering, construction, 
        rehabilitation, alteration, expansion, or improvement of such 
        facilities, including related machinery and equipment.
  ``(b) Selection of Projects.--The Secretary may provide assistance 
for a project under this section only if the Secretary finds that--
          ``(1) the project will directly or indirectly--
                  ``(A) tend to improve opportunities in the area in 
                which the project will be located for the successful 
                establishment or expansion of industrial or commercial 
                plants or facilities;
                  ``(B) otherwise assist in the creation of additional 
                long-term employment opportunities for the area; or
                  ``(C) primarily benefit long-term unemployed 
                individuals and members of low-income families;
          ``(2) the project will fulfill all or part of a pressing need 
        of the area in which the project will be located; and
          ``(3) the project is consistent with a comprehensive economic 
        development strategy that has been developed in accordance with 
        section 303 for the area in which the project will be located.
  ``(c) Limitation.--Not more than 15 percent of the amounts made 
available to carry out this section in a fiscal year may be expended in 
any one State.

``SEC. 202. CONSTRUCTION COST INCREASES.

  ``(a) In General.--Subject to subsection (b), the Secretary may 
increase the amount of a grant (including a supplemental grant) made 
for a construction project under this title (or title I of this Act, as 
in effect before the date of enactment of the Economic Development 
Partnership Act of 1998) if, after the grant has been made but before 
completion of the project, the cost of the project has increased and if 
an increase in the amount of the grant is necessary for the 
satisfactory completion and operation of the project.
  ``(b) Limitations.--The Secretary may not increase the amount of a 
grant for a project under subsection (a) if--
          ``(1) the increase would cause the Federal share of the cost 
        of the project to exceed the maximum percentage permitted for 
        the project under this Act, as in effect at the time of the 
        increase;
          ``(2) the amount of the increase exceeds 15 percent of the 
        original estimated cost of the project; or
          ``(3) the amount of the increase exceeds the difference 
        between the estimated cost of the project on the date of the 
        increase and the original estimated cost of the project.

``SEC. 203. PLANNING AND ADMINISTRATIVE EXPENSES.

  ``(a) Direct Grants.--Upon the application of an eligible recipient, 
the Secretary may make direct grants for economic development planning 
and for the administrative expenses of organizations undertaking such 
planning.
  ``(b) Planning To Reduce Unemployment and Increase Incomes.--The 
planning for cities, other political subdivisions, Indian tribes, and 
sub-State planning and development organizations (including areas 
described in section 302(a) and economic development districts) 
assisted under this section shall include systematic efforts to reduce 
unemployment and increase incomes.
  ``(c) Planning Process.--Planning assisted under this section shall 
be a continuous process, involving public officials and private 
citizens, in analyzing local economies, defining development goals, 
determining project opportunities, and formulating and implementing a 
development program.
  ``(d) Use of Other Federal Funds.--Planning assistance received under 
this section shall be used in conjunction with any other available 
Federal planning assistance to ensure adequate and effective planning 
and economical use of funds.
  ``(e) State Plans.--
          ``(1) Preparation of plans.--A State plan prepared with 
        assistance under this section shall be prepared cooperatively 
        by the State, political subdivisions of the State, and the 
        economic development district located in whole or in part 
        within the State, as a comprehensive economic development 
        strategy.
          ``(2) Consistency with local and economic development 
        district plans.--Upon completion of a State plan prepared with 
        assistance under this section, the State shall--
                  ``(A) certify to the Secretary that in the 
                preparation of the State plan, the local and economic 
                development district plans were considered and, to the 
                fullest extent possible, the State plan is consistent 
                with such plans; and
                  ``(B) identify any inconsistencies between the State 
                plan and the local and economic development district 
                plans, with the justification for each inconsistency.
          ``(3) Considerations.--Any overall State economic development 
        planning shall be a part of a comprehensive planning process 
        that shall consider providing public works to--
                  ``(A) stimulate and channel development, economic 
                opportunities, and choices for individuals;
                  ``(B) support sound land use;
                  ``(C) foster effective transportation access;
                  ``(D) promote sustainable development;
                  ``(E) enhance and protect the environment, including 
                the conservation and preservation of open spaces and 
                environmental quality;
                  ``(F) provide public services;
                  ``(G) promote technology development; and
                  ``(H) balance physical and human resources through 
                the management and control of physical development.
          ``(4) Annual report.--A State receiving assistance under this 
        subsection shall transmit to the Secretary an annual report on 
        the planning process of the State.

``SEC. 204. COST SHARING.

  ``Subject to section 205, the amount of a direct grant for a project 
under this title may not exceed 50 percent of the cost of the project. 
In determining the amount of the non-Federal share, the Secretary shall 
give due consideration to all contributions, both in cash and in kind, 
fairly evaluated, including contributions of space, equipment, and 
services.

``SEC. 205. SUPPLEMENTARY GRANTS.

  ``(a) Authority To Make Supplementary Grants.--
          ``(1) In general.--Upon the application of an eligible 
        recipient, the Secretary may make a supplementary grant for a 
        project for which the applicant is eligible but, because of the 
        economic situation of the applicant, for which the applicant 
        cannot supply the required non-Federal share.
          ``(2) Types of assistance.--Supplementary grants under this 
        section may include grants to enable States and other entities 
        within areas described in section 302(a) to take maximum 
        advantage of designated Federal grant-in-aid programs (as 
        defined in subsection (b)(4)), direct grants-in-aid authorized 
        under this title, Federal grant-in-aid programs authorized by 
        the Watershed Protection and Flood Prevention Act (68 Stat. 
        666), and the 11 watersheds authorized by the Flood Control Act 
        of December 22, 1944 (58 Stat. 887).
  ``(b) Requirements Applicable to Supplementary Grants.--
          ``(1) Amount of grants.--The amount of a supplementary grant 
        for a project under this section may not exceed the applicable 
        percentage to be established by the Secretary by regulation, 
        but in no event may the non-Federal share of the aggregate cost 
        of any such project (including assumptions of debt) be less 
        than 20 percent of such cost, except as provided by paragraph 
        (6).
          ``(2) Form of grants.--Supplementary grants shall be made by 
        the Secretary, in accordance with regulations to be issued by 
        the Secretary, by increasing the amounts of direct grants 
        authorized under this title or by the payment of funds 
        appropriated under this Act to the heads of the departments, 
        agencies, and instrumentalities of the Federal Government 
        responsible for the administration of the applicable Federal 
        programs.
          ``(3) Federal share limitations specified in other laws.--
        Notwithstanding any requirement as to the amount or sources of 
        non-Federal funds that may otherwise be applicable to the 
        Federal program involved, funds provided under this section may 
        be used for the purpose of increasing the Federal contribution 
        to a project in an area described in section 302(a) under the 
        Federal program above the fixed maximum portion of the cost of 
        the project otherwise authorized by the applicable law.
          ``(4) Designated federal grant-in-aid programs defined.--In 
        this section, the term `designated Federal grant-in-aid 
        programs' means such existing or future Federal grant-in-aid 
        programs assisting in the construction or equipping of 
        facilities as the Secretary may, in furtherance of the purposes 
        of this Act, designate as eligible for allocation of funds 
        under this section.
          ``(5) Consideration of relative need in determining amount.--
        In determining the amount of a supplementary grant available 
        for a project under this title, the Secretary shall take into 
        consideration the relative needs of the area and the nature of 
        the project to be assisted.
          ``(6) Exceptions.--
                  ``(A) Grants to indian tribes; disaster assistance.--
                In the case of a grant to an Indian tribe, or in the 
                case of a grant for assistance authorized by section 
                209(d), the Secretary may reduce the non-Federal share 
                below the percentage specified in subsection (b)(1) or 
                waive the non-Federal share.
                  ``(B) Grants to states, political subdivisions, and 
                non-profits.-- In the case of a grant to a State (or a 
                political subdivision of the State) that the Secretary 
                determines has exhausted its effective taxing and 
                borrowing capacity, or in the case of a grant to a non-
                profit organization that the Secretary determines has 
                exhausted its effective borrowing capacity, the 
                Secretary may reduce the non-Federal share below the 
                percentage specified in subsection (b)(1) or may waive 
                the non-Federal share for a project the nature of which 
                the Secretary determines, in writing, warrants the 
                reduction or waiver of the non-Federal share.

``SEC. 206. REGULATIONS TO ENSURE RELATIVE NEEDS ARE MET.

  ``The Secretary shall issue rules, regulations, and procedures to 
carry out this title to ensure that adequate consideration is given to 
the relative needs of eligible areas. In issuing such rules, 
regulations, and procedures for assistance under section 201, the 
Secretary shall consider among other relevant factors--
          ``(1) the severity of the rates of unemployment in the 
        eligible areas and the duration of such unemployment; and
          ``(2) the income levels of families and the extent of 
        underemployment in eligible areas.

``SEC. 207. TRAINING, RESEARCH, AND TECHNICAL ASSISTANCE.

  ``(a) Direct Grants.--
          ``(1) In general.--Upon the application of an eligible 
        recipient, the Secretary may make direct grants for training, 
        research, and technical assistance, including grants for 
        program evaluation and economic impact analyses, that would be 
        useful in alleviating or preventing conditions of excessive 
        unemployment or underemployment.
          ``(2) Types of assistance.--Direct grants under this section 
        may include grants for project planning and feasibility 
        studies, demonstrations of innovative activities or strategic 
        economic development investments, management and operational 
        activities or strategic economic development investments, 
        management and operational assistance, establishment of 
        university centers, establishment of business outreach centers, 
        and studies evaluating the needs of, and development 
        potentialities for, economic growth of areas that the Secretary 
        finds have substantial need for such assistance.
          ``(3) Authority to waive non-federal share.--The Secretary 
        may waive the non-Federal share in the case of a project under 
        this section, without regard to section 204 or 205.
  ``(b) Forms of Assistance.--In carrying out the Secretary's duties 
under this Act, the Secretary may--
          ``(1) provide research and technical assistance through 
        members of the staff of the Secretary;
          ``(2) make payments of funds authorized to carry out this 
        section to departments or agencies of the Federal Government;
          ``(3) provide for the employment of private individuals, 
        partnerships, firms, corporations, or suitable institutions 
        under contracts entered into for such purposes; or
          ``(4) award grants under this title.

``SEC. 208. RELOCATION OF INDIVIDUALS AND BUSINESSES.

  ``Grants to eligible recipients under this Act shall include amounts 
that may be required to provide relocation assistance to affected 
persons, as required by the Uniform Relocation Assistance and Real 
Property Acquisition Policies Act 1970 (42 U.S.C. 4601 et seq.).

``SEC. 209. ECONOMIC ADJUSTMENT.

  ``(a) Direct Grants.--Upon the application of an eligible recipient, 
the Secretary may make direct grants for public facilities, public 
services, business development (including a revolving loan fund), 
planning, technical assistance, training, and other assistance that 
demonstrably furthers the economic adjustment objectives of this Act, 
including activities to alleviate long-term economic deterioration and 
sudden and severe economic dislocations.
  ``(b) Selection of Projects.--The Secretary may provide assistance 
for a project under this section only if the Secretary finds that--
          ``(1) the project will help the area for which the project is 
        to be undertaken meet a special need arising from--
                  ``(A) actual or threatened severe unemployment 
                arising from economic dislocation, including 
                unemployment arising from actions of the Federal 
                Government; or
                  ``(B) economic adjustment problems resulting from 
                severe changes in economic conditions (including long-
                term economic deterioration); and
          ``(2) except with respect to planning projects, the project 
        is consistent with a comprehensive economic development 
        strategy that has been developed in accordance with section 303 
        for the area for which the project is to be undertaken.
  ``(c) Activities Related to Defense Reductions.--In order to help the 
communities diversify their economies, assistance under this section 
shall extend to activities identified by communities impacted by 
military base closures, defense contractor cutbacks, and Department of 
Energy defense-related reductions. Nothing in this subsection is 
intended to replace the efforts of the economic adjustment program of 
the Department of the Defense.
  ``(d) Post-Disaster Activities.--Assistance under this section shall 
extend to post-disaster activities in areas affected by natural or 
other disasters.
  ``(e) Activities Related to International Trade.--Assistance under 
this section shall extend to activities identified by communities that 
have suffered economic injury caused by international trade in order to 
help the communities restructure their economies.

``SEC. 210. DIRECT EXPENDITURE OR REDISTRIBUTION BY RECIPIENT.

  ``Amounts from grants under section 209 may be used in direct 
expenditures by the eligible recipient or through redistribution by the 
eligible recipient to public and private entities in grants, loans, 
loan guarantees, payments to reduce interest on loan guarantees, or 
other appropriate assistance, but no grant may be made by an eligible 
recipient to a private profit-making entity.

``SEC. 211. CHANGED PROJECT CIRCUMSTANCES.

  ``In any case in which a grant (including a supplemental grant) has 
been made by the Secretary for a project under this title (or under 
this Act, as in effect on the day before the date of enactment of the 
Economic Development Partnership Act of 1998), and after the grant has 
been made but before completion of the project, the purpose or scope of 
the project that was the basis of the grant has changed, the Secretary 
may approve the use of grant funds for the changed project if the 
Secretary determines that the changed project meets the requirements of 
this title and that the changes are necessary to enhance economic 
development in the area.

``SEC. 212. USE OF FUNDS IN PROJECTS CONSTRUCTED UNDER PROJECTED COST.

  ``In any case in which a grant (including a supplemental grant) has 
been made by the Secretary under this title (or under this Act, as in 
effect on the day before the date of enactment of the Economic 
Development Partnership Act of 1998) for a construction project, and 
after the grant has been made but before completion of the project, the 
cost of the project (based upon the designs and specifications that 
were the basis of the grant) has decreased because of decreases in 
costs, the underrun funds may be used to improve the project either 
directly or indirectly, as determined by the Secretary.

``SEC. 213. BASE CLOSINGS AND REALIGNMENTS.

  ``(a) Location of Projects.--In any case in which the Secretary 
determines there is a need for assistance under this title due to the 
closure or realignment of a military installation or a Department of 
Energy defense-related installation, the Secretary may make such 
assistance available for projects to be carried out on the installation 
and for projects to be carried out in communities adversely affected by 
the closure or realignment.
  ``(b) Interest in Property.--Notwithstanding any other provision of 
law, the Secretary may provide to an eligible recipient any assistance 
made available under this Act for a project to be carried out on a 
military installation, or a Department of Energy defense-related 
installation, that is closed or scheduled for closure or realignment 
without requiring the eligible recipient to have title to the property 
or a leasehold interest in the property for any specified term.

``SEC. 214. PREVENTION OF UNFAIR COMPETITION.

  ``Financial assistance under this Act may not be extended to any 
project if--
          ``(1) the assistance would result in an increase in the 
        production of goods, materials, or commodities, or the 
        availability of services or facilities; and
          ``(2) there is not sufficient demand for such goods, 
        materials, commodities, services, or facilities to employ the 
        efficient capacity of existing competitive commercial or 
        industrial enterprises.

``SEC. 215. SALE OF FINANCIAL INSTRUMENTS IN REVOLVING LOAN FUNDS.

  ``Any loan, loan guarantee, equity, or other financial instrument in 
the portfolio of a revolving loan fund, including any financial 
instrument made available using amounts from a grant made before the 
date of enactment of the Economic Development Partnership Act of 1998, 
may be sold, encumbered, or pledged at the discretion of the grantee of 
the fund, to a third party provided that the net proceeds of the 
transaction--
          ``(1) shall be deposited into the fund and may only be used 
        for activities which are consistent with the purposes of this 
        title; and
          ``(2) shall be subject to the financial management, 
        accounting, reporting, and auditing standards which were 
        applicable to the original grant.

``SEC. 216. REPORTS BY RECIPIENT.

  ``(a) In General.--The Secretary shall require all recipients of 
assistance under this Act to submit reports to the Secretary.
  ``(b) Requirements.--Reports under subsection (a) shall--
          ``(1) be submitted at such intervals and in such manner as 
        the Secretary shall prescribe by regulation, not to exceed 10 
        years from the time of closeout of the assistance award; and
          ``(2) contain an evaluation of the effectiveness of the 
        economic assistance provided under this Act in meeting the need 
        the assistance was designed to alleviate and the purposes of 
        this Act.
  ``(c) Revolving Loan Funds.--
          ``(1) In general.--Except as provided by paragraph (2), 
        reports of the activities of a revolving loan fund may be 
        required at such intervals as may be provided by regulation.
          ``(2) Limitation.--After final disbursements of assistance to 
        establish a revolving loan fund (including assistance provided 
        before the date of enactment of the Economic Development 
        Partnership Act of 1998), reports of activities of the 
        revolving loan fund may not be required more frequently than 
        annually.

   ``TITLE III--DEFINITIONS, ELIGIBILITY, AND COMPREHENSIVE ECONOMIC 
                         DEVELOPMENT STRATEGIES

``SEC. 301. DEFINITIONS.

  ``In this Act, the following definitions apply:
          ``(1) Economic development district.--The term `economic 
        development district' means an area in the United States 
        composed of cooperating areas described in section 302(a) and, 
        where appropriate, designated economic development centers and 
        neighboring counties or communities, that has been designated 
        by the Secretary as an economic development district. The term 
        includes any economic development district designated by the 
        Secretary under section 403 of this Act, as in effect on the 
        day before the date of enactment of the Economic Development 
        Partnership Act of 1998.
          ``(2) Economic development center.--The term `economic 
        development center' means an area in the United States that has 
        been identified as an economic development center in an 
        approved comprehensive economic development strategy and that 
        has been designated by the Secretary as eligible for financial 
        assistance under this Act in accordance with the provisions of 
        this Act.
          ``(3) Eligible recipient.--The term `eligible recipient' 
        means--
                  ``(A) an area described in section 302(a);
                  ``(B) an economic development district designated 
                under section 401;
                  ``(C) an Indian tribe, a State, a city or other 
                political subdivision of a State, or a consortium of 
                such political subdivisions;
                  ``(D) an institution of higher education or a 
                consortium of such institutions; or
                  ``(E) a public or private nonprofit organization or 
                association acting in cooperation with officials of 
                such political subdivision.
        For grants made under section 207, the term also includes 
        private individuals and for-profit organizations.
          ``(4) Grant.--The term `grant' includes a cooperative 
        agreement, as that term is used in the Federal Grant and 
        Cooperative Agreement Act of 1977.
          ``(5) Indian tribe.--The term `Indian tribe' means any Indian 
        tribe, band, nation, pueblo, or other organized group or 
        community, including any Alaska Native village or regional 
        corporation as defined in or established pursuant to the Alaska 
        Native Claims Settlement Act, which is recognized as eligible 
        for the special programs and services provided by the United 
        States to Indians because of their status as Indians.
          ``(6) Secretary.--The term `Secretary' means the Secretary of 
        Commerce.
          ``(7) State.--The terms `State', `States', and `United 
        States' include the several States, the District of Columbia, 
        the Commonwealth of Puerto Rico, the Virgin Islands, Guam, 
        American Samoa, the Republic of the Marshall Islands, the 
        Federated States of Micronesia, the Republic of Palau, and the 
        Commonwealth of the Northern Mariana Islands.

``SEC. 302. AREA ELIGIBILITY.

  ``(a) Certification.--In order to be eligible for assistance under 
section 201 or 209, a project shall serve an area that meets 1 or more 
of the following criteria:
          ``(1) The area has a per capita income of 80 percent or less 
        of the national average.
          ``(2) The area has an unemployment rate that is at least 1 
        percent above the national average percentage for the most 
        recent 24-month period for which statistics are available.
          ``(3) The area is determined by the Secretary to have 
        experienced, or to be reasonably foreseen as about to 
        experience, a special need to meet an expected rise in 
        unemployment or other economic adjustment problem (including 
        those caused by any action or decision of the Federal 
        Government).
          ``(4) The area is determined by the Secretary to be a pocket 
        of poverty or high unemployment within a larger community of 
        less economic distress and has demonstrated a resistance to 
        economic recovery without assistance under this Act.
  ``(b) Documentation.--An applicant for assistance for a project under 
section 201 or 209 shall document, as part of an application for the 
assistance, the eligibilty of the project under the criteria of 
subsection (a) by using Federal data, when available, or, in the 
absence of recent Federal data, by using data available through the 
State government. An area meeting the criteria of subsection (a), 
including a pocketof poverty or high unemployment within a larger 
community of less economic distress, may be defined without regard to 
political or other boundaries.
  ``(c) Prior Designations.--Any designation of a redevelopment area 
made before the date of enactment of the Economic Development 
Partnership Act of 1998 shall not be effective after such date.

``SEC. 303. COMPREHENSIVE ECONOMIC DEVELOPMENT STRATEGY.

  ``(a) In General.--The Secretary may provide assistance under section 
201 or 209 (except planning assistance under section 209) to an 
applicant for a project only if the applicant submits to the Secretary, 
as part of an application for the assistance, a comprehensive economic 
development strategy that--
          ``(1) identifies the economic development problems to be 
        addressed using the assistance;
          ``(2) identifies past, present, and projected future economic 
        development investments in the area receiving the assistance 
        and public and private participants and sources of funding for 
        the investments; and
          ``(3) sets forth a strategy for addressing the economic 
        problems identified pursuant to paragraph (1) and describes how 
        the strategy will solve the problems.
  ``(b) Other Plan.--The Secretary may accept as a comprehensive 
economic development strategy a satisfactory plan prepared under 
another Federally supported program.

               ``TITLE IV--ECONOMIC DEVELOPMENT DISTRICTS

``SEC. 401. DESIGNATION OF ECONOMIC DEVELOPMENT DISTRICTS AND ECONOMIC 
                    DEVELOPMENT CENTERS.

  ``(a) In General.--In order that economic development projects of 
broader geographic significance may be planned and carried out, the 
Secretary may take the actions authorized by this section.
  ``(b) Designation of Economic Development Districts.--The Secretary 
may designate appropriate `economic development districts' within the 
United States with the concurrence of the States in which such 
districts will be wholly or partially located, if--
          ``(1) the proposed district is of sufficient size or 
        population, and contains sufficient resources, to foster 
        economic development on a scale involving more than a single 
        area described in section 302(a);
          ``(2) the proposed district contains at least 1 area 
        described in section 302(a);
          ``(3) the proposed district contains 1 or more areas 
        described in section 302(a) or economic development centers 
        identified in an approved district comprehensive economic 
        development strategy as having sufficient size and potential to 
        foster the economic growth activities necessary to alleviate 
        the distress of the areas described in section 302(a) within 
        the district; and
          ``(4) the proposed district has a district comprehensive 
        economic development strategy that--
                  ``(A) includes sustainable development and adequate 
                land use and transportation planning;
                  ``(B) contains a specific program for district 
                cooperation, self-help, and public investment; and
                  ``(C) is approved by the State or States affected and 
                by the Secretary.
  ``(c) Designation of Economic Development Centers.--The Secretary may 
designate as `economic development centers', under regulations to be 
issued by theSecretary, areas that the Secretary considers appropriate, 
if--
          ``(1) the proposed center has been identified and included in 
        an approved district comprehensive economic development 
        strategy and recommended by the State or States affected for 
        such special designation;
          ``(2) the proposed center is geographically and economically 
        so related to the district that its economic growth may 
        reasonably be expected to contribute significantly to the 
        alleviation of distress in the areas described in section 
        302(a) of the district; and
          ``(3) the proposed center does not have a population in 
        excess of 250,000 according to the most recent Federal census.
  ``(d) Provision of Financial Assistance.--The Secretary may provide 
financial assistance in accordance with the criteria of this Act, 
except as otherwise expresslyprovided, for projects in economic 
development centers designated under subsection (c), if--
          ``(1) the project will further the objectives of the 
        comprehensive economic development strategy of the district in 
        which the project will be located;
          ``(2) the project will enhance the economic growth potential 
        of the district or result in additional long-term employment 
        opportunities commensurate with the amount of Federal financial 
        assistance requested; and
          ``(3) the amount of Federal financial assistance requested is 
        reasonably related to the size, population, and economic needs 
        of the district.
  ``(e) Authorities.--The Secretary may, under regulations to be issued 
by the Secretary--
          ``(1) invite the several States to draw up proposed economic 
        development district boundaries and to identify potential 
        economic development centers;
          ``(2) encourage the States to consult with appropriate local 
        governmental authorities in the proposal of economic 
        development district boundaries or their modification;
          ``(3) cooperate with the several States--
                  ``(A) in sponsoring and assisting district economic 
                planning and development groups; and
                  ``(B) in assisting such district groups to formulate 
                district comprehensive economic development strategies; 
                and
          ``(4) encourage participation by appropriate local 
        governmental authorities in such economic development 
        districts.

``SEC. 402. TERMINATION OR MODIFICATION.

  ``The Secretary shall issue regulations to prescribe standards for 
the termination or modification of economic development districts and 
economic development centers designated under the authority of section 
401.

``SEC. 403. BONUS.

  ``Subject to the 20 percent non-Federal share requirement of section 
205(b)(1), the Secretary may increase the amount of grant assistance 
authorized by sections 204 and 205 for projects within designated 
economic development districts by an amount not to exceed 10 percent of 
the aggregate cost of the project, in accordance with regulations to be 
issued by the Secretary, if--
          ``(1) the project applicant is actively participating in the 
        economic development activities of the district; and
          ``(2) the project is consistent with an approved district 
        comprehensive economic development strategy.

``SEC 404. STRATEGY PROVIDED TO APPALACHIAN REGIONAL COMMISSION.

  ``An economic development district designated by the Secretary under 
this title shall ensure that a copy of the district's comprehensive 
economic development strategy is furnished to the Appalachian Regional 
Commission established under the Appalachian Regional Development Act 
of 1965 if any part of such district is within the Appalachian region.

``SEC. 405. PARTS NOT WITHIN AREAS DESCRIBED IN SECTION 302(A).

  ``The Secretary is authorized to provide financial assistance 
available to an area described in section 302(a) under this Act to 
those parts of an economic development district that are not within an 
area described in section 302(a), if the Secretary determines, in 
writing, that the assistance will be of a substantial direct benefit to 
an area described in section 302(a) within such district. Such 
financial assistance shall be provided in the same manner and to the 
same extent as is provided in this Act for an area described in section 
302(a).

                       ``TITLE V--ADMINISTRATION

``SEC. 501. UNDER SECRETARY OF COMMERCE FOR ECONOMIC DEVELOPMENT.

  ``(a) Appointment.--The Secretary shall administer this Act with 
assistance of an Under Secretary of Commerce for Economic Development 
to be appointed by the President by and with the advice and consent of 
the Senate.
  ``(b) Duties.--The Under Secretary of Commerce for Economic 
Development shall perform such functions as the Secretary may prescribe 
and will serve as the administrator of the Economic Development 
Administration within the Department of Commerce.

``SEC. 502. OFFICE OF ECONOMIC DEVELOPMENT INFORMATION.

  ``(a) Establishment.--The Secretary shall establish in the Economic 
Development Administration an Office of Economic Development 
Information (hereinafter in this section referred to as the `Office').
  ``(b) Duties.--The Office shall--
          ``(1) serve as a central information clearinghouse on matters 
        relating to economic development programs and activities of the 
        Federal Government and State governments, including political 
        subdivisions of States;
          ``(2) help potential and actual applicants for economic 
        development assistance under Federal, State, and local laws in 
        locating and applying for such assistance, including financial 
        and technical assistance; and
          ``(3) develop electronic links or other connections to 
        information databases provided by Federal departments and 
        agencies, State and local governmental agencies, public and 
        private entities, and individuals to assist other such 
        agencies, entities, and individuals in the process of 
        identifying and applying for assistance and resources under 
        economic development programs and activities of the Federal, 
        State, and local governments.
  ``(c) Electronic Links and Connections.--The databases to which the 
Office shall develop electronic links or other connections shall 
include the following kinds of information:
          ``(1) Relevant information concerning available economic 
        development programs of the Federal Government, including key 
        contact personnel, descriptions of the application process, 
        eligibility requirements and criteria, selection and follow-up 
        procedures, and other such relevant information.
          ``(2) Relevant information concerning major State and local 
        governmental economic development programs, including lists of 
        appropriate offices, officers, and contact personnel connected 
        with, or involved in, such programs.
          ``(3) Relevant and available economic data and trends, 
        including information about the national, regional, and local 
        impacts of trade agreements, defense spending and downsizing, 
        technological change, and other sources of substantial economic 
        dislocation.
          ``(4) Case studies and best practices in economic 
        development, adjustment, and reinvestment.
          ``(5) Technology utilization programs, assistance, and 
        resources.
          ``(6) Compilations of published works (including 
        bibliographies, books, reports, articles, videos, and tapes), 
        and selected texts of such works, related to all facets of 
        economic development.
          ``(7) Information concerning current revolving loan fund 
        programs and finance programs directly related to economic 
        development objectives.
          ``(8) Resources that assist in identifying potential sources 
        of capital for businesses, including revolving loan funds, 
        venture capital, and other capital tools.
          ``(9) Resources, including geographic information systems, 
        that assist economic developers in understanding and pursuing 
        sustainable development and initiatives.
  ``(d) Public Access to Data Services.--The Office shall establish the 
means to ensure easy access by the public to the Office's information 
clearinghouse, and shall take all appropriate steps to ensure that the 
clearinghouse and its resources are as accessible and user-friendly as 
possible. As soon as practicable, and until replaced by a means 
determined by the Secretary to be more effective in accomplishing the 
purposes of this section, access to the data services of the Office 
shall include each of the following means:
          ``(1) An Internet web site, with sorted key locations by 
        economic development related topic, for users to access lists 
        of various Governmentwide and other economic development web 
        site resources.
          ``(2) A toll-free nationwide telephone number to provide 
        direct phone access to the public.
          ``(3) On-line electronic access through existing computer 
        network services and publicly available computer database 
        access facilities.
          ``(4) Printed manuals and orientation materials.
          ``(5) Periodic orientation workshops available to the public.
          ``(6) On-call information specialists to address special 
        problems requiring person-to-person assistance.
  ``(e) Coordination With Other Federal Departments and Agencies.--The 
Secretary shall enter into such agreements and understandings as may be 
necessary with other Federal departments and agencies to coordinate the 
accomplishment of the objectives of this section.
  ``(f) Economic Development Defined.--In this section, the term 
`economic development' includes economic adjustment, disaster recovery, 
industrial retention, and defense reinvestment.

``SEC. 503. CONSULTATION WITH OTHER PERSONS AND AGENCIES.

  ``(a) Consultation on Problems Relating to Employment.--The Secretary 
may confer with any persons, including representatives of labor, 
management, agriculture, and government, who can assist in meeting the 
problems of area and regional unemployment.
  ``(b) Consultation on Administration of Act.--The Secretary may make 
provisions for such consultation with interested departments and 
agencies as the Secretary may deem appropriate in the performance of 
the functions vested in the Secretary by this Act.

``SEC. 504. ADMINISTRATION, OPERATION, AND MAINTENANCE.

  ``Federal assistance may not be approved under this Act unless the 
Secretary is satisfied that the project for which the Federal 
assistance is to be granted will be properly and efficiently 
administered, operated, and maintained.

``SEC. 505. FIRMS DESIRING FEDERAL CONTRACTS.

  ``The Secretary may furnish the procurement divisions of the various 
departments, agencies, and other instrumentalities of the Federal 
Government with a list--
          ``(1) containing the names and addresses of business firms 
        that are located in areas of high economic distress and are 
        seeking Government contracts for the furnishing of supplies or 
        services; and
          ``(2) designating the supplies and services that the firms 
        provide.

``SEC. 506. AMENDMENTS TO TITLE 5, U.S.C.

  ``Title 5, United States Code, is amended--
          ``(1) in section 5314 by inserting `, Under Secretary of 
        Commerce for Economic Development,' after `Under Secretary of 
        Commerce for Export Administration'; and
          ``(2) in section 5316 by striking `Administrator for Economic 
        Development.'.

``SEC. 507. NOTIFICATION OF REORGANIZATION.

  ``The Secretary shall notify the Committees on Transportation and 
Infrastructure and on Appropriations of the House of Representatives 
and the Committees on Environment and Public Works and on 
Appropriations of the Senate of any reorganization of the offices, 
programs, or activities of the Economic Development Administration on 
or before the 30th day preceding the date of the reorganization.

``SEC. 508. PERFORMANCE EVALUATIONS OF GRANT RECIPIENTS.

  ``(a) In General.--The Secretary shall conduct an evaluation of each 
university center and economic development district receiving grant 
assistance under this Act to assess the grantee's performance and 
contribution toward job retention and creation. Evaluations shall be 
conducted on a continuing basis so that each grantee will be evaluated 
within 3 years after the first award of assistance to the grantee after 
the date of enactment of the Economic Development Partnership Act of 
1998, and at least once every 3 years thereafter, so long as the 
grantee continues to receive such assistance.
  ``(b) Criteria.--
          ``(1) Establishment.--The Secretary shall establish criteria 
        for use in conducting evaluations under subsection (a).
          ``(2) Criteria for university centers.--The criteria for 
        evaluation of a university center shall, at a minimum, provide 
        for an assessment of the center's contribution to providing 
        technical assistance, conducting applied research, and 
        disseminating results of the center's activities.
          ``(3) Criteria for economic development districts.--The 
        criteria for evaluation of an economic development district 
        shall, at a minimum, provide for an assessment of management 
        standards, financial accountability, and program performance.
  ``(c) Peer Review.--In conducting an evaluation of a university 
center or economic development district under subsection (a), the 
Secretary shall provide for the participation of at least one other 
university center or economic development district, as appropriate, on 
a cost-reimbursement basis.

``SEC. 509. COORDINATION.

  ``(a) In General.--The Secretary shall actively coordinate with other 
Federal programs, States, economic development districts, and other 
appropriate planningand development organizations the activities 
relating to the requirements for comprehensive economic development 
strategies and making grants under this Act.
  ``(b) Federal Coordinating Council for Economic Development.--
          ``(1) In general.--The Secretary shall establish a Federal 
        Coordinating Council for Economic Development.
          ``(2) Composition of council.--The Council shall be composed 
        of representatives from Federal agencies involved in matters 
        that affect regional economic development.
          ``(3) Duties.--The Council shall assist in providing a 
        unifying framework for economic and regional development 
        efforts and develop a Governmentwide strategic plan for 
        economic development.

``SEC. 510. ECONOMIC DEVELOPMENT REVOLVING LOAN FUND TASK FORCE.

  ``(a) Establishment.--The Secretary of Commerce shall establish, 
within the Department of Commerce, an Economic Development Revolving 
Loan Fund Task Force.
  ``(b) Membership.--The members of the Task Force shall include, at a 
minimum, representatives of--
          ``(1) the Economic Development Administration;
          ``(2) the Office of Inspector General of the Department of 
        Commerce;
          ``(3) current operators of revolving loan funds established 
        with assistance provided under the Public Works and Economic 
        Development Act of 1965; and
          ``(4) economic development organizations.
  ``(c) Duties.--The Task Force shall review the financial management, 
accounting, reporting, and auditing standards and requirements of 
revolving loan funds described in subsection (b)(3).
  ``(d) Recommendations.--Based upon its review, the Task Force shall 
make recommendations to the Secretary to better streamline and lessen 
revolving loan fund reporting requirements.

                       ``TITLE VI--MISCELLANEOUS

``SEC. 601. POWERS OF SECRETARY.

  ``(a) In General.--In performing the Secretary's duties under this 
Act, the Secretary is authorized to take the following actions:
          ``(1) To adopt, alter, and use a seal, which shall be 
        judicially noticed.
          ``(2) Subject to the civil-service and classification laws, 
        to select, employ, appoint, and fix the compensation of such 
        personnel as may be necessary to carry out the provisions of 
        this Act.
          ``(3) To hold such hearings, sit and act at such times and 
        places, and take such testimony, as the Secretary may deem 
        advisable.
          ``(4) To request directly from any executive department, 
        bureau, agency, board, commission, office, independent 
        establishment, or instrumentality information, suggestions, 
        estimates, and statistics needed to carry out the purposes of 
        this Act. Each department, bureau, agency, board, commission, 
        office, establishment, or instrumentality is authorized to 
        furnish such information, suggestions, estimates, and 
        statistics directly to the Secretary.
          ``(5) Under regulations prescribed by the Secretary, to 
        assign or sell at public or private sale, or otherwise dispose 
        of for cash or credit, in the Secretary's discretion and upon 
        such terms and conditions and for such consideration as the 
        Secretary determines to be reasonable, any evidence of debt, 
        contract, claim, personal property, or security assigned to or 
        held by the Secretary in connection with assistance extended 
        under the Act, and to collect or compromise all obligations 
        assigned to or held by the Secretary in connection with such 
        assistance until such time as such obligations may be referred 
        to the Attorney General for suit or collection.
          ``(6) To deal with, complete, renovate, improve, modernize, 
        insure, rent, or sell for cash or credit, upon such terms and 
        conditions and for such consideration as the Secretary 
        determines to be reasonable, any real or personal property 
        conveyed to or otherwise acquired by the Secretary in 
        connection with assistance extended under this Act.
          ``(7) To pursue to final collection, by way of compromise or 
        other administrative action, prior to reference to the Attorney 
        General, all claims against third parties assigned to the 
        Secretary in connection with assistance extended under this 
        Act.
          ``(8) To acquire, in any lawful manner, any property (real, 
        personal, or mixed, tangible or intangible), whenever necessary 
        or appropriate in connection with assistance extended under 
        this Act.
          ``(9) In addition to any powers, functions, privileges, and 
        immunities otherwise vested in the Secretary, to take any 
        action, including the procurement of the services of attorneys 
        by contract, determined by the Secretary to be necessary or 
        desirable in making, purchasing, servicing, compromising, 
        modifying, liquidating, or otherwise administratively dealing 
        with assets held in connection with financial assistance 
        extended under this Act.
          ``(10) To employ experts and consultants or organizations as 
        authorized by section 3109 of title 5, United States Code, 
        compensate individuals so employed, including travel time, and 
        allow them, while away from their homes or regular places of 
        business, travel expenses (including per diem in lieu of 
        subsistence) as authorized by section 5703 of title 5, United 
        States Code, for persons in the Government service employed 
        intermittently, while so employed, except that contracts for 
        such employment may be renewed annually.
          ``(11) To establish performance measures for grants and other 
        assistance provided under this Act, and use such performance 
        measures to evaluate the economic impact of economic 
        development assistance programs. The establishment and use of 
        such performance measures shall be provided by the Secretary 
        through members of the Secretary's staff, through the 
        employment of appropriate parties under contracts entered into 
        for such purposes, or through grants to such parties for such 
        purposes, using any funds made available by appropriation to 
        carry out this Act.
          ``(12) To conduct environmental reviews and incur necessary 
        expenses to evaluate and monitorthe environmental impact of 
economic development assistance provided and proposed to be provided 
under this Act, including costs associated with the representation and 
defense of actions of the Secretary related to the environmental impact 
of such assistance, using any funds made available by appropriation to 
carry out section 207 of this Act.
          ``(13) To sue and be sued in any court of record of a State 
        having general jurisdiction or in any United States district 
        court. Jurisdiction is conferred upon such district court to 
        determine such controversies without regard to the amount in 
        controversy, but no attachment, injunction, garnishment, or 
        other similar process, mesne or final, shall be issued against 
        the Secretary or the Secretary's property.
          ``(14) To establish such rules, regulations, and procedures 
        as the Secretary considers appropriate in carrying out the 
        provisions of this Act.
  ``(b) Deficiency Judgments.--The authority under subsection (a)(7) to 
pursue claims shall include the authority to obtain deficiency 
judgments or otherwise in the case of mortgages assigned to the 
Secretary.
  ``(c) Inapplicability of Certain Other Requirements.--Section 3709 of 
the Revised Statutes of the United States shall not apply to any 
contract of hazard insurance or to any purchase or contract for 
services or supplies on account of property obtained by the Secretary 
as a result of assistance extended under this Act if the premium for 
the insurance or the amount of the insurance does not exceed $1,000.
  ``(d) Property Interests.--The powers of the Secretary, pursuant to 
this section, in relation to property acquired by the Secretary in 
connection with assistance extended under this Act, shall extend to 
property interests of the Secretary in relation to projects approved 
under the Public Works and Economic Development Act of 1965, title I of 
the Public Works Employment Act of 1976, title II of the Trade Act of 
1974, and the Community Emergency Drought Relief Act of 1977.
  ``(e) Powers of Conveyance and Execution.--The power to convey and to 
execute, in the name of the Secretary, deeds of conveyance, deeds of 
release, assignments and satisfactions of mortgages, and any other 
written instrument relating to real or personal property or any 
interest therein acquired by the Secretary pursuant to the provisions 
of this Act may be exercised by the Secretary, or by any officer or 
agent appointed by the Secretary for such purpose, without the 
execution of any express delegation of power or power of attorney.

``SEC. 602. MAINTENANCE OF STANDARDS.

  ``The Secretary shall continue to implement and enforce the 
provisions of section 712 of this Act, as in effect on the day before 
the date of enactment of the Economic Development Partnership Act of 
1998.

``SEC. 603. ANNUAL REPORT TO CONGRESS.

  ``The Secretary shall transmit a comprehensive and detailed annual 
report to Congress on the Secretary's activities under this Act for 
fiscal year 1998 and eachfiscal year thereafter. Such report shall be 
printed and transmitted to Congress not later than July 1 of the year 
following the fiscal year with respect to which the report is to be 
made.

``SEC. 604. USE OF OTHER FACILITIES.

  ``(a) Delegation of Functions to Other Federal Departments and 
Agencies.--The Secretary may delegate to the heads of other departments 
and agencies of the Federal Government any of the Secretary's 
functions, powers, and duties under this Act as the Secretary may deem 
appropriate, and authorize the redelegation of such functions, powers, 
and duties by the heads of such departments and agencies.
  ``(b) Transfer Between Departments.--Funds authorized to be 
appropriated under this Act may be transferred between departments and 
agencies of the Government, if such funds are used for the purposes for 
which they are specifically authorized and appropriated.
  ``(c) Funds Transferred From Other Departments and Agencies.--In 
order to carry out the objectives of this Act, the Secretary may accept 
transfers of funds from other departments and agencies of the Federal 
Government if the funds are used for the purposes for which (and in 
accordance with the terms under which) the funds are specifically 
authorized and appropriated. Such transferred funds shall remain 
available until expended, and may be transferred to and merged with the 
appropriations under the heading `salaries and expenses' by the 
Secretary to the extent necessary to administer the program.

``SEC. 605. PENALTIES.

  ``(a) False Statements, Security Overvaluation.--Whoever makes any 
statement knowing it to be false, or whoever willfully overvalues any 
security, for the purpose of obtaining for such person or for any 
applicant any financial assistance under this Act or any extension of 
such assistance by renewal, deferment or action, or otherwise, or the 
acceptance, release, or substitution of security for such assistance, 
or for the purpose of influencing in any way the action of the 
Secretary or for the purpose of obtaining money, property, or anything 
of value, under this Act, shall be fined under title 18,United States 
Code, imprisoned for not more than 5 years, or both.
  ``(b) Embezzlement and Fraud-Related Crimes.--Whoever, being 
connected in any capacity with the Secretary in the administration of 
this Act--
          ``(1) embezzles, abstracts, purloins, or willfully misapplies 
        any moneys, funds, securities, or other things of value, 
        whether belonging to such person or pledged or otherwise 
        entrusted to such person;
          ``(2) with intent to defraud the Secretary or any other 
        politic or corporate, or any individual, or to deceive any 
        officer, auditor, or examiner, makes any false entry in any 
        book, report, or statement of or to the Secretary or without 
        being duly authorized draws any orders or issues, puts forth, 
        or assigns any note, debenture, bond, or other obligation, or 
        draft, bill of exchange, mortgage, judgment, or decree thereof;
          ``(3) with intent to defraud, participates or shares in or 
        receives directly or indirectly any money, profit, property, or 
        benefit through any transaction, loan, grant, commission, 
        contract, or any other act of the Secretary; or
          ``(4) gives any unauthorized information concerning any 
        future action or plan of the Secretary that might affect the 
        value of securities, or having such knowledge invests or 
        speculates, directly or indirectly, in the securities or 
        property of any company or corporation receiving loans, grants, 
        or other assistance from the Secretary, shall be fined under 
        title 18, United States Code, imprisoned for not more than 5 
        years, or both.

``SEC. 606. EMPLOYMENT OF EXPEDITERS AND ADMINISTRATIVE EMPLOYEES.

  ``Financial assistance may not be extended by the Secretary under 
this Act to any business enterprise unless the owners, partners, or 
officers of such business enterprise--
          ``(1) certify to the Secretary the names of any attorneys, 
        agents, and other persons engaged by or on behalf of such 
        business enterprise for the purpose of expediting applications 
        made to the Secretary for assistance of any sort, under this 
        Act, and the fees paid or to be paid to any such person; and
          ``(2) execute an agreement binding such business enterprise, 
        for a period of 2 years after such assistance is rendered by 
        the Secretary to such business enterprise, to refrain from 
        employing, tendering any office or employment to, or retaining 
        for professional services, any person who, on the date such 
        assistance or any part thereof was rendered, or within the 1-
        year period ending on such date, shall have served as an 
        officer, attorney, agent, or employee, occupying aposition or 
engaging in activities that the Secretary determines involves 
discretion with respect to the granting of assistance under this Act.

``SEC. 607. MAINTENANCE OF RECORDS OF APPROVED APPLICATIONS FOR 
                    FINANCIAL ASSISTANCE; PUBLIC INSPECTION.

  ``(a) Maintenance of Record Requires.--The Secretary shall maintain 
as a permanent part of the records of the Department of Commerce a list 
of applications approved for financial assistance under this Act that 
will be kept available for public Inspection during the regular 
business hours of the Department of Commerce.
  ``(b) Posting to List.--The following information shall be posted in 
such list as soon as each application is approved:
          ``(1) The name of the applicant and, in the case of corporate 
        applications, the names of the officers and directors thereof.
          ``(2) The amount and duration of the financial assistance for 
        which application is made.
          ``(3) The purposes for which the proceeds of the financial 
        assistance are to be used.

``SEC. 608. RECORDS AND AUDIT.

  ``(a) Recordkeeping and Disclosure Requirements.--Each recipient of 
assistance under this Act shall keep such records as the Secretary 
shall prescribe, including records that fully disclose the amount and 
the disposition by such recipient of the proceeds of such assistance, 
the total cost of the project or undertaking in connection with which 
such assistance is given or used, and the amount and nature of that 
portion of the cost of the project or undertaking supplied by other 
sources, and such other records as will facilitate an effective audit.
  ``(b) Access to Books for Examination and Audit.--The Secretary, the 
Inspector General of the Department of Commerce, and the Comptroller 
General of the United States, or any of their duly authorized 
representatives, shall have access for the purpose of audit and 
examination to any books, documents, papers, and records of the 
recipient that are pertinent to assistance received under this Act.

``SEC. 609. PROHIBITION AGAINST A STATUTORY CONSTRUCTION THAT MIGHT 
                    CAUSE DIMINUTION IN OTHER FEDERAL ASSISTANCE.

  ``All financial and technical assistance authorized under this Act 
shall be in addition to any Federal assistance previously authorized, 
and no provision of this Act may be construed as authorizing or 
permitting any reduction or diminution in the proportional amount of 
Federal assistance that any State or other entity eligible under this 
Act would otherwise be entitled to receive under the provisions of any 
other Act.

``SEC. 610. ACCEPTANCE OF APPLICANTS' CERTIFICATIONS.

  ``The Secretary may accept, when deemed appropriate, the applicants' 
certifications to meet the requirements of this Act.

                          ``TITLE VII--FUNDING

``SEC. 701. AUTHORIZATION OF APPROPRIATIONS.

  ``There is authorized to be appropriated to carry out this Act 
$368,000,000 for each of fiscal years 1999 through 2003. Such sums 
shall remain available until expended.

``SEC. 702. ADMINISTRATIVE EXPENSES.

  ``In addition to the appropriations authorized by section 701, there 
are authorized to be appropriated for administrative expenses of the 
Secretary in carrying out this Act such sums as may be necessary for 
each of fiscal years 1999 through 2003. Such sums shall remain 
available until expended.

``SEC. 703. DEFENSE CONVERSION ACTIVITIES.

  ``In addition to the appropriations authorized by section 701 for 
defense conversion activities, there are authorized to be appropriated 
to carry out this Act for eachof fiscal years 2000 through 2003 such 
sums as may be necessary to provide assistance for such activities. 
Such sums shall remain available until expended.''.

SEC. 102. SAVINGS PROVISIONS.

  (a) Existing Rights, Duties, and Obligations Not Affected.--This Act 
shall not be construed as affecting the validity of any right, duty, or 
obligation of the United States or any other person arising out of or 
pursuant to any contract, loan,or other instrument or agreement that 
was in effect on the day before the date of enactment of this Act.
  (b) Continuation of Suits.--No action or other proceeding commenced 
by or against any officer or employee of the Economic Development 
Administration shall abate by reason of the enactment of this Act.
  (c) Liquidating Account.--The Economic Development Revolving Fund 
established under section 203 of the Public Works and Economic 
Development Act of 1965 shall continue to be available to the Secretary 
as a liquidating account as defined under section 502 of the Federal 
Credit Reform Act of 1990 for payment of obligations and expenses in 
connection with financial assistance extended under this Act, the 
Public Works and Economic Development Act of 1965, the Area 
Redevelopment Act, and the Trade Act of 1974.
  (d) Administration.--The Secretary shall take such actions as 
authorized before the date of enactment of this Act as necessary or 
appropriate to administer and liquidate existing grants, contracts, 
agreements, loans, obligations, debentures, or guarantees heretofore 
made by the Secretary or the Secretary's delegate pursuant to 
provisions in effect immediately prior to the date of enactment of this 
Act.

            Subtitle B--Innovative Financing Pilot Programs

SEC. 121. PUBLIC WORKS LOAN GUARANTEES.

  (a) In General.--Upon the joint application of a private lending 
institution and a State, a political subdivision of a State, an Indian 
tribe, or a private or public nonprofit organization or association, 
the Secretary of Commerce is authorized to guarantee a loan made by the 
private lending institution to the State, political subdivision, Indian 
tribe, or organization or association for any purpose for which the 
Secretary can make a direct grant under section 201 of the Public Works 
and Economic Development Act of 1965.
  (b) Terms and Conditions.--A loan guarantee made for a project under 
this section shall be subject to such terms and conditions as the 
Secretary may prescribe. Such terms and conditions, at a minimum, shall 
include the following:
          (1) The guarantee may be made only if the Secretary finds 
        that the project meets the requirements of the Public Works and 
        Economic Development Act of 1965.
          (2) The guarantee may not at any time exceed 90 percent of 
        the amount of the outstanding balance of the loan.
          (3) The guarantee may be made only if financial assistance 
        for the project is not otherwise available from private lenders 
        or from other Federal sources on terms that the Secretary finds 
        are likely to permit accomplishment of the project.
          (4) The guarantee may be made only if the Secretary finds 
        that there is reasonable expectation of repayment of the loan.
          (5) The guarantee may not exceed 30 years.
  (c) Funding.--Not more than 10 percent of the amounts appropriated to 
carry out section 201 of the Public Works and Economic Development Act 
of 1965 for each of fiscal years 1999 through 2003 may be used to carry 
out this section.

SEC. 122. LOAN ASSISTANCE DEMONSTRATION PROGRAM.

  (a) In General.--The Secretary of Commerce shall carry out a program 
to demonstrate the effectiveness of encouraging economic development by 
making grants for reducing interest rates on loans for economic 
development activities. The Secretary shall carry out this section 
acting through the Under Secretary of Commerce for Economic 
Development.
  (b) Requirements.--Each recipient of a grant under the demonstration 
program shall--
          (1) use the grant amount to assist businesses and nonprofit 
        organizations by reducing interest rates on loans for economic 
        development activities by an amount not to exceed 60 percent of 
        the market rate of interest on any such loan; and
          (2) inform businesses and nonprofit organizations of the 
        availability of such loan interest rate reduction assistance.
  (c) Terms and Conditions.--In administering the demonstration 
program, the Secretary shall--
          (1) ensure that any project receiving assistance under this 
        section meets the requirements of the Public Works and Economic 
        Development Act of 1965 (42 U.S.C. 3121 et seq.);
          (2) establish criteria and procedures for selecting 
        recipients under the program with national geographic 
        diversity, ensuring representation of rural and urban areas;
          (3) establish requirements for implementation of the program 
        by recipients of assistance under the program; and
          (4) provide for the collection and reporting of information 
        sufficient to provide the basis for a determination of the 
        costs and effectiveness of the program.
  (d) Economic Development Activities Defined.--In this section, the 
term ``economic development activities'' means activities that--
          (1) are part of a project supported by grant assistance under 
        this Act; or
          (2) are supported by a loan from a revolving loan fund 
        established under this Act (including a fund established with 
        assistance provided before the date of enactment of the 
        Economic Development Partnership Act of 1998).
  (e) Funding.--Not more than 10 percent of the amounts appropriated to 
carry out section 209 of the Public Works and Economic Development Act 
of 1965 for each of fiscal years 1999 through 2003 may be used to carry 
out this section.

SEC. 123. LAND CONVEYANCE.

  (a) In General.--The Secretary of Commerce shall convey, at fair 
market value (as determined by the Secretary), to the city of Two 
Harbors, Minnesota, or its designee, the parcel of land described in 
subsection (b).
  (b) Land Description.--The parcel of land referred to in subsection 
(a) consists of approximately 21.55 acres known as the J and J Casting 
site, in Lake County, Minnesota, together with a road easement, all as 
described in the deed of the United States Marshal, dated March 22, 
1988, executed pursuant to the order of sale of the United States 
District Court for the District of Minnesota, dated May 15, 1987, in 
case Civil No. 5-86-300.
  (c) Delegation of Authority.--The Secretary shall carry out this 
section acting through the Under Secretary of Commerce for Economic 
Development.

SEC. 124. REPORTS.

  (a) Annual Report.--Not later than September 30 of each of fiscal 
years 1999 through 2003, the Secretary of Commerce shall transmit to 
Congress a report containing an evaluation of the effectiveness of loan 
guarantees and grants made under this subtitle.
  (b) Long-Term Program.--
          (1) Study.--The Secretary shall conduct a study regarding the 
        effects and costs of carrying out a long-term and expanded 
        program for guaranteeing loans and making grants under this 
        subtitle, including a determination of national scope.
          (2) Reports.--Not later than September 30, 2001, the 
        Secretary shall transmit to Congress a report containing the 
        results of the study conducted under paragraph (1), together 
        with any recommendations for carrying out an effective 
        demonstration program of national scope under this subtitle.

SEC. 125. COMPLIANCE WITH BUY AMERICAN ACT.

  None of the funds made available to carry out this Act, or any 
amendment made by this Act, may be expended in violation of the 
provisions of sections 2 through 4 of the Act of March 3, 1933 (41 
U.S.C. 10a-10c; popularly know as the ``Buy American Act'') that are 
applicable to those funds. The Secretary of Commerce shall provide each 
recipient of such funds notice of the requirements specified in this 
section and information on methods to comply with such requirements.

               TITLE II--APPALACHIAN REGIONAL DEVELOPMENT

SEC. 201. AMENDMENT OF APPALACHIAN REGIONAL DEVELOPMENT ACT OF 1965.

  Except as otherwise expressly provided, whenever in this title an 
amendment or repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the reference shall be considered to 
be made to a section or other provision of the Appalachian Regional 
Development Act of 1965 (40 U.S.C. App. 1 et seq.).

SEC. 202. FINDINGS AND PURPOSES.

  Section 2 (40 U.S.C. App. 2) is amended by adding at the end the 
following:
  ``(c) 1998 Findings and Purposes.--The Congress further finds and 
declares that, while substantial progress has been made in fulfilling 
many of the objectivesof this Act, rapidly changing national and global 
economies over the past decade have created new problems and challenges 
for rural areas throughout the Nation and especially for the 
Appalachian region. It is, therefore, also the purpose of this Act to 
assist the region in providing the infrastructure necessary for 
economic and human resource development, in developing its industry, in 
building entrepreneurial communities, in generating a diversified 
regional economy, and in making its industrial and commercial resources 
more competitive in national and world markets. It is further the 
purpose of this Act to provide a framework for coordinating Federal, 
State, and local initiatives to respond to the economic competitive 
challenge through improving the skills of the region's workforce, 
adapting and applying new technologies for the region's businesses, and 
improving the access of the region's businesses to the technical and 
financial resources necessary to their development. Finally, it is the 
purpose of this Act to address the needs of severely and persistently 
distressed areas of the region and focus special attention on the areas 
of greatest need so as to provide a fairer opportunity for the people 
of the region to share the quality of life generally enjoyed by 
citizens across this Nation.''.

SEC. 203. MEETINGS.

  (a) Annual Meeting Requirement.--Section 101(a) (40 U.S.C. App. 
101(a)) is amended by adding at the end the following: ``The Commission 
shall conduct at least one meeting each year with the Federal 
Cochairman and at least a majority of the State members present.''.
  (b) Additional Meetings by Electronic Means.--Section 101 (40 U.S.C. 
App. 101) is amended--
          (1) in subsection (a), as amended by subsection (a) of this 
        section, by adding at the end the following: ``The Commission 
        may conduct such additional meetings by electronic means as the 
        Commission considers advisable, including meetings to decide 
        matters requiring an affirmative vote.''; and
          (2) in subsection (c) by striking ``to be present'' at the 
        end of the fourth sentence.
  (c) Decisions Requiring a Quorum.--Section 101(b) (40 U.S.C. App. 
101(b)) is amended by striking the third sentence and inserting the 
following: ``No decision involving Commission policy, approval of 
State, regional, or subregional development plans or implementing 
investment programs, any modification or revision of the Appalachian 
Regional Commission Code, any allocation of funds among the State, or 
any designation of a distressed county or an economically strong county 
may be made without a quorum of State members.''.

SEC. 204. ADMINISTRATIVE EXPENSES.

  Section 105 (40 U.S.C. App. 105) is amended--
          (1) by striking ``(a) For the period'' and all that follows 
        through ``such expenses'' the first place it appears and 
        inserting ``Administrative expenses of the Commission''; and
          (2) by striking subsection (b).

SEC. 205. COMPENSATION OF EMPLOYEES.

  Section 106(2) (40 U.S.C. App. 106(2)) is amended by striking ``the 
salary of the alternate to the Federal Co-Chairman on the Commission as 
provided in section 101'' and inserting ``the maximum rate for the 
Senior Executive Service under section 5382 of title 5, United States 
Code, including any applicable locality-based comparability payment 
that may be authorized under section 5304(h)(2)(c) of such title 5''.

SEC. 206. ADMINISTRATIVE POWERS OF COMMISSION.

  Section 106(7) (40 U.S.C. App. 106(7)) is amended by striking 
``1982'' and inserting ``2003''.

SEC. 207. COST SHARING OF DEMONSTRATION HEALTH PROJECTS.

  (a) Operation Costs.--Section 202(c) (40 U.S.C. App. 202(c)) is 
amended in the first sentence by striking ``100 per centum of the costs 
thereof'' and all that follows through the period at the end of the 
second sentence and inserting ``50 percent of the costs thereof (or 80 
percent of such costs in the case of a project to be carried out in a 
county for which a distressed county designation is in effect under 
section 226).''.
  (b) Cost Sharing.--Section 202 (40 U.S.C. App. 202) is amended by 
adding at the end the following:
  ``(f) Maximum Commission Contribution After September 30, 1998.--
After September 30, 1998, not more than 50 percent of any project cost 
eligible for financial assistance under this section may be provided 
from funds appropriated to carry out this Act; except that such maximum 
Commission contribution may be increasedto 80 percent, or to the 
percentage of the maximum Federal contribution authorized by this 
section, whichever is less, for a project to be carried out in a county 
for which a distressed county designation is in effect under section 
226.''.

SEC. 208. REPEAL OF LAND STABILIZATION, CONSERVATION, AND EROSION 
                    CONTROL PROGRAM.

  Section 203 (40 U.S.C. App. 203) is repealed.

SEC. 209. REPEAL OF TIMBER DEVELOPMENT PROGRAM.

  Section 204 (40 U.S.C. App. 204) is repealed.

SEC. 210. REPEAL OF MINING AREA RESTORATION PROGRAM.

  Section 205 (40 U.S.C. App. 205) is repealed.

SEC. 211. REPEAL OF WATER RESOURCE SURVEY.

  Section 206 (40 U.S.C. App. 206) is repealed.

SEC. 212. COST SHARING OF HOUSING PROJECTS.

  (a) Loans.--Section 207(b) (40 U.S.C. App. 207(b)) is amended by 
striking ``80 per centum'' and inserting ``50 percent (or 80 percent in 
the case of a project to be carried out in a county for which a 
distressed county designation is in effect under section 226)''.
  (b) Grants.--Section 207(c)(1) (40 U.S.C. 207(c)(1)) is amended by 
striking ``80 per centum'' and inserting ``50 percent (or 80 percent in 
the case of a project to be carried out in a county for which a 
distressed county designation is in effect under section 226)''.

SEC. 213. REPEAL OF AIRPORT SAFETY IMPROVEMENTS PROGRAM.

  Section 208 (40 U.S.C. App. 208) is repealed.

SEC. 214. COST SHARING OF VOCATIONAL EDUCATION AND EDUCATION 
                    DEMONSTRATION PROJECTS.

  (a) Operation Costs.--Section 211(b)(3) (40 U.S.C. App. 211(b)(3)) is 
amended in the first sentence by striking ``100 per centum of the costs 
thereof'' and all that follows through the period at the end of the 
second sentence and inserting ``50 percent of the costs thereof (or 80 
percent of such costs in the case of a project to be carried out in a 
county for which a distressed county designation is in effect under 
section 226).''
  (b) Cost Sharing.--Section 211 (40 U.S.C. App. 211) is amended by 
adding at the end the following:
  ``(c) Maximum Commission Contribution After September 30, 1998.--
After September 30, 1998, not more than 50 percent of any project cost 
eligible for financial assistance under this section may be provided 
from funds appropriated to carry out this Act; except that such maximum 
Commission contribution may be increased to 80 percent, or to the 
percentage of the maximum Federal contribution authorized by this 
section, whichever is less, for a project to be carried out in a county 
for which a distressed county designation is in effect under section 
226.''.

SEC. 215. SEWAGE TREATMENT WORKS PROGRAM.

  Section 212 (40 U.S.C. App. 212) is repealed.

SEC. 216. REPEAL OF AMENDMENTS TO HOUSING ACT OF 1954.

  Section 213 (40 U.S.C. App. 213) is repealed.

SEC. 217. SUPPLEMENTS TO FEDERAL GRANT-IN-AID PROGRAMS.

  (a) Availability of Amounts.--The first sentence of section 214(a) 
(40 U.S.C. App. 214(a)) is amended by striking ``the President is 
authorized to provide funds to the Federal Cochairman to be used'' and 
inserting ``the Federal Cochairman may use amounts made available to 
carry out this section''.
  (b) Cost Sharing.--Section 214(b) (40 U.S.C. App. 214(b)) is 
amended--
          (1) by striking ``(b)'' and inserting ``(b)(1)''; and
          (2) by adding at the end the following:
  ``(2) After September 30, 1998, not more than 50 percent of any 
project cost eligible for financial assistance under this section may 
be provided from funds appropriated to carry out this Act; except that 
such maximum Commission contribution may be increased to 80 percent for 
a project to be carried out in a county for which a distressed county 
designation is in effect under section 226.''.
  (c) Federal Grant-in-Aid Programs Defined.--The first sentence of 
section 214(c) (40 U.S.C. App. 214(c)) is amended by striking ``on or 
before December 31, 1980,''.
  (d) Limitation on Covered Road Projects.--The second sentence of 
section 214(c) is amended by inserting ``authorized by title 23, United 
States Code,'' after ``road construction''.

SEC. 218. PROGRAM DEVELOPMENT CRITERIA.

  (a) Considerations.--Section 224(a) (40 U.S.C. App. 224(a)) is 
amended by inserting before the semicolon at the end of paragraph (1) 
the following: ``or in a severely and persistently distressed county or 
area''.
  (b) Outcome Measurements.--Section 224(a) is further amended--
          (1) by striking the period at the end of paragraph (5) and 
        inserting ``; and''; and
          (2) by adding at the end the following:
          ``(6) the extent to which the project design provides for 
        detailed outcome measurements by which grant expenditures may 
        be evaluated.''.
  (c) Removal of Limitations.--Section 224(b) (40 U.S.C. App. 224(b)) 
is amended to read as follows:
  ``(b) Limitation.--Financial assistance made available under this Act 
may not be used to assist establishments relocating from one area to 
another.''.

SEC. 219. DISTRESSED AND ECONOMICALLY STRONG COUNTIES.

  Part C of title II (40 U.S.C. App. 221-225) is amended by adding at 
the end the following:

``SEC. 226. DISTRESSED AND ECONOMICALLY STRONG COUNTIES.

  ``(a) Designations.--Not later than 90 days after the date of 
enactment of this section, and annually thereafter, the Commission, in 
accordance with such criteria as the Commission may establish, shall--
          ``(1) designate as `distressed counties' those counties in 
        the region that are the most severely and persistently 
        distressed; and
          ``(2) designate two categories of economically strong 
        counties, as follows:
                  ``(A) `competitive counties' which shall be those 
                counties in the region which are approaching economic 
                parity with the rest of the Nation; and
                  ``(B) `attainment counties' which shall be those 
                counties in the region which have attained or exceeded 
                economic parity with the rest of the Nation.
  ``(b) Distressed Counties.--In program and project development and 
implementation and in the allocation of appropriations made available 
to carry out this Act, the Commission shall give special consideration 
to the needs of those counties for which a distressed designation is in 
effect under this section.
  ``(c) Funding Prohibition for Projects Located in Economically Strong 
Counties.--
          ``(1) Competitive counties.--Except as provided by paragraphs 
        (3) and (4), assistance under this Act shall be limited to no 
        more than 30 percent of project cost for a project located in a 
        county for which a competitive county designation is in effect 
        under this section.
          ``(2) Attainment counties.--Except as provided by paragraphs 
        (3) and (4), no funds may be provided under this Act for a 
        project located in a county for which an attainment county 
        designation is in effect under this section.
          ``(3) Exceptions.--The prohibitions established by paragraphs 
        (1) and (2) shall not apply to--
                  ``(A) projects on the Appalachian development highway 
                system authorized by section 201;
                  ``(B) local development district administrative 
                projects authorized by section 302(a)(1); or
                  ``(C) a multicounty project that includes a county or 
                counties designated as `competitive' or `attainment' 
                under this section provided all participating counties 
                share in the costs and benefits of the project.
          ``(4) Waiver.--The prohibitions established by paragraphs (1) 
        and (2) may be waived by the Commission for a particular 
        project upon a showing of one or more of the following:
                  ``(A) The existence of a significant pocket of 
                distress in the part of the county in which the project 
                is located.
                  ``(B) A significant decline in economic conditions 
                affecting the county which is not reflected in current 
                designation data.
                  ``(C) The existence of a significant potential 
                benefit from the project in areas of the region outside 
                the designated county.''.

SEC. 220. GRANTS FOR ADMINISTRATIVE EXPENSES AND COMMISSION PROJECTS.

  (a) Availability of Amounts.--Section 302(a) (40 U.S.C. App. 302(a)) 
is amended--
          (1) by striking ``The President'' and inserting ``The 
        Commission''; and
          (2) in paragraphs (1), (2), and (3) by striking ``to the 
        Commission'' each place it appears.
  (b) Cost Sharing.--Section 302(a) is further amended--
          (1) in paragraph (1) by striking ``75 per centum'' and 
        inserting ``50 percent''; and
          (2) by adding at the end the following:

``After September 30, 1998, not more than 50 percent of the cost of any 
activity eligible for financial assistance under this section may be 
provided from funds appropriated to carry out this Act (or 80 percent 
of such costs in the case of a project to be carried out in a county 
for which a distressed county designation is in effect under section 
226); except that discretionary grants by the Commission to implement 
significant regional initiatives, to take advantage of special 
development opportunities, or to respond to emergency economic distress 
in the region may be made without regard to such percentage 
limitations. The aggregate amount of discretionary grants referred to 
in the preceding sentence in any fiscal year shall not exceed 10 
percent of the amounts appropriated under section 401 for such fiscal 
year.''.
  (c) Repeals.--Section 302 (40 U.S.C. App. 302) is amended--
          (1) by striking paragraphs (3) and (4) of subsection (b);
          (2) by striking subsection (d); and
          (3) by striking subsection (e).

SEC. 221. AUTHORIZATION OF APPROPRIATIONS FOR GENERAL PROGRAM.

  Section 401 (40 U.S.C. App. 401) is amended to read as follows:

``SEC. 401. AUTHORIZATION OF APPROPRIATIONS.

  ``In addition to amounts authorized by section 201 and amounts made 
available for the Appalachian development highway system program, there 
are authorized to be appropriated to the Commission to carry out this 
Act--
          ``(1) $67,000,000 for fiscal year 1999;
          ``(2) $72,000,000 for fiscal year 2000;
          ``(3) $75,000,000 for fiscal year 2001;
          ``(4) $75,000,000 for fiscal year 2002; and
          ``(5) $80,000,000 for fiscal year 2003.
Such sums shall remain available until expended.''.

SEC. 222. EXTENSION OF TERMINATION DATE.

  Section 405 (40 U.S.C. App. 405) is amended by striking ``1982'' and 
inserting ``2003''.

                                Purpose

    The purpose of this bill is to reauthorize and reform the 
programs of the Economic Development Administration (EDA) and 
the Appalachian Regional Commission (ARC). This legislation 
reauthorizes both programs for five years, but does so with 
significant reforms intended to improve program delivery and 
decisions and focus funds on cost-effective programs in truly 
distressed areas.
    Authorizations for both the EDA and ARC expired on 
September 30, 1982. Since then, program funding has been 
continued through annual appropriations acts. While the 
Committee, in each Congress since 1982, has reported and passed 
in the House legislation reauthorizing these programs, no major 
rewrite of the authorization statutes has been enacted for more 
than 17 years.
    By reforming and reauthorizing the EDA and ARC, the 
Committee recognizes that there remains a compelling federal 
interest in assisting distressed communities. Both programs 
address this interest through locally derived projects to meet 
local needs to improve the capacity for economic growth and 
jobs, as well as to respond to changing national and 
international economic conditions including the effects of 
defense downsizing and military base closures.

                          Background and Need

    Over two days of hearings, the Committee heard extensive 
testimony of the need for a continuing federal program to 
assist distressed communities. In communities served by the 
programs of the EDA and ARC, long-term economic deterioration 
has resulted in poor job creation and weak economic growth. EDA 
and ARC programs are designed to create jobs and economic 
growth through a locally oriented planning process that 
identifies and funds projects that generate long-term jobs and 
improve the economic health of a community.
    Programs administered by the Economic Development 
Administration successfully help many of the Nation's most 
economically distressed areas revitalize their physical and 
economic structures and provide support to small-and medium-
sized businesses to grow and generate long-term jobs and 
economic opportunity. EDA assistance, which uses a building-
block approach that begins with planning, is intended to 
transition distressed communities to self-sustaining economies 
that are competitive in a global marketplace.
    The Committee notes that while much of the Nation currently 
enjoys economic prosperity, many areas suffer from high 
unemployment, low per-capita income, or other indicators of 
economic distress. In 1998, the United States is experiencing 
one of the longest and most robust peace-time economic 
expansions in history. Yet not everyone has benefited from this 
growth equally.
    According to the most current data available, approximately 
13.7 percent of the population or more than 36 million 
individuals live in poverty (U.S. Census Bureau, 1996). Of the 
total population, 5.2 percent were unemployed over the past two 
years (Bureau of Labor Statistics, two-year unadjusted average 
as of December 31, 1997).
    Many of those excluded from this economic prosperity live 
in declining inner cities, neglected rural areas, Alaska Native 
villages, or on Indian reservations that lack the basics for 
economic growth. Others live in communities that once supported 
America's military needs, but now lack an economic base that is 
sufficiently diversified to maintain economic vitality; yet 
others live in communities where a dominant employer has scaled 
back or closed operations; still others live in communities 
impacted by international trade. Finally, there are people who 
live in communities where the productive base has been 
devastated by natural disasters. All of these people rely on 
the Economic Development Administration for help to make their 
local economies self-sustaining.
    The Committee has expressed concern over the years 
regarding the need to concentrate the resources of the Economic 
Development Administration in the areas of highest economic 
distress. To support agency efforts, the Committee has included 
specific distress criteria within the text of this Act. 
Currently, 96 percent of Public Works grants go to communities 
with the highest level of distress. The Committee recognizes 
that the Economic Development Administration has been diligent 
over the past several years in ensuring that assistance has 
gone to areas that substantially meet or exceed the criteria 
outlined in this Act. The Committee further notes that pockets 
of poverty exist within areas that may as a whole not 
demonstrate economic distress. Under H.R. 4275, assistance can 
be targeted to create economic development within pockets of 
poverty as appropriate and necessary to the mission of the 
Economic Development Administration.
    The Committee has found that the Economic Development 
Administration has been diligent in responding to Congressional 
guidance from both the authorizing and appropriations 
committees to streamline its programs and focus its funds on 
cost effective programs. The Economic Development 
Administration has been successfully streamlined having 
eliminated more than 60 percent of its regulations, reduced 
agency staff by thirty percent, and simplified the grant 
application process, including its pre-application and 
application forms to better serve agency constituencies.
    Recent studies have documented that the Economic 
Development Administration has a proven track record in 
creating economic growth and jobs in a cost effective manner. A 
1998 study of grant programs by Rutgers and Princeton 
Universities found that for every $1 million in EDA funding: 
(1) $10.08 million in private sector investment was leveraged; 
(2) the local tax base was increased by $10.13 million; and (3) 
327 permanent jobs were created locally.
    In addition, the study found that the number of jobs 
doubled in the six years after project completion and at 
project locations: (1) the unemployment rate was 30 percent 
higher than the state average and 40 percent higher than the 
national average unemployment; (2) per capitaincome was 40 
percent less than the state and national averages; and (3) 40 percent 
more below the poverty level than in the state or Nation.
    One phase of this study specifically addressed the 1996 
General Accounting Office (GAO) report which stated that GAO 
could not find a strong causal linkage between a positive 
economic effect and the economic development assistance EDA 
provides. Instead, the study found: (1) EDA investments have a 
statistically significant and positive effect on county total 
employment; (2) EDA investment yields jobs at the average wage 
of all jobs locally; (3) A $10,000 EDA investment produces 
approximately 9 permanent jobs; and (4) the cost per job for 
the EDA program is estimated at just over $1,100 in 1997 
dollars.
    According to this evidence, EDA grants are among the most 
cost-effective in government. The study demonstrates that EDA 
grants are producing their desired effect: providing economic 
opportunity and permanent jobs in the Nation's most 
economically distressed communities.
    The Economic Development Administration also underwent a 
successful reorganization; however, the Committee notes that 
this reorganization was adopted without any official notice to 
the Committee on Transportation and Infrastructure. H.R. 4275 
includes language requiring official pre-notification of such 
reorganizations to be provided to both the authorizing and 
appropriations committees.
    Further, the Economic Development Administration has 
successfully implemented program performance measures in 
compliance with the Government Performance and Results Act of 
1993 with validated outcomes. Through a rigorous, systematic 
review of the portfolio of economic development tools, the 
Economic Development Administration is working to apply 
evaluation results to on-going analyses of its programs to 
gauge performance. In addition, the agency is working closely 
with the Office of the Inspector General on the timely 
resolution of outstanding audit issues.
    The Economic Development Administration is the only federal 
agency tasked with the mission of supporting economic 
development in distressed areas throughout the country and 
within U.S. territories. In the past, some concerns have been 
expressed regarding duplication among various departments and 
agencies. The Committee has found that Economic Development 
Administration programs meet the specific needs of distressed 
areas.
    A cost-shared approach allows these areas to undertake 
measures and implement strategies to achieve economic recovery 
whether caused by long-term economic deterioration or by sudden 
economic dislocations, natural disasters, or dislocations 
caused by public or private sector actions. The average federal 
share of a grant is only 50 percent of project costs.
    Through partnerships at federal, state, and local levels, 
the Economic Development Administration assures consensus and 
focuses on locally identified economic development priorities 
and thereby avoids duplication with the programs of other 
federal agencies. Economic Development Administration 
investments yield private sector jobs and investment and 
increase the local tax base. In many instances, the Economic 
Development Administration is responsible for the grants 
management of jointly funded federal assistance. Finally, the 
Economic Development Administration's programs are unique in 
that they focus on local economic development strategies and 
planning.
    The agency is an innovator in the field of economic 
development. In the 1960's, the Economic Development 
Administration established a nationwide network of locally 
based regional economic development districts. In the 1970's, 
the Economic Development Administration created revolving loan 
funds, business incubators and trade adjustment assistance for 
firms. In the 1980's and 1990's, the Economic Development 
Administration became the single federal program to help 
affected areas with implementation of base reuse plans, 
developed with assistance from the Department of Defense, 
Office of Economic Adjustment. In the 1990's, the Economic 
Development Administration assumed a leadership role in post-
disaster economic recovery and is recognized as capable of 
responding to economic adjustment for trade-impacted and 
industry-dislocated communities. Economic Development 
Administration assistance has been called the ``lynch-pin'' or 
``gap-financier'' that causes successful economic development.
    The mission of the Economic Development Administration is 
not just important to local communities, but to the Nation as a 
whole. Uneven development undermines U.S. economic performance. 
It means that some areas have excess fixed capacity while 
others have to spend tax dollars to build new capacity. Most 
important of all, when a community lacks key infrastructure and 
institutional capacity to attract private investment, national 
productivity is lowered because we, as a Nation, fail to 
utilize the innovative talents of those people excluded from 
productive employment.
    Therefore, the continued ability of all areas to keep pace 
with the rapidly changing environments of the world economy is 
critical to the Nation's prosperity. The programs of the 
Economic Development Administration create economic opportunity 
in distressed communities through partnerships with state and 
regional development organizations; they do so at very low 
cost, they support private sector investments that are critical 
to sustaining local economic development; and, they are 
exceptionally well-managed. The mission of the Economic 
Development Administration is important today and critical to 
helping distressed communities adjust to the world economy of 
the 21st century.
    Moreover, the defense adjustment assistance program of the 
EDA is the only federal program exclusively dedicated to 
helping communities respond to base closure and realignment and 
cutbacks in defense procurement. The EDA defense adjustment 
program, like all EDA programs, relies on flexibility and local 
control. Communities identify redevelopment priorities and 
develop plans that are funded by EDA assistance. This 
assistance can range from infrastructure investment, revolving 
loan funds, business assistance centers, industrial parks, and 
various other types of activities.
    The Committee has also received testimony that the 
Appalachian Regional Commission has had a dramatic effect in 
improving the lives of Appalachian citizens. In its governing 
structure, the commission has served as a model of state-
federal cooperation. Projects areidentified at the local level 
and then the states and the federal government meet cooperatively to 
address economic development issues at a regional level. It is a true 
partnership, requiring agreement between the federal representative and 
a majority of the governors before any money can be spent.
    The ARC's approach provides a maximum of flexibility to 
local communities, placing at their disposal a wide range of 
economic development resources--water and sewer infrastructure, 
training, and business financing. Because this is a 
partnership, there is a minimum of red tape and bureaucracy. 
The commission's administrative cost have averaged less than 4 
percent of its total budget.
    In 1997 alone, ARC grants helped provide water and sewer 
service for 26,054 households, assisted in the development or 
retention of 38,509 jobs, provided training and educational 
activities for more than 70,000 Appalachian residents, and 
placed 157 doctors in medically underserved areas of the 
region.
    Even with these successes, the job of the ARC is not yet 
complete. More than one-quarter of Appalachian counties are 
severely distressed, with above average unemployment rates, 
poverty rates that are at least 150 percent of the national 
average, and per capita incomes that are less than two-thirds 
of the national average. H.R. 4275 recognizes these remaining 
areas of distress by focusing ARC funds on the most distressed 
counties, while utilizing a regional approach to economic 
development.

                        Description of the Bill

    For both the EDA and ARC, the elements of local control and 
flexibility have been keys to their success. Existing statutory 
authority provides a wide range of economic development tools. 
Which tool should be used--be it infrastructure investment, a 
revolving loan fund, planning assistance, or some other type of 
assistance--is determined at the local level. Both the EDA and 
ARC utilize planning processes that creates a local consensus 
and require that a project be part of an overall redevelopment 
plan.
    While the Committee is convinced of the continuing need for 
the type of federal assistance provided by the programs of the 
EDA and ARC, serious issues have been raised about the 
operation of these programs. Key among these issues are: (1) 
the targeting of federal assistance to truly distressed 
communities, (2) assuring local control and responsibility, and 
(3) updating and reforming the underlying statutory authority 
to ensure that the best projects are selected for investment.
    The legislation adopted by the Committee (H.R. 4275) 
represents a substantial rewrite of these programs. This bill 
excises outdated and unnecessary programs and provisions in the 
current statutory authority for both the EDA and ARC. The bill 
retains only those programs that are cost effective and have 
successfully worked at the local level. H.R. 4275 changes the 
eligibility criteria for both programs to ensure that funds are 
actually targeted to distressed areas. For example, under H.R. 
4275, 90 percent of the Nation would no longer be eligible for 
EDA assistance--only about 36 percent of the Nation would 
currently be eligible under H.R. 4275's distress criteria.
    In rewriting the Public Works and Economic Development Act 
(PWEDA) of 1965, the Committee eliminated a number of outdated 
and unnecessary programs. Specifically, the Committee 
eliminated authority for direct and guaranteed business loans 
as provided for by title II of PWEDA, specific authorization 
for disaster assistance under title VIII of PWEDA (although 
such assistance may still be provided pursuant to remaining 
authorities), and job creation programs under title X of PWEDA.
    The authorities retained by H.R. 4275 focus funding on 
proven programs that generate long-term jobs and economic 
growth. The programs that continue to be authorized are public 
works infrastructure (title I of PWEDA), planning and technical 
assistance (title III of PWEDA), and economic/defense 
adjustment (title IX of PWEDA). The Committee retained the 
current PWEDA statutory language used to authorize these 
programs, with limited modifications. Thus, programs currently 
eligible under these titles will remain eligible for funding.
    For example, the Committee recognizes the value of the 
planning and technical assistance provided by Economic 
Development Districts to help communities build the local 
capacity to focus on long-term economic challenges. Funding of 
these districts has been and remains an integral element of 
successful economic development grants awarded under this Act. 
Economic Development Districts also are the coordinating 
entities for a number of other federal and state programs.
    Funding levels for economic development districts have 
actually decreased from their original levels in addition to 
not being adjusted for inflation in over 30 years. The average 
planning grant to districts was approximately $54,000 at the 
start of the program in 1966. Today the average planning grant 
remains only $54,000. Adjusted for inflation, the value of a 
1998 planning grant is only $10,800, or 20 percent on the 
dollar, when compared to its original purchasing power in 1966.
    For the past 30 years, districts have leveraged and 
stretched these small but significant planning grants to help 
thousands of America's small metropolitan and rural communities 
forge ahead and create jobs and opportunities for their 
citizens.
    The agency's planning assistance program is an excellent 
tool for fostering local economic development efforts through 
economic development districts, particularly in rural areas 
where resources are limited and regional cooperation results in 
achieving common economic goals.
    The agency is encouraged to allow economic development 
districts to provide funds to purchase geographic information 
systems and global positioning systems. By using the latest 
technology, economic development districts can dramatically 
enhance their ability to map outindustrial sites; local sewer 
lines, access roads and other infrastructure; develop enhanced overall 
economic development plans; and analyze local economic development 
trends. The agency is encouraged to provide training for economic 
development districts that addresses the potential for the systems.
    Funding for the University Center program remains eligible 
for funding by the regional commissions and is subject to peer 
review under H.R. 4275. The Committee further directs the 
Economic Development Administration to review its current 
regulations that allow a university to charge up to 20 percent 
in indirect costs. The actual level of charges varies among 
centers and the Committee believes that keeping such costs low 
will strengthen the program.
    One of the most critical programs currently administered by 
the EDA is the defense adjustment program. There remains an 
ongoing need to address community economic adjustment resulting 
from defense downsizing. This program assists communities 
affected by base realignments and closures as well as cuts in 
defense procurement. The 1995 round of Base Reduction and 
Closure (BRAC) decisions alone will close or realign 146 bases, 
affecting 100,000 jobs. Because the economic health of many 
communities is tied to defense bases, the effect of base 
closure and realignment decisions can have a devastating local 
effect. Additionally, communities are just now beginning to 
implement response plans for base closings in previous years. 
As authorized, communities have a wide range of options to 
regain economic stability--infrastructure investments, 
revolving loan funds, business assistance, and planning funds. 
Assistance is based on a base reuse plan that is locally 
developed. The Committee notes that this is the only federal 
program designed to help communities deal with the dislocation 
resulting from defense downsizing and expects that this program 
will continue to be fully utilized.
    Another effective program has been the funding of revolving 
loan funds administered by local agencies. Under this program, 
which continues to be authorized by the bill, initial capital 
for over 480 local revolving loan fund projects has been 
provided. These loan funds have made more than 7,200 loans to 
private sector businesses. Based on 294 reports filed for 
active revolving loan fund programs in a recent year, these 
loans leveraged more than $1.9 billion in private capital. Upon 
repayment, revolving loan funds stay in the community for 
further economic development.
    One issue that has been brought to the Committee's 
attention is excess red tape and regulatory requirements 
imposed on these revolving loan funds, even after initial loans 
have been recycled through the revolving loan funds. Many of 
the loans made from these funds are for relatively small 
amounts and the additional paperwork burden hampers the 
program's effectiveness. To remedy this problem, the Committee 
has included a provision directing that a task force be formed 
to study solutions to this problem. For example, the Committee 
has heard from local revolving loan fund administrators, such 
as the city of South Bend, Indiana, who are struggling with 
administering this program and should be represented on the 
task force. The bill also provides authority for the sale of 
the portfolios of revolving loan funds. This change will allow 
some administrators of revolving loan funds to increase the 
amount of loans they can award.
    The bill continues to include legislative language 
(included in past bills adopted by the House) that require that 
approved projects be part of an overall investment strategy. 
This requirement ensures that federal funds will be used in a 
coordinated, cost-effective manner.

                            Program Reforms

    The bill requires that the Economic Development 
Administration establish performance measures for grants and 
other assistance provided. Such performance measures shall be 
used to evaluate project proposals and conduct evaluations of 
projects receiving such assistance. The Committee believes that 
this provision will lead to a more efficient and effective 
allocation of grant awards and will ensure that the best 
projects are selected for investment. The Committee also 
believes that this provision will provide more information 
documenting the benefits of assistance provided under this Act. 
The Committee is encouraged by recent efforts to document and 
report these benefits and believes that such an evaluation 
system greatly aids in justifying the merits of the program.
    A major criticism levied against the programs of the EDA is 
that 85 to 90 percent of the Nation is eligible for funding, 
and, as such, the program is not targeted to distressed areas. 
The bill addresses this concern by eliminating the 
grandfathering of eligibility that has lead to the current 
situation, tightening eligibility criteria to areas with true 
distress, and requiring an applicant to prove distress upon 
every application.
    The Committee eliminated from the bill specific references 
to areas with activities to ``provide immediate useful work to 
unemployed and underemployed persons'' (known as public works 
impact program areas, or PWIPs) and to ``outmigration of 
population'' as separate eligibility factors in section 302. In 
the Committee's view, these provisions were unnecessary because 
such areas suffering economic distress would be eligible for 
assistance under the remaining eligibility factors, e.g., 
pockets of poverty or high unemployment, or areas that are 
experiencing a special need.
    The Committee appreciates that the Office of Economic 
Development Information created by section 502 will require the 
commitment of significant additional resources. Although the 
Committee recognizes that the ability of EDA to implement all 
of the provisions of this section is partially dependent upon 
the availability of sufficient appropriations, the Committee 
expects EDA to make every effort to utilize available resources 
to fulfill the intent and purpose of the section. For example, 
the Committee believes that the office can start immediately 
using current EDA resources devoted to information 
dissemination (including current efforts in the defense 
adjustment area) as well as full use of technological means 
such as the Internet to run this office in the most cost-
effective manner.
    In addition, the Committee designates this office as the 
John E. Corrigan Office of Economic Development Information in 
recognition of the lifetime of outstanding public service John 
Corrigan has given the Economic Development Administration and 
the Nation as theDirector of the Philadelphia Regional Office 
and earlier posts at the Administration's headquarters.
    For the new public works loan guarantee authority, the 
Committee expects the agency to take advantage of this new 
economic development tool. It is the committee's intent that 
this new authority be used to demonstrate the usefulness of 
this concept and that the required report evaluate the program 
and suggest necessary changes. It is the Committee's intent in 
both statutory and report language that these loan guarantees 
under section 201 be directed to local government and eligible 
non-profit recipients for infrastructure related projects. The 
Committee has previously rejected the ``Competitive 
Communities'' proposal generated by the Department of Commerce 
and does not view this initiative as similar in purpose or 
intent, specifically as the ``Competitive Communities'' 
proposal related to assisting specific businesses.
    Similarly, the Committee expects EDA to take advantage of 
the authority to buy down interest rates of eligible 
recipients. The Committee believes that this unique innovative 
financing mechanism will enable EDA to better leverage its 
funds and facilitate more economic growth in economically 
distressed communities.
    In addition, although the Committee is not aware of any EDA 
or ARC funds that have directly benefited foreign governments, 
the Committee is concerned with reports of other federal monies 
that have directly benefited these governments. Therefore, the 
Committee takes this opportunity to clarify that it intends 
that no funds authorized by this Act be used to directly 
benefit a foreign government.
    The Committee has included authority in section 205 to 
waive certain cost sharing requirements in the case of disaster 
assistance; however, it is the intent of the Committee that 
this waiver authority is discretionary, not automatic, and 
would be granted only in instances of true need.
    The bill provides authorizations of $368 million a year for 
FY 1999 through FY 2003 for ongoing grant programs and such 
sums authorization for administrative expenses.

                    Appalachian Regional Commission

    After hearing the testimony of witnesses and closely 
examining the conditions in Appalachia and the operation of the 
Appalachian Regional Commission (ARC), the Committee strongly 
endorses the need for the continuation of the programs of the 
ARC. Further, in this era of devolving authority from 
Washington to state and local governments, the ARC serves as a 
model program for state and federal cooperation. H.R. 4275 
reauthorizes the ARC for five years, but also adds reforms to 
target funds to truly distressed regions and repeal obsolete 
authorizations.
    Although the ARC has accomplished much success over its 30 
years of existence, there remain profound problems in 
Appalachia that warrant the continuation of the programs of the 
ARC. The ARC covers 13 states and 406 counties (including parts 
of Alabama, Georgia, Kentucky, Maryland, Mississippi, New York, 
North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, 
Virginia, and all of West Virginia). Of these 406 counties, 108 
are severely distressed, with per capita incomes that are less 
than two-thirds of the national average, poverty rates that are 
at least 150 percent of the national rate, an unemployment rate 
that is 150 percent of the national level, and per capita 
income that is no more than two-thirds of the national level.
    The ARC was established to address the special problems of 
a region that had suffered from neglect. The persistent and 
widespread economic distress of the region sets it apart from 
the economic mainstream of the Nation. The regional approach of 
the ARC allows affected states to work cooperatively to address 
these issues. ARC programs do not duplicate other federal 
programs and many distressed Appalachian communities lack the 
resources to match other federal programs. Perhaps more 
important, ARC programs respond to locally identified needs and 
are extremely flexible in their ability to respond to the 
unique problems afflicting Appalachian communities. This 
flexibility includes the ability to package ARC funds and 
provide resources to bundle together several federal programs.
    H.R. 4275 does not change or amend any current 
authorizations or authorities affecting the 3,025 mile 
Appalachian Development Highway System. The Transportation 
Equity Act for the 21st Century (TEA-21) has already provided 
necessary amendments for the highway program. As such, the 
amendments in H.R. 4275 focus on the ARC's administration and 
area development program.
    Solid academic evidence exists of the cost-effectiveness of 
the ARC and the need for continued funding. A 1993 study, 
funded by the National Science Foundation, documented the 
contributions ARC has made to economic growth in the region. 
The study, using statistical ``twin'' counties outside of the 
region, found that: (1) counties of Appalachia grew at a faster 
rate than comparable counties outside of the ARC region and, 
(2) due to the presence and funding of the ARC, Appalachian 
counties averaged 48 percent more growth in income and 17 
percent greater growth in per capita income. These results held 
true for all parts of Appalachia, including urban, rural, and 
distressed counties. Study results indicate that ARC counties 
enjoy an increase of $528 in per capita income because of the 
ARC investments.

                              ARC Reforms

    Currently, the ARC Federal Cochairman and the Commission 
have adopted policies to more effectively target ARC resources 
to truly distressed communities in Appalachia. There is no 
question that certain areas of the region, in the 30 years 
since the ARC was established, have become economically 
competitive and may not necessarily require the additional 
assistance provided by ARC programs. The Committee strongly 
endorses the effort to target assistance to distressed areas 
and has included in H.R. 4275 a number of major provisions that 
will ensure that funds go where they are most needed.
    Specifically, H.R. 4275 requires the Commission, within 90 
days of enactment, and annually thereafter, to designate as 
``distressed counties'' those counties in the region that are 
themost severely and persistently distressed and underdeveloped 
and designate as ``economically strong counties'' those counties in the 
region which have attained substantial economic parity with the rest of 
the Nation. In the statutory language the Committee has not established 
the specific criteria to be used for the designation of distressed and 
economically competitive counties. This discretion is granted to the 
Commission because the Committee believes that the current Commission 
is aggressively working to better target ARC funds to the most 
distressed areas. Nevertheless, the Committee intends to closely 
monitor the designation process used by the Commission to assess 
whether further statutory guidance may be needed.
    The bill provides that, except in limited circumstances, 
ARC assistance shall not be provided in economically 
competitive counties. Further, the matching rate for most area 
development programs is statutorily limited to 50 percent 
unless a county is designated as distressed, in which case the 
matching rate may go up to 80 percent. These matching rates 
should be viewed as ceilings and the Commission should continue 
efforts to achieve the greatest possible degree of non-federal 
participation.
    To further emphasize the need to focus funds on distressed 
communities, the Committee has amended the findings and 
purposes of the Appalachian Regional Development Act of 1965 to 
explicitly state as a priority the addressing of the needs of 
distressed areas. This emphasis is also added to the program 
development criteria that the Commission uses pursuant to 
section 224(a) of the Act.
    H.R. 4275 further requires the Commission to use outcome 
measurements and benchmarks as a program development criteria. 
The Committee believes that this is an additional protection to 
ensure that cost-effective, worthy projects are approved.
    Total authorizations for the ARC are $67 million in FY 
1999, growing to $80 million in FY 2003. Consistent with these 
authorizations, the termination date for the Commission is 
extended to October 1, 2003.
    The Committee has also excised from the Act of number of 
obsolete authorizations. These obsolete authorizations are 
either no longer needed or are duplicated by other federal 
programs. Specifically, H.R. 4275 repeals: section 203, which 
authorizes projects for land stabilization, conservation, and 
erosion control; section 204, timber development; section 205, 
mining area restoration; section 206, a water resource survey; 
section 208, airport safety projects; section 212, sewage 
treatment works; and section 213, which related to repealed 
provisions in the Housing Act of 1954. The Committee has 
included in the bill a number of other technical changes, many 
of which have passed the House in previous Congresses, to 
update the Act and improve the administration of the program.

                      Section-by-Section Analysis

Section 1. Short title

    Act may be cited as the ``Economic Development Partnership 
Act of 1998.''

Section 2. Reauthorization of Public Works and Economic Development Act 
        of 1965 (PWEDA)

    Strike the 1965 Act and replace it with the reform bill. 
Include congressional findings of the need for federal 
assistance to distressed areas.

           Title I--Economic Development Regional Commissions

                      Subtitle A--Reauthorizations

Section 101. Establishment of economic development partnerships, 
        cooperation, and coordination

    Encourages the Economic Development Administration (EDA) to 
cooperate with state and local governments in providing 
assistance under this Act. Such assistance includes appropriate 
technical assistance and intergovernmental review of project 
proposals.

Section 102. Cooperation of federal agencies

    Encourages other federal agencies to cooperate in carrying 
out the purposes of this Act.

       Title II--Grants for Public Works and Economic Development

Section 201. Public works grants

    Provides authority to make grants for infrastructure 
projects, using the same language provided under Title I of 
PWEDA. There is a 50 percent cost share for projects.

Section 202. Construction cost increases

    Provides for increases in grant funding due to construction 
cost increases, at the discretion of the EDA, with significant 
limitations.

Section 203. Planning and administrative expenses

    Provides for grant assistance to political entities and 
planning organizations using essentially the same language as 
in Title III of the current Public Works and Economic 
Development Act (PWEDA). Retains planning process requirements 
and provisions for state plans.

Section 204. Cost sharing

    Establishes a 50 percent direct grant rate for projects 
under this title.

Section 205. Supplementary grants

    Provides authority to supplement grants from designated 
federal grant-in-aid programs as well as authority to 
supplement the 50 percent direct grant rate for eligible 
projects. Similar to PWEDA, it provides that grant rates may be 
increased in very distressed areas.

Section 206. Regulations to ensure relative needs are met

    Directs the Secretary to prescribe rules, regulations, and 
procedures to carry out this title which will assure that for 
assistance under section 201 adequate consideration is given to 
the relative needs of eligible areas, as in PWEDA.

Section 207. Training, research, and technical assistance

    Provides authority to make direct grants for training, 
research, and technical assistance, including program 
evaluation and economic impact analyses, as well as authority 
to conduct research and technical assistance through staff, 
through other federal department or agencies, or through 
contracts or grants. Authority is similar to PWEDA's.

Section 208. Relocation of individuals and businesses

    States that grants to eligible recipients must include 
relocation assistance to affected persons, as required by the 
Uniform Relocation Assistance and Real Property Acquisition 
Policies Act of 1970, as amended.

Section 209. Economic adjustment

    Provides authority, as in PWEDA, to make direct grants for 
public facilities, public services, business development 
(including a revolving loan fund), planning, technical 
assistance, and training, including activities to alleviate 
long-term economic deterioration, and sudden and severe 
economic dislocations. This includes assistance for communities 
affected by defense reductions.

Section 210. Direct expenditure or redistribution by recipient

    Provides, as in PWEDA, that amounts from grants under 
section 209 of this title may be used in direct expenditures or 
through redistribution to public and private entities in 
grants, loans, loan guarantees, to reduce loan guarantee 
interest, or other appropriate assistance, but no grant shall 
be made by a recipient to a private profit-making entity.

Section 211. Changed project circumstances

    Provides authority to approve changes in project scope.

Section 212. Use of funds in projects constructed under projected cost

    Provides that funds available because of construction 
projects completed under cost may be used to further improve 
the project, as determined by the Secretary.

Section 213. Base closings and realignments

    Provides authority for assistance under this title due to 
the closure or realignment of a military or Department of 
Energy installation for projects to be carried out on such 
installation or in communities adversely affected by the 
closure or realignment.

Section 214. Prevention of unfair competition

    Prohibits use of funds under this Act for any project 
resulting in excess capacity using the same language in section 
702 of PWEDA.

Section 215. Sale of financial instruments in revolving loan funds

    Allows for the sale of financial instruments in revolving 
loan funds to recapitalize such funds.

Section 216. Reports by recipient

    Requires reports from recipients of assistance containing 
an evaluation of the effectiveness of the economic assistance 
provided under this Act.

    Title III--Definitions, Eligibility and Comprehensive Economic 
                         Development Strategies

Section 301. Definitions

    Defines eligible recipient as an area described in section 
302(a), an economic development district designated under 
section 401, an Indian tribe, a State, a city or other 
political subdivision (subdivision) of a State or a consortium 
of such subdivisions, an institution of higher education or a 
consortium of such institutions, or a public or private 
nonprofit organization or association acting in cooperation 
with officials of such subdivisions, and includes private 
individuals and for-profit organizations for grants under 
section 207. The terms economic development district, economic 
development center, grant, Indian tribe, Secretary, and State 
are also defined.

Section 302. Area eligibility

    Allows for self-certification by applicants seeking 
assistance under section 201 or 209, that they meet one of two 
basic distress criteria established; such certification to be 
supported by federal data, when available or, in the absence of 
recent federal data, by data available through the State 
government. Such documentation shall be accepted by the 
Secretary unless the Secretary determines the documentation to 
be inaccurate. The most recent statistics available shall be 
used.
    Area eligibility is similar to that in PWEDA but provides 
consistency across programs, and simplifies the process of 
determining eligibility. All prior designations of eligibility 
are wiped clean: an area must prove eligibility each time it 
makes a grant application.
    Basic criteria are based on unemployment rates and per 
capita income. The eligibility requirements also allow the 
consideration of pockets of poverty and special economic 
adjustment problems.

Section 303. Comprehensive economic development strategy

    Requires applicants for assistance under section 201 or 209 
(except for planning) to prepare a comprehensive economic 
development strategy, acceptable to the Secretary, identifying 
problems to be addressed and the strategy for addressing them. 
This is similar to overall economic development programs 
required for PWEDA economic adjustment grants. It provides that 
plan prepared under another federally supported program may be 
acceptable.

                Title IV--Economic Development Districts

Section 401. Designation of economic development districts and economic 
        development centers

    Establishes criteria for the designation of economic 
development districts and economic development centers, with 
essentially the same language as in PWEDA.

Section 402. Termination or modification

    Authorizes the Secretary to issue regulations describing 
standards for terminating or modifying designated economic 
development districts and economic development centers, as in 
PWEDA.

Section 403. Bonus

    Provides authority to increase the amount of grant 
assistance authorized by section 204 and 205 for projects 
within designated economic development districts by an amount 
not to exceed 10 percent of the aggregate cost of any such 
project, subject to minimum non-federal share, if certain 
requirements are met, as in PWEDA.

Section 404. Strategy provided to Appalachian Regional Commission

    As in PWEDA, requires that each economic development 
district provide a copy of its comprehensive economic 
development strategy to the Appalachian Regional Commission, if 
any part of such proposed district is within the Appalachian 
region.

Section 405. Parts not within areas described in section 302(a)

    Establishes the authority to provide the financial 
assistance to those parts of an economic development district 
which are not within an area described in section 302(a), when 
such assistance will be of a substantial direct benefit to an 
area described in section 302(a) within such district, as in 
PWEDA.

                        Title V--Administration

Section 501. Under Secretary for Economic Development

    Provides that the Secretary will administer the Act with 
the assistance of an Under Secretary of Commerce for Economic 
Development to be appointed by the President by and with the 
advice and consent of the Senate; such Under Secretary of 
Commerce for Economic Development will serve as the 
administrator of the Economic Development Administration.

Section 502. Office of Economic Development Information

    Establishes an office to serve as an information 
clearinghouse on matters relating to economic development, 
economic adjustment, disaster recovery, and defense conversion 
programs and activities of the federal and state governments, 
including political subdivisions of the States. The office also 
shall aid applicants and develop information databases and 
electronic links to information.

Section 503. Consultation with other persons and agencies including the 
        Internet

    Authorizes the Secretary to confer with any persons, 
including representatives of labor, management, agriculture, 
and government, who can assist with the problems of area and 
regional unemployment or underemployment, and to consult with 
interested departments and agencies as deemed appropriate in 
the performance of the functions vested in the Secretary by 
this Act, as in PWEDA.

Section 504. Administration, operation, and maintenance

    Requires finding that the project for which federal 
assistance is granted will be properly and efficiently 
administered, operated, and maintained, using the same language 
as in section 604 of PWEDA.

Section 505. Firms desiring federal contracts

    Provides, as in PWEDA, that the Secretary may furnish the 
procurement divisions of the various departments, agencies, and 
other instrumentalities of the federal government with a list 
containing the names and addresses of business firms which are 
located in areas of high economic distress and which are 
desirous of obtaining government contracts for the furnishing 
of supplies or services.

Section 506. Technical amendment to Title 5, U.S.C.

    Amends section 5316 of Title 5, United States Code, by 
striking ``Administrator for Economic Development.''

Section 507. Notification of reorganization

    Requires 30 days notice to be provided to both the 
Authorizing and Appropriating Committees prior to any 
reorganization.

Section 508. Performance evaluations of grant recipients

    Requires triennial review of the performance of University 
Center and Economic Development Assistance Grant recipients.

Section 509. Coordination

    Promotes coordination with other economic development 
programs and establishes a Federal Coordinating Council for 
Economic Development.

Section 510. Economic development revolving loan fund task force

    Directs the Secretary of Commerce to establish a task force 
to examine issues related to the administration of revolving 
loan funds.

                        Title VI--Miscellaneous

Section 601. Powers of the Secretary

    Provides numerous powers to the Secretary, substantially 
similar to the authority under PWEDA, to carry out the 
Secretary's duties under this Act, including but not limited to 
those involving a seal, personnel, hearings, the taking of 
appropriate actions concerning personal property, real 
property, or evidence thereof, third party claims, the 
establishment of performance measures for grants and other 
assistance provided under this Act, and the establishment of 
such rules, regulations, and procedures as the Secretary 
considers appropriate in carrying out the provisions of this 
Act. It includes authority for the Secretary to protect 
governmental interest in grant property.

Section 602. Maintenance of standards

    Directs the Secretary to continue to implement and enforce 
the provisions of section 712 of PWEDA.

Section 603. Annual report to Congress

    Provides for one annual consolidated report to Congress on 
the Secretary's activities under this Act, as required under 
PWEDA.

Section 604. Use of other facilities

    Substantially as in PWEDA, provides authority for the 
Secretary to: delegate to the heads of other departments and 
agencies of the federal government any of the Secretary's 
functions, powers, and duties under this Act as deemed 
appropriate and to authorize redelegation by such heads; 
transfer funds between departments and agencies of the 
Government, if such funds are used for the purposes for which 
they are specifically authorized and appropriated; accept 
transfers of funds from other departments and agencies of the 
federal government if the funds are used for the purposes for 
which such funds are specifically authorized and appropriated.

Section 605. Penalties

    Provides legal penalties using essentially the same 
language as in section 710 of PWEDA.

Section 606. Employment of expediters and administrative employees

    Provides requirements concerning the employment of 
expediters and administrative employees, as in section 711 of 
PWEDA.

Section 607. Maintenance of records of approved applications for 
        financial assistance; public inspection

    Directs the Secretary, as in PWEDA, to maintain as a 
permanent part of the records of the Department of Commerce, a 
list of applications approved for financial assistance under 
this Act and to make such records available for public 
inspection during the regular business hours of the Department 
of Commerce.

Section 608. Records and audit

    Requires that recipients keep records and provide access 
for audits using language similar to that in section 714 of 
PWEDA.

Section 609. Prohibition against a statutory construction which might 
        cause diminution in other federal assistance

    As in PWEDA, provides that financial and technical 
assistance authorized under this Act be in addition to any 
federal assistance previously authorized, and no provision of 
this Act be construed as authorizing or permitting any 
reduction or diminution in the proportional amount of federal 
assistance which an entity would otherwise receive.

Section 610. Acceptance of applicants' certifications

    Provides authority for the Secretary to accept, when deemed 
appropriate, the applicants' certifications to meet the 
requirements of this Act.

                           Title VII--Funding

Section 701. Authorization of appropriations

    Authorizes $368,000,000 for fiscal years 1999 through 2003 
for grant programs and such sums for administrative expenses.

Section 702. Defense conversion activities

    In addition to the appropriations authorized by section 
701, authorizes to be appropriated to carry out this Act such 
sums as may be necessary to provide assistance for additional 
defense conversion activities in fiscal years 2000 through 
2003.

Section 703. Savings provisions

    Provides that existing rights, duties and obligations, and 
pending suits are not to be affected by this Act, and that the 
revolving fund established under section 203 of PWEDA is to 
continue to be available as a liquidating account.

             Subtitle B--Innovative Finding Pilot Programs

Section 121. Public works loan guarantees

    Provides that up to 10 percent of Title 201 public works 
funds may be used for loan guarantees to eligible recipients.

Section 122. Loan assistance demonstration program

    Provides that up to 10 percent of Title 209 funds may be 
used for interest rate buy downs for eligible recipients.

Section 123. Land conveyance

    The Secretary of Commerce shall convey, at fair market 
value, land in Two Harbors, Minnesota.

Section 124. Reports

    Provides for reports on the effectiveness of the pilot 
financing programs in section 121 and section 122.

Section 125. Buy America

    Funds must be expended in conformance with the Buy America 
Act.

                 Appalachian Regional Commission (ARC)

Section 201. References

    Provisions amend the Appalachian Regional Development Act 
of 1965.

Section 202. Findings and purposes

    Outlines congressional findings of a continuing need for 
programs in Appalachia to provide infrastructure and other 
economic assistance. In particular, the purpose of the Act is 
to address the needs of severely and persistently distressed 
and underdeveloped areas of the region so as to provide a 
fairer opportunity for the people of the region to share the 
quality of life generally enjoyed by citizens across this 
Nation.

Section 203. Meetings

    Requires at least one yearly meeting of the Commission with 
the Federal Cochairman and at least a majority of State members 
present. Allows additional meetings via electronic means.

Section 204. Authorizations for administrative expenses

    Eliminates outdated language.

Section 205. Compensation of employees

    Adjusts the compensation of the alternate to the Federal 
Cochairman.

Section 206. Lease terms

    Extend the ARC's current authority to lease space through 
the year 2003.

Section 207. Cost sharing of demonstration health projects

    Limits ARC funding for health and childcare demonstration 
projects to 50 percent, except that the limit could be raised 
up to 80 percent for projects located in distressed counties.

Section 208. Repeal of land stabilization, conservation, and erosion 
        control program

    Repeals section 203 of the Act which authorized projects 
for land stabilization, conservation, and erosion control.

Section 209. Repeal of timber development program

    Repeals section 204 of the Act which authorized projects 
for timber development.

Section 210. Repeal of mining area restoration program

    Repeals section 205 of the Act which authorized projects 
for mining area restoration.

Section 211. Repeal of water resource survey

    Repeals section 206 of the Act which authorized a water 
resource survey for the region.

Section 212. Cost sharing of housing projects

    Limits ARC funding for grants and loans for planning and 
obtaining financing for low and moderate-income housing 
construction or rehabilitation projects to 50 percent, except 
that the limit could be raised up to 80 percent for projects 
located in distressed counties.

Section 213. Repeal of airport safety improvements program

    Repeals section 208 of the Act which authorized airport 
safety projects.

Section 214. Cost sharing of education programs

    Limits ARC funding for vocational education and education 
demonstration projects to 50 percent, except that the limit 
could be raised up to 80 percent for projects located in 
distressed counties.

Section 215. Sewage treatment works program

    Repeals section 212 of the Act which authorized projects 
for sewage treatment works.

Section 216. Repeal of amendments to Housing Act of 1954

    Repeals section 213 of the Act which made the ARC an 
eligible agency to receive comprehensive housing planning 
grants under provisions of the Housing Act of 1954. Such 
provisions have since been repealed.

Section 217. Supplements to federal grant-in-aid programs

    Limits ARC funding for supplements to other federal grant-
in-aid programs with a limit of 50 percent of project costs, 
except that the limit could be raised up to 80 percent for 
projects located in distressed counties. Additionally, it 
clarifies that Title 23 highway projects are not eligible for 
supplemental grant funding.

Section 218. Program development criteria

    Adds recognition of severe and persistent economic distress 
to the criteria used for consideration of programs and projects 
to be funded. Also adds criteria to insure that programs and 
projects will be subject to outcome measurements and benchmarks 
designed to justify expenditures. Language also removes some 
dated limitations on types of assistance to be provided by the 
Commission.

Section 219. Distressed and economically strong counties

    Within 90 days of enactment, and annually thereafter, the 
Commission shall designate distressed and economically strong 
counties among the counties in the Appalachian region. Such 
designations will be made by criteria to be established by the 
Commission. Distressed counties are those that are most 
severely and persistently distressed and underdeveloped. 
Economically strong counties are those which have attained 
substantial economic parity with the rest of the Nation.
    The Commission may discontinue an existing designation, 
except that any designation of a distressed county shall remain 
in effect for three years.
    Funds may not be provided for a project in an economically 
competitive county, except for projects on the Appalachian 
Development Highway System, for local development districts, 
and discretionary grants authorized by section 302(a).

Section 220. Grant for administrative expenses and commission projects

    Amends section 302(a) of the Act to provide cost sharing 
limitations of 50 percent, with up to 80 percent allowed in 
distressed counties. Exceptions to these cost share limitations 
on 302(a) grants are made for regional initiatives or emergency 
situations. Total funds made available for discretionary grants 
may not exceed 10 percent of total non-highway authorizations 
under section 401.

Section 221. Authorization of appropriations for general program

    Amends section 401 of the Act to authorize for non-highway 
programs $67 million in 1999, $72 million in 2001, $75 million 
in 2002, and $80 million in 2003.

Section 222. Extension of termination date

    Amends section 405 of the Act to extend the termination 
date for the Commission to October 1, 2003.

                    Hearings and Legislative History

    The Subcommittee on Public Buildings and Economic 
Development held two days of hearings on July 10 and 17, 1997. 
Testimony was heard from the Assistant Secretary of Commerce 
for Economic Development, the ARC Federal Cochairman, a 
representative of the ARC states, and public witnesses.
    The subcommittee considered H.R. 4275 on July 22, 1998 and 
approved the measure on a voice vote without amendment. The 
Transportation and Infrastructure Committee considered H.R. 
4275 in full committee markup on July 24, 1998. A manager's 
amendment making technical changes was offered by Subcommittee 
Chairman Kim and adopted by voice vote. Subsequently, the bill 
was ordered reported by voice vote, a quorum being present. 
There were no Committee rollcall votes.

                             Rollcall Votes

    Clause 2(l)(2)(B) of rule XI requires each committee report 
to include the total number of votes cast for and against on 
each rollcall vote on a motion to report and on any amendment 
offered to the measure or matter, and the names of those 
members voting for and against. There were no recorded votes 
taken in connection with ordering H.R. 4275 reported, as 
amended. A motion by Mr. Kim to order H.R. 4275 reported to the 
House, as amended, was agreed to by voice vote, a quorum being 
present.

                      Committee Oversight Findings

    Clause 2(l)(3)(A) of rule XI requires each committee report 
to contain oversight findings and recommendations required 
pursuant to clause 2(b)(1) of rule X. The Committee's oversight 
findings and recommendations are reflected in this report.

                        Costs of the Legislation

    Clause 7 of rule XIII of the Rules of the House of 
Representatives does not apply where a cost estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974 has been timely submitted prior to the filing of the 
report and is included in the report. Such a cost estimate is 
included in this report.

                     Compliance With House Rule XI

    1. With respect the requirement of clause 2(l)(3)(B) of 
rule XI of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, the 
Committeereferences the report of the Congressional Budget 
Office included below.
    2. With respect to the requirement of clause 2(l)(3)(D) of 
rule XI of the Rules of the House of Representatives, the 
Committee on Transportation and Infrastructure has received no 
report of findings or recommendations from the Committee on 
Government reform and Oversight on the subject of H.R. 4275, as 
amended.
    3. With respect to the requirement of clause 2(l)(3)(C) of 
rule XI of the Rules of the House of Representatives and 
section 402 of the Congressional Budget Act of 1974, the 
Committee has received the following cost estimate for H.R. 
4275 from the Director of the Congressional Budget Office.

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, August 6, 1998.
Hon. Bud Shuster,
Chairman, Committee on Transportation and Infrastructure,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4275, the Economic 
Development Partnership Act of 1998.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Gary Brown 
(for federal costs) and Lisa Cash Driskill (for the state and 
local impact).
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).
    Enclosure.

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

H.R. 4275--Economic Development Partnership Act of 1998

    Summary: H.R. 4275 would reauthorize and modify programs 
administered by the Economic Development Administration (EDA) 
and the Appalachian Regional Commission (ARC). It would 
authorize the appropriation of $2.4 billion for these purposes 
over the 1999-2003 period. CBO estimates that $1.3 billion of 
that amount would be spent over the next five years, assuming 
appropriation of the authorized sums.
    The bill also would allow EDA to expend certain funds that, 
under current law, would not be spent. CBO estimates that such 
authority would result in direct spending of $10 million over 
fiscal years 1999 through 2002 (with no effect in fiscal year 
2003). Because H.R. 4275 would affect direct spending, pay-as-
you-go procedures would apply.
    The legislation contains no intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act 
(UMRA) and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the federal government: The estimated 
budgetary impact of H.R. 4275 is shown in the following table. 
The cost of this legislation fall within budget function 450 
(community and regional development).

                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                        1998      1999      2000      2001      2002      2003  
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION                                       
                                                                                                                
EDA and ARC spending under current law:                                                                         
    Budget authority................................       418         0         0         0         0         0
    Estimated outlays...............................       506       436       318       209        94        17
Proposed changes:                                                                                               
    Estimated authorization level...................         0       465       471       475       476       482
    Estimated outlays...............................         0        52       150       255       373       459
EDA and ARC spending under H.R. 4275:                                                                           
    Estimated authorization level \1\...............       418       465       471       475       476       482
    Estimated outlays...............................       506       488       468       464       467       476
                                                                                                                
                                           CHANGES IN DIRECT SPENDING                                           
                                                                                                                
Estimated budget authority..........................         0         0         0         0         0         0
Estimated outlays...................................         0         1         3         3         3         0
----------------------------------------------------------------------------------------------------------------
\1\ The 1998 level is the amount appropriated for that year for the programs that would be reauthorized by H.R. 
  4275.                                                                                                         

    Basis of estimate: For purpose of this estimate, CBO 
assumes that H.R. 4275 will be enacted by the beginning of 
fiscal year 1999 and that all amount authorized or estimated to 
be authorized by the bill will be appropriated for each year. 
Estimated outlays are based on historical rates of spending for 
the EDA and ARC programs.
            Spending subject to appropriation
    Economic Development Administration. H.R 4275 would 
authorize the appropriation of $368 million annually over the 
1999-2003 period for the economic development assistance 
programs of EDA. (The bill would not authorize funding for 
EDA's Trade Adjustment Assistance program.) Additionally, the 
bill would authorize such sums as necessary for administering 
these programs. Based on information provided by EDA, CBO 
estimates that administering these programs would require 
additional spending subject to appropriation of$30 million in 
1999, $31 million in 2000, $32 million in 2001, $33 million in 2002, 
and $34 million in 2003.
    The bill also would authorize such sums as necessary for 
assisting communities affected by the downsizing of the 
Department of Defense and Department of Energy. Based on 
information provided by EDA, CBO estimates that such additional 
funding would probably not be necessary unless the Congress 
enacts legislation requiring additional closings or reductions.
    Appalachian Regional Commission. H.R. 4275 would authorize 
the appropriation of $67 million in 1999, $72 million in 2000, 
$75 million in 2001, $75 million in 2002, and $80 million in 
2003 for the economic development programs of the ARC. The bill 
would not authorize funding for the Appalachian Development 
Highway System.
            Direct spending
    Expiring Funds. H.R. 4275 would allow recipients of EDA 
grants, under certain conditions, to use funds that, under 
current law, would not be spent because the scope or purpose of 
the project that they were originally provided for has changed 
or the cost of the project was lower than anticipated. As is 
the case under current law, EDA's authority to spend funds 
would continue to expire five years after the date on which 
such funds are obligated. CBO estimates that, under current 
law, about $10 million of previously appropriated funding will 
lapse each year over the 1999-2002 period. From those amounts, 
CBO estimates that, under H.R. 4275, about $1 million in 
additional outlays would occur in 1999 and about $3 million in 
additional outlays would occur for each of fiscal years 2000 
through 2002.
    Expanded Use of EDA Liquidating Account. Enacting H.R. 4275 
also would affect direct spending by authorizing EDA to use 
loan repayments to pay expenses associated with seizing, 
protecting, or convening assets. For example, under the bill, 
loan proceeds would be available for taking over property that 
was acquired with an EDA grant but is now being used for 
purposes that are inconsistent with the terms of the original 
grant. Once the property was acquired, the funds also could be 
used to pay the costs of transferring the land to nonfederal 
ownership (for example, the costs of conducting environmental 
impact statements). CBO expects that this authority would allow 
EDA to acquire or convey additional assets and that, on 
average, the proceeds that would result from conveying these 
assets would offset any increases in spending, resulting in no 
significant net change in direct spending for each year.
    Pay-as-you-go-considerations: The Balanced Budget and 
Emergency Deficit Control Act set up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. The net 
changes in outlays and governmental receipts that are subject 
to pay-as-you-go procedures are shown in the following table. 
For the purposes of enforcing pay-as-you-go procedures, only 
the effects in the current year, the budget year, and the 
succeeding for years are counted.

                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                      1998   1999   2000   2001   2002   2003   2004   2005   2006   2007   2008
----------------------------------------------------------------------------------------------------------------
Changes in outlays.................      0      1      3      3      3      0      0      0      0      0      0
Changes in receipts................                                                                             
(10) Not applicable                                                                                             
----------------------------------------------------------------------------------------------------------------

    Estimated impact on state, local and tribal governments: 
H.R. 4275 contains no intergovernmental mandates as defined in 
UMRA and would impose no costs on state, local, or tribal 
governments. The bill would reauthorize the Economic 
Development Administration and the Appalachian Regional 
Commission, with most of the money going to grants for public 
infrastructure and economic development activities. The bill 
would tighten the eligibility criteria for grant funding and 
generally drop the maximum federal match from 80 percent to 50 
percent, changes that would codify current practice for the two 
programs.
    The bill would also, under certain circumstances, expand 
the possible uses of grant funds provided for specific 
projects. Finally, it would establish pilot programs to provide 
loan guarantees for public works projects and to reduce 
interest rates on loans for economic development projects.
    Estimated impact on the private sector: The bill would 
impose no new private-sector mandates as defined in UMRA.
    Estimate prepared by: Federal costs--Gary Brown; impact on 
state, local, and tribal governments--Lisa Cash Driskill.
    Estimate approved by: Robert A. Sunshine, Deputy Assistant 
Director for Budget Analysis.

                   Constitutional Authority Statement

    Pursuant to clause (2)(l)(4) of rule XI of the Rules of the 
House of Representatives, committee reports on a bill or joint 
resolution of a public character shall include a statement 
citing the specific powers granted to the Congress in the 
Constitution to enact the measure. The Committee on 
Transportation and Infrastructure finds that Congress has the 
authority to enact this measure pursuant to its powers granted 
under article I, section 8 of the Constitution.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                Applicability to the Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

           PUBLIC WORKS AND ECONOMIC DEVELOPMENT ACT OF 1965

                         [statement of purpose

  [Sec. 2. The Congress declares that the maintenance of the 
national economy at a high level is vital to the best interests 
of the United States, but that some of our regions, counties, 
and communities are suffering substantial and persistent 
unemployment cause hardship to many individuals and their 
families, and waste invaluable human resources; that to 
overcome this problem the Federal Government, in cooperation 
with the States, should help areas and regions of substantial 
and persistent unemployment and underemployment to take 
effective steps in planning and financing their public works 
and economic development; that Federal financial assistance, 
including grants for public works and development facilities to 
communities, industries, enterprises, and individuals in areas 
needing development should enable such areas to help themselves 
achieve lasting improvement and enhance the domestic prosperity 
by the establishment of stable and diversified local economies 
and improved local conditions, provided that such assistance is 
preceded by and consistent with sound, long-range economic 
planning; and that under the provisions of this Act new 
employment opportunities should be created by developing and 
expanding new and existing public works and other facilities 
and resources rather than by merely transferring jobs from one 
area of the United States to another. Congress further declares 
that, in furtherance of maintaining the national economy at a 
high level, the assistance authorized by this Act should be 
made available to both rural and urban areas; that such 
assistance be available for planning for economic development 
prior to the actual occurrences of economic distress in order 
to avoid such condition; and that such assistance be used for 
long-term economic rehabilitation in areas where long-term 
economic deterioration has occurred or is taking place.

      [TITLE I--GRANTS FOR PUBLIC WORKS AND DEVELOPMENT FACILITIES

  [Sec. 101. (a) Upon the application of any State, or 
political subdivision thereof, Indian tribe, or private or 
public nonprofit organization or association representing any 
redevelopment area or part thereof, the Secretary of Commerce 
(hereinafter referred to as the Secretary) is authorized--
          [(1) to make direct grants for the acquisition or 
        development of land and improvements for public works, 
        public service, or development facility usage, and the 
        acquisition, construction, rehabilitation, alteration, 
        expansion, or improvement of such facilities, including 
        related machinery and equipment, within a redevelopment 
        area, if he finds that--
                  [(A) the project for which financial 
                assistance is sought will directly or 
                indirectly (i) tend to improve the 
                opportunities, in the area where such project 
                is or will be located, for the successful 
                establishment or expansion of industrial or 
                commercial plants or facilities, (ii) otherwise 
                assist in the creation of additional long-term 
                employment opportunities for such area, or 
                (iii) primarily benefit the long-term 
                unemployed and members of low-income families 
                or otherwise substantially further the 
                objectives of the Economic Opportunity Act of 
                1964;
                  [(B) the project for which a grant is 
                requested will fulfill a pressing need of the 
                area, or part thereof, in which it is, or will 
                be, located;
                  [(C) the area for which a project is to be 
                undertaken has an approved overall economic 
                development program as provided in section 
                202(b)(10) and such project is consistent with 
                such program; and
                  [(D) in the case of a redevelopment area so 
                designated under section 401(a)(6), the project 
                to be undertaken will provide immediate useful 
                work to unemployed and underemployed persons in 
                that area.
          [(2) to make supplementary grants in order to enable 
        the States and other entities within redevelopment 
        areas to take maximum advantage of designated Federal 
        grant-in-aid programs (as hereinafter defined), direct 
        grants-in-aid authorized under this section, and 
        Federal grant-in-aid programs authorized by the 
        Watershed Protection and Flood Prevention Act (68 Stat. 
        666, as amended), and the eleven watersheds authorized 
        by the Flood Control Act of December 22, 1944, as 
        amended and supplemented (58 Stat. 887), for which they 
        are eligible but for which, because of their economic 
        situation, they cannot supply the required matching 
        share.
  [(b) Subject to subsection (c) hereof, the amount of any 
direct grant under this section for any project shall not 
exceed 50 per centum of the cost of such project.
  [(c) The amount of any supplementary grant under this section 
for any project shall not exceed the applicable percentage 
established by regulations promulgated by the Secretary, but in 
no event shall the non-Federal share of the aggregate cost of 
any such project (including assumptions of debt) be less than 
20 per centum of such cost, except that in the case of a grant 
to an Indian tribe, the Secretary may reduce the non-Federal 
share below such per centum or may waive the non-Federal share.
  [In the case of any State or political subdivision thereof 
which the Secretary determines has exhausted its effective 
taxing and borrowing capacity, the Secretary shall reduce the 
non-Federal share below such per centum or shall waive the non-
Federal share in the case of such a grant for a project in a 
redevelopment area designated as such under section 401(a)(6) 
of this Act.
  [In case of any community development corporation which the 
Secretary determines has exhausted its effective borrowing 
capacity, the Secretary may reduce the non-Federal share below 
such per centum or waive the non-Federal share in the case of 
such a grant for a project in a redevelopment area designated 
as such under section 401(a)(6) of this Act.
  [Supplementary grants shall be made by the Secretary, in 
accordance with such regulations as he shall prescribe, by 
increasing the amounts of direct grants authorized under this 
section or by the payment of funds appropriated under this Act 
to the heads of the departments, agencies, and 
instrumentalities of the Federal Government responsible for the 
administration of the applicable Federal programs.
  [Notwithstanding any requirement as to the amount or sources 
of non-Federal funds that may otherwise be applicable to the 
Federal program involved, funds provided under this subsection 
shall be used for the sole purpose of increasing the Federal 
contribution to specific projects in redevelopment areas under 
such programs above the fixed maximum portion of the cost of 
such project otherwise authorized by the applicable law.
  [The term ``designated Federal grant-in-aid programs,'' as 
used in this subsection, means such existing or future Federal 
grant-in-aid programs assisting in the construction or 
equipping of facilities as the Secretary may, in furtherance of 
the purposes of this Act, designate as eligible for allocation 
of funds under this section.
  [In determining the amount of any supplementary grant 
available to any project under this section, the Secretary 
shall take into consideration the relative needs of the area, 
the nature of the projects to be assisted, and the amount of 
such fair user charges or other revenues as the project may 
reasonably be expected to generate in excess of those which 
would amortize the local share of initial costs and provide for 
its successful operation and maintenance (including 
depreciation).
  [(d) The Secretary shall prescribe rules, regulations, and 
procedures to carry out this section which will assure that 
adequate consideration is given to the relative needs of 
eligible areas. In prescribing such rules, regulations, and 
procedures the Secretary shall consider among other relevant 
factors (1) the severity of the rates of unemployment in the 
eligible areas and the duration of such unemployment and (2) 
the income levels of families and the extent of underemployment 
in eligible areas.
  [(f) The Secretary shall prescribe regulations which will 
assure that appropriate local governmental authorities have 
been given a reasonable opportunity to review and comment upon 
proposed projects under this section.
  [Sec. 102. For each of the fiscal years ending June 30, 1975, 
June 30, 1976, September 30, 1977, September 30, 1978, 
September 30, 1979, September 30, 1980, September 30, 1981, and 
September 30, 1982, not to exceed $30,000,000 of the funds 
authorized to be appropriated under section 105 of this Act for 
each such fiscal year, and for the period beginning July 1, 
1976, and ending September 30, 1976, not to exceed $7,500,000 
of the funds authorized to be appropriated under such section 
105 for such period, shall be available for grants for 
operation of any health project funded under this title after 
the date of enactment of this section. Such grants may be made 
up to 100 per centum of the estimated cost of the first year of 
operation, and up to 100 per centum of the deficit in funds 
available for operation of the facility during the second 
fiscal year of operation. No grant shall be made for the second 
fiscal year of operation of any facility unless the agency 
operating such facility has adopted a plan satisfactory to the 
Secretary of Health, Education, and Welfare, providing for the 
funding of operations on a permanent basis. Any grant under 
this section shall be made upon the condition that the 
operation of the facility will be conducted under efficient 
management practices designed to obviate operating deficits, as 
determined by the Secretary of Health, Education, and Welfare.
  [Sec. 103. Not more than 15 per centum of the appropriations 
made pursuant to this title may be expended in any one State.
  [Sec. 105. There is hereby authorized to be appropriated to 
carry out this title not to exceed $500,000,000 for the fiscal 
year ending June 30, 1966, and for each fiscal year thereafter 
through fiscal year ending June 30, 1971, not to exceed 
$800,000,000 per fiscal year for the fiscal years ending June 
30, 1972, and June 30, 1973, not to exceed $200,000,000 for the 
fiscal year ending June 30, 1974, and not to exceed 
$200,000,000 for the fiscal year ending June 30, 1975, and not 
to exceed $250,000,000 for the fiscal year ending June 30, 
1976, not to exceed $62,500,000 for the period beginning July 
1, 1976, and ending September 30, 1976, and not to exceed 
$425,000,000 per fiscal year for the fiscal years ending 
September 30, 1977, September 30, 1978, September 30, 1979, 
September 30, 1980, and September 30, 1981, and not to exceed 
$150,000,000 for the fiscal year ending September 30, 1982. Any 
amounts authorized for the fiscal year ending June 30, 1972, 
under this section but not appropriated may be appropriated for 
the fiscal year ending June 30, 1973. Not less than 25 per 
centum nor more than 35 per centum of all appropriations made 
for the fiscal years ending June 30, 1972, June 30, 1973, and 
June 30, 1974, and not less than 15 per centum nor more than 35 
per centum of all appropriations made for the fiscal years 
ending June 30, 1975 and June 30, 1976, the period beginning 
July 1, 1976, and ending September 30, 1976, and the fiscal 
years ending September 30, 1977, September 30, 1978, September 
30, 1979, September 30, 1980, September 30, 1981, and September 
30, 1982, under authority of the preceding sentences shall be 
expended in redevelopment areas designated as such under 
section 401(a)(6) of this Act.

               [financial assistance for sewer facilities

  [Sec. 106. No financial assistance, through grants, loans, 
guarantees, or otherwise, shall be made under this Act to be 
used directly or indirectly for sewer or other waste disposal 
facilities unless the Secretary of Health, Education, and 
Welfare certifies to the Secretary that any waste material 
carried by such facilities will be adequately treated before it 
is discharged into any Public waterway so as to meet applicable 
Federal, State, interstate, or local water quality standards.

                      [construction cost increases

  [Sec. 107. In any case where a grant (including a 
supplemental grant) has been made under this title for a 
project and after such grant has been made but before 
completion of the project, the cost of such project based upon 
the designs and specifications which were the basis of the 
grant has been increased because of increases in costs, the 
amount of such grant may be increased by an amount equal to the 
percentage increase, as determined by the Secretary, in such 
costs, but in no event shall the percentage of the Federal 
share of such project exceed that originally provided for in 
such grant.

                 [TITLE II--OTHER FINANCIAL ASSISTANCE

              [public works and development facility loans

  [Sec. 201. (a) Upon the application of any State, or 
political subdivision thereof, Indian tribe, or private or 
public nonprofit organization or association representing any 
redevelopment area or part thereof, the Secretary is authorized 
to purchase evidence of indebtedness and to make loans to 
assist in financing the purchase or development of land and 
improvements for public works, public service, or development 
facility usage, including public works, public service, or 
development facility usage, to be provided by agencies of the 
Federal Government pursuant to legislation requiring that non-
Federal entities bear some part of the cost thereof, and the 
acquisition, construction, rehabilitation, alteration, 
expansion, or improvement of such facilities, including related 
machinery and equipment, within a redevelopment area, if he 
finds that--
          [(1) the project for which financial assistance 
        sought will directly or indirectly--
                  [(A) tend to improve the opportunities, in 
                the area where such project is or will be 
                located, for the successful establishment or 
                expansion of industrial or commercial plants or 
                facilities,
                  [(B) otherwise assist in the creation of 
                additional long-term employment opportunities 
                for such area, or
                  [(C) primarily benefit the long-term 
                unemployed and members of low-income families 
                or otherwise substantially further the 
                objectives of the Economic Opportunity Act of 
                1964;
          [(2) the funds requested for such project are not 
        otherwise available from private lenders or from other 
        Federal agencies on terms which in the opinion of the 
        Secretary will permit the accomplishment of the 
        project;
          [(3) the amount of the loan plus the amount of other 
        available funds for such project are adequate to insure 
        the completion thereof;
          [(4) there is a reasonable expectation of repayment; 
        and
          [(5) such area has an approved overall economic 
        development program as provided in section 202(b)(10) 
        and the project for which financial assistance is 
        sought is consistent with such program.
  [(b) Subject to section 710(5), no loan, including renewals 
or extensions thereof, shall be made under this section for a 
period exceeding forty years, and no evidence of indebtedness 
maturing more than forty years from the date of purchase shall 
be purchased under this section. Such loans shall bear interest 
at a rate not less than a rate determined by the Secretary of 
the Treasury taking into consideration the current average 
market yield on outstanding marketable obligations of the 
United States with remaining periods to maturity comparable to 
the average maturities of such loans, adjusted to the nearest 
one-eight of 1 per centum, less not exceed one-half of 1 per 
centum per annum.
  [(c) There are hereby authorized to be appropriated such sums 
as may be necessary to carry out the provisions of this section 
and section 202, except that annual appropriations for the 
purposes of purchasing evidence of indebtedness, paying 
interest supplement to or on behalf of private entities making 
and participating in loans, and guaranteeing loans, shall not 
exceed $170,000,000 for the fiscal year ending June 30, 1966, 
and for each fiscal year thereafter through the fiscal year 
ending June 30, 1973, and shall not exceed $55,000,000 for the 
fiscal year ending June 30, 1974, and shall not exceed 
$75,000,000 for the fiscal years ending June 30, 1975, and June 
30, 1976, and shall not exceed $18,750,000 for the period 
beginning July 1, 1976, and ending September 30, 1976, and 
shall not exceed $200,000,000 per fiscal year for the fiscal 
years ending September 30, 1977, September 30, 1978, September 
30, 1979, September 30, 1980, and September 30, 1981, and not 
to exceed $46,500,000 for the fiscal year ending September 30, 
1982.
  [(e) The Secretary shall prescribe regulations which will 
assure that appropriate local governmental authorities have 
been given a reasonable opportunity to review and comment upon 
proposed projects under this section.

                         [loans and guarantees

  [Sec. 202. (a)(1) The Secretary is authorized to aid in 
financing, within a redevelopment area, the purchase or 
development of land and facilities (including machinery and 
equipment) for industrial or commercial usage, including the 
construction of new buildings, the rehabilitation of abandoned 
or unoccupied buildings, and the alteration, conversion, or 
enlargement of existing buildings by (A) purchasing evidences 
of indebtedness, (B) making loans (which for purposes of this 
section shall include participation in loans). (C) guaranteeing 
loans made to private borrowers by private lending 
institutions, for any of the purposes referred to in this 
paragraph upon application of such institution and upon such 
terms and conditions as the Secretary may prescribe, except 
that no such guarantee shall at any time exceed 90 per centum 
of the amount of the outstanding unpaid balance of such loan.
  [(2) In addition to any other financial assistance under this 
title, the Secretary is authorized, in the case of any loan 
guarantee under authority of paragraph (1) of this section, to 
pay to or on behalf of the private borrower an amount 
sufficient to reduce up to 4 percentage points the interest 
paid by such borrower on such guaranteed loans. No payment 
under this paragraph shall result in the interest rate being 
paid by a borrower on such a guaranteedloan being less than the 
rate of interest for such a loan if it were made under section 201 of 
this Act. Payment made to or on behalf of such borrower shall be made 
no less often than annually.
  [(3) The Secretary is authorized to aid in financing any 
industrial or commercial activity within a redevelopment area 
by (A) making working capital loans, (B) guaranteeing working 
capital loans made to private borrowers by private lending 
institutions upon application of such institution and upon such 
terms and conditions as the Secretary may prescribe, except 
that no such guarantee shall at any time exceed 90 per centum 
of the amount of the outstanding unpaid balance of such loan, 
(C) guaranteeing rental payment of leases for buildings and 
equipment, except that no such guarantee shall exceed 90 per 
centum of the remaining rental payments required by the lease, 
(D) paying those debts with respect to which a lien against 
property has been legally obtained (including the refinancing 
of any such debt) in any case where the Secretary determines 
that it is essential to do so in order to save employment in a 
designated area, to avoid a significant rise in unemployment, 
or to creat new or increased employment.
  [(b) Financial assistance under this section shall be on such 
terms and conditions as the Secretary determines, subject, 
however, to the following restrictions and limitations:
  [(1) Such financial assistance shall not be extended to 
assist establishments relocating from one area to another or to 
assist subcontractors whose purpose is to divest, or whose 
economic success is dependent upon divesting, other contractors 
or subcontractors of contracts theretofore customarily 
performed by them: Provided, however, That such limitations 
shall not be construed to prohibit assistance for the expansion 
of an existing business entity through the establishment of a 
new branch, affiliate, or subsidiary of such entity if the 
Secretary finds that the establishment of such branch, 
affiliate, or subsidiary will not result in increase in 
unemployment of the area of original location or in any other 
area where such entity conducts business operations, unless the 
Secretary has reason to believe that such branch, affiliate, or 
subsidiary is being established with the intention of closing 
down the operations of the existing business entity in the area 
of its original location or in any other area where it conducts 
such operations.
  [(2) Such assistance shall be extended only to applicants, 
both private and public (including Indian tribes), which have 
been approved for such assistance by an agency or 
instrumentality of the State or political subdivision thereof 
in which the project to be financed is located, and which 
agency or instrumentality is directly concerned with problems 
of economic development in such State or subdivision.
  [(3) The project for which financial assistance is sought 
must be reasonably calculated to provide more than a temporary 
alleviation of unemployment or underemployment within the 
redevelopment area wherein it is or will be located.
  [(4) No loan or guarantee shall be extended hereunder unless 
the financial assistance applied for is not otherwise available 
from private lenders or from other Federal agencies on terms 
which in the opinion of the Secretary will permit the 
accomplishment of the project.
  [(5) The Secretary shall not make any loan without a 
participation unless he determines that the loan cannot be made 
on a participation basis.
  [(6) No evidence of indebtedness shall be purchased and no 
loans shall be made or guaranteed unless it is determined that 
there is reasonable assurance of repayment.
  [(7) Subject to section 701(5) of this Act, no loan or 
guarantee, including renewals or extension thereof, may be made 
hereunder for a period exceeding twenty-five years and no 
evidences of indebtedness maturing more than twenty-five years 
from date of purchase may be purchased hereinder: Provided, 
That the foregoing restrictions on maturities shall not apply 
to securities or obligations received by the Secretary as a 
claimant in bankruptcy or equitable reorganization or as a 
creditor in other proceedings attendant upon insolvency of the 
obligor.
  [(8) Loans made and evidences if indebtedness purchased under 
this section shall bear interest at a rate not less than a rate 
determined by the Secretary of the Treasury taking into 
consideration the current average market yield on outstanding 
marketable obligations of the United States with remaining 
periods to maturity comparable to the average maturities of 
such loans, adjusted to the nearest one-eighth of 1 per centum, 
plus additional charge, if any, toward covering other costs of 
the program as the Secretary may determine to be consistent 
with its purpose.
  [(9) Loan assistance (other than for a working capital loan) 
shall not exceed 65 per centum of the aggregate cost to the 
applicant (excluding all other Federal aid in connection with 
the undertaking) of acquiring or developing land and facilities 
(including machinery and equipment), and of constructing, 
altering, converting, rehabilitating, or enlarging the building 
or buildings of the particular project, and shall, among 
others, be on the condition that--
          [(A) other funds are available in an amount which 
        which together with the assistance provided hereunder, 
        shall be sufficient to pay such aggregate cost;
          [(B) not less than 15 per centum of such aggregate 
        cost be supplied as equity capital or as a loan 
        repayable in no shorter period of time and at no faster 
        an amortization rate than the Federal financial 
        assistance extended under this section is being repaid, 
        and if such a loan is secured, its security shall be 
        subordinate and inferior to the lien or liens securing 
        such Federal financial assistance: Provided, however, 
        That, except in projects involving financial 
        participation by Indian tribes, not less than 5 per 
        centum of such aggregate cost shall be supplied by the 
        State or any agency, instrumentality, or political 
        subdivision thereof, or by a community or area 
        organization which is nongovernmental in character, 
        unless the Secretary shall determine in accordance with 
        the objective standards promulgated by regulation that 
        all or part of such funds are not reasonably available 
        to the project because of the economic distress of the 
        area or for other good cause, in which case he may 
        waive the requirement of this provision to the extent 
        of such unavailability, and allow the funds required by 
        this subsection to be supplied by the applicant or by 
        such other non-Federal source as may reasonably be 
        available to the project;
          [(C) to the extent the Secretary finds such action 
        necessary to encourage financial participation in a 
        particular project by other lenders and investors, and 
        except as otherwise provided in subparagraph (B), any 
        Federal financial assistance extended under this 
        section may be repayable only after other loans made in 
        connection with such project have been repaid in full, 
        and the security, if any, for such Federal financial 
        assistance may be subordinate and inferior to the lien 
        or liens securing other loans made in connection with 
        the same project.
  [(10) No such assistance shall be extended unless there shall 
be submitted to and approval of the Secretary an overall 
program for the economic development of the area and a finding 
by the State, or any agency, instrumentality, or local 
political subdivision thereof, that the project for which 
financial assistance is sought is consistent with such program: 
Provided, That nothing in this Act shall authorize financial 
assistance for any project prohibited by laws of the State or 
local political subdivision in which the project would be 
located, nor prevent the Secretary from requiring such periodic 
revisions of previously approved overall economic development 
programs as he may deem appropriate.

                      [economic development funds

  [Sec. 203. Funds obtained by the Secretary under section 201; 
loan funds obtained under section 403, and collections and 
repayments received under this Act, shall be deposited in an 
economic development revolving fund (hereunder referred to as 
the ``fund''), which is hereby established in the Treasury of 
the United States, and which shall be available to the 
Secretary for the purpose of extending financial assistance 
under sections 201, 202, and 403, and for the payment of all 
obligations and expenditures arising in connection therewith. 
There shall also be credited to the fund such funds as have 
been paid into the area development fund or may be received 
from obligations outstanding under the Area Redevelopment Act. 
The fund shall pay into miscellaneous receipts of the Treasury, 
following the close of each fiscal year, interest on the amount 
of loans outstanding under this Act computed in such manner and 
at such rate as may be determined by the Secretary of the 
Treasury taking into consideration the current average market 
yield on outstanding marketable obligations of the United 
States with remaining periods to maturity comparable to the 
average maturities of such loans, adjusted to the nearest one-
eighth of 1 per centum, during the month of September preceding 
the fiscal year in which the loans were made.

                    [redevelopment area loan program

  [Sec. 204. (a) If a redevelopment area prepares a plan for 
the redevelopment of the area or a part thereof and submits 
such plan to the Secretary for his approval and the Secretary 
approves such plan, the Secretary is authorized to make an 
interest free loan to such area for the purpose of carrying out 
such plan. Such plan may include industrial land assembly, land 
banking, acquisition of surplus government property, 
acquisition of industrial sites including acquisition of 
abandoned properties with redevelopment potential, real estate 
development including redevelopment and rehabilitationof 
historical buildings for industrial and commerical use, rehabilitation 
and renovation of usable empty factory buildings for industrial and 
commerical use, and other investments which will accelerate recycling 
of land and facilities for job creating economic activity. Any such 
interest free loan shall be made on condition (1) that the area will 
use such interest free loan to make loans to carry out such plan, (2) 
the repayment of any loan made by the area from such interest free loan 
shall be placed by such area in a revolving fund available solely for 
the making of other loans by the area, upon approval by the Secretary, 
for the economic redevelopment of the area. Any such interest free loan 
shall be repaid to the United States by a redevelopment area whenever 
such area has its designation as a redevelopment area terminated or 
modified under section 402 of this Act. This section shall not apply to 
any redevelopment area whose designation as a redevelopment area would 
be terminated or modified under section 402 of this Act except for the 
provisions of section 2 of the Act entitled ``An Act to amend the 
Public Works and Economic Development Act of 1965 to extend the 
authorizations for title I through IV through fiscal year 1971'', 
approved July 6, 1970 (P.L. 91-304).
  [(b)(1) Each eligible recipient which receives assistance 
under this section shall annually during the period such 
assistance continues make a full and complete report to the 
Secretary, in such manner as the Secretary shall prescribe, and 
such report shall contain an evaluation of the effectiveness of 
the economic assistance provided under this section in meeting 
the need it was designed to alleviate and the purposes of this 
section.
  [(2) The Secretary shall include in the annual report 
pursuant to section 707 of this Act a consolidated report with 
his recommendations, if any, on the assistance authorized under 
this section, in a form which he deems appropriate.
  [(c) There is authorized to be appropriated to carry out this 
section not to exceed $125,000,000 per fiscal year for the 
fiscal years ending September 30, 1977, and September 30, 1979, 
September 30, 1980, and September 30, 1981.

      [TITLE III--TECHNICAL ASSISTANCE, RESEARCH, AND INFORMATION

  [Sec. 301. (a) In carrying out his duties under this Act the 
Secretary is authorized to provide technical assistance which 
would be useful in alleviating or preventing conditions of 
excessive unemployment or underemployment (1) to areas which he 
has designated as redevelopment areas under this Act, and (2) 
to other areas which he finds have substantial need for such 
assistance. Such assistance shall include project planning and 
feasibility studies, management and operational assistance, and 
studies evaluating the needs of, and development potentialities 
for, economic growth of such areas. Such assistance may be 
provided by the Secretary through members of his staff, through 
the payment of funds authorized for this section to other 
departments or agencies of the Federal Government, through the 
employment of private individuals, partnerships, firms, 
corporations, or suitable institutions, under contracts entered 
into for such purposes, or through grants-in-aid to appropriate 
public or private nonprofit State, area, district, or local 
organizations. The Secretary, in his discretion, may require 
the repayment of assistance provided under this subsection and 
prescribe the terms and conditions of such repayment.
  [(b) The Secretary is authorized to make grants to defray not 
to exceed 75 per centum of the administrative expenses of 
organizations which he determines to be qualified to receive 
grants-in-aid under subsection (a) hereof, except that in the 
case of a grant under this subsection to an Indian tribe the 
Secretary is authorized to defray up to 100 per centum of such 
expenses. In determining the amount of the non-Federal share of 
such costs or expenses, the Secretary shall give due 
consideration to all contributions both in cash and in kind, 
fairly evaluated, including but not limited to space, 
equipment, and services. Where practicable grants-in-aid 
authorized under this subsection shall be used in conjunction 
with other available planning grants, such as urban planning 
grants, authorized under the Housing Act of 1954, as amended, 
and highway planning and research grants authorized under the 
Federal-aid Highway Act of 1962, to assure adequate and 
effective planning and economical use of funds.
  [(c) To assist in the long-range accomplishment of the 
purposes of this Act, the Secretary, in cooperation with other 
agencies having similar functions, shall establish and conduct 
a continuing program of study, training, and research to (A) 
assist in determining the causes of unemployment, 
underemployment, underdevelopment, and chronic depression in 
the various areas and regions of the Nation, (B) assist in the 
formulation and implementation of national, State, and local 
programs which will raise income levels and otherwise produce 
solutions to the problems resulting from these conditions, and 
(C) assist in providing the personnel needs to conduct such 
programs. The program of study, training, and research may be 
conducted by the Secretary through members of his staff, 
through payment of funds authorized for this section to other 
departments or agencies of the Federal Government, or through 
the employment of private individuals, partnerships, firms, 
corporations, or suitable institutions, under contracts entered 
into for such purposes, or through grants to such individuals, 
organizations, or institutions, or through conferences, and 
similar meetings organized for such purposes. The Secretary 
shall make available to interested individuals and 
organizations the results of such research. The Secretary shall 
include in his annual report under section 707 a detailed 
statement concerning the study and research conducted under 
this section together with his findings resulting therefrom and 
his recommendations for legislative and other action.
  [(d) The Secretary shall aid redevelopment areas and other 
areas by furnishing to interested individuals, communities, 
industries, and enterprises within such areas any assistance, 
technical information, market research, or other forms of 
assistance, information, or advice which would be useful in 
alleviating or preventing conditions of excessive unemployment 
or underemployment within such areas. The Secretary may furnish 
the procurement divisions of the various departments, agencies, 
and other instrumentalities of the Federal Government with a 
list containing the names and addresses of business firms which 
are located in redevelopment areas and which are desirous of 
obtaining Government contractsfor the furnishing of supplies or 
services, and designating the supplies and services such firms are 
engaged in providing.
  [(e) The Secretary shall establish an independent study board 
consisting of governmental and on governmental experts to 
investigate the effects of Government procurement, scientific, 
technical, and other related policies, upon regional economic 
development. Any Federal officer or employee may, with the 
consent of the head of the department or agency in which he is 
employed, serve as a member of such board, but shall receive no 
additional compensation for such service. Other members of such 
board may be compensated in accordance with the provisions of 
section 701(10). The board shall report its findings, together 
with recommendations for the better coordination of such 
policies, to the Secretary, who shall transmit the report to 
the Congress not later than two years after the enactment of 
this Act.
  [(f) The Secretary is authorized to make grants, enter into 
contracts or otherwise provide funds for any demonstration 
project within a redevelopment area or areas which he 
determines is designed to foster regional productivity and 
growth, prevent out migration, and otherwise carry out the 
purposes of this Act.
  [Sec. 302. (a) The Secretary is authorized, upon application 
of any State, or city, or other political subdivision of a 
State, or sub-State planning and development organization 
(including a redevelopment area or an economic development 
district), to make direct grants to such State, city, or other 
political subdivision, or organization to pay up to 80 per 
centum of the cost for economic development planning. The 
planning for cities, other political subdivisions, and sub-
State planning and development organizations (including 
redevelopment areas and economic development districts) 
assisted under this section shall include systematic efforts to 
reduce unemployment and increase incomes. Such planning shall 
be a continuous process involving public officials and private 
citizens in analyzing local economics, defining development 
goals, determining project opportunities, and formulating and 
implementing a development program. Any overall State economic 
development plan prepared with assistance under this section 
shall be prepared cooperatively by the State, its political 
subdivisions, and the economic development districts located in 
whole or in part within such State. Upon completion of any such 
plan, the State shall certify to the Secretary (1) that in the 
preparation of such State plan, the local and economic 
development district plans were considered and, to the fullest 
extent possible, such State plan is consistent with such local 
and economic development district plans, and (2) that such 
State plan is consistent, with such local and economic 
development district plans, or, if such State plan is not 
consistent with such local and economic development district 
plans, all of the inconsistencies of the State plan with the 
local and economic development district plans, and the 
justification for each of these inconsistencies. Any overall 
State economic development planning shall be a part of a 
comprehensive planning process that shall consider the 
provision of public works to stimulate and channel development, 
economic opportunities and choices for individuals; to support 
sound land use, to enhance and protect the environment 
including the conservation and preservation of open spaces and 
environmental quality, to provide public services, and to 
balance physical and human resources through the management and 
control of physical development. The assistance available under 
this section may be provided in addition to assistance 
available under section 301(b) of this Act but shall not 
supplant such assistance and shall be available to develop an 
annual inventory of specific recommendations for assistance 
under section 304 of this Act. Each State receiving assistance 
under this subsection shall submit to the Secretary an annual 
report on the planning process assisted under this subsection.
  [(b) In addition, the Secretary is authorized to assist 
economic development districts in--
          [(1) providing technical assistance (other than by 
        grant) to local governments within the district; and
          [(2) carrying out any review procedure required 
        pursuant to title IV of the Intergovernmental 
        Cooperation Act of 1968, if such district has been 
        designated as the agency to conduct such review.
  [(c) The planning assistance authorized under this title 
shall be used in accordance with the review procedure required 
pursuant to title IV of the Intergovernmental Cooperation Act 
of 1968 and shall be used in conjunction with any other 
available Federal planning assistance to assure adequate and 
effective planning and economical use of funds.
  [Sec. 303. (a) There is hereby authorized to be appropriated 
$25,000,000 annually for the purposes of Sections 301 and 302 
of this Act, for the fiscal year ending June 30, 1966, and for 
each fiscal year thereafter through the fiscal year ending June 
30, 1969, $50,000,000 per fiscal year for the fiscal years 
ending June 30, 1970, June 30, 1971, June 30, 1972, and June 
30, 1973, and $35,000,000 for the fiscal year ending June 30, 
1974 and $75,000,000 per fiscal year for the fiscal years 
ending June 30, 1975, and June 30, 1976, $18,750,000 for the 
period beginning July 1, 1976, and ending September 30, 1976, 
and $75,000,000 per fiscal year for the fiscal years ending 
September 30, 1977, September 30, 1978, September 30, 1979, 
September 30, 1980, and September 30, 1981, and not to exceed 
$35,500,000 for the fiscal year ending September 30, 1982.
  [(b) Not to exceed $15,000,000 in each of the fiscal years 
ending June 30, 1975, and June 30, 1976. September 30, 1977, 
September 30, 1978, September 30, 1979, September 30, 1980, 
September 30, 1981, and September 30, 1982, of the sums 
authorized to be appropriated under subsection (a) of this 
section, shall be available to make grants to States.

                     [supplemental and basic grants

  [Sec. 304. (a) There are hereby authorized to be appropriated 
$35,000,000 for the fiscal year ending June 30, 1975, and 
$75,000,000 for the fiscal year ending June 30, 1976, 
$18,750,000 for the period beginning July 1, 1976, and ending 
September 30, 1976, and $75,000,000 per fiscal year for the 
fiscal year ending September 30, 1977, September 30, 1978, 
September 30, 1979, September 30, 1980, and September 30, 1981, 
for apportionment by the Secretary among the States for the 
purpose of supplementingor making grants and loans authorized 
under titles I, II, III (other than planning grants authorized under 
sections 301(b) and 302), IV, and IX of this Act. Such funds shall be 
apportioned among the States in the ratio which all grants made under 
title I of this Act since August 26, 1965, in each State bear to the 
total of all such grants made in all the States since August 26, 1965.
  [(b) Funds apportioned to a State pursuant to subsection (a) 
shall be available for supplementing or making such grants or 
loans if the State makes a contribution of at least 25 per 
centum of the amount of such grant or loan in each case. Funds 
apportioned to a State under subsection (a) shall remain 
available to such State until obligated or expended by it.
  [(c) Funds apportioned to a State pursuant to this section 
may be used by the Governor in supplementing grants or loans 
with respect to any project or assistance authorized under 
titles I, II, III (other than planning grants authorized under 
sections 301(b) and 302), IV, or IX of this Act, and approved 
by the Secretary after July 1, 1974. Such grants may be used to 
reduce or waive the non-Federal share otherwise required by 
this Act, subject to the requirements of subsection (b) of this 
section.
  [(d) In the case of any grant or loan for which all or any 
portion of the basic Federal contribution to the project under 
this Act is proposed to be made with funds available under this 
section, no such Federal contribution shall be made until the 
Secretary of Commerce certifies that such project meets all of 
the requirements of this Act and could be approved for Federal 
contributions under this Act if funds were available under this 
Act (other than section 509) for such project. Funds may be 
provided for projects in a State under this section only if the 
Secretary determines that the level of Federal and State 
financial assistance under this Act (other than section 509) 
and under Acts other than this Act, for the same type of 
projects in the State, will not be diminished in order to 
substitute funds authorized by this section.
  [(e) After June 30, 1975, funds apportioned to a State 
pursuant to this section shall be used by the Governor in a 
manner which is consistent with the State planning process 
assisted under section 302 of this Act, if such planning 
process has been established in such State.

                [TITLE IV--AREA AND DISTRICT ELIGIBILITY

                      [Part A--Redevelopment Areas

                           [area eligibility

  [Sec. 401. (a) The Secretary shall designate as 
``redevelopment areas''--
          [(1) those areas in which he determines, upon the 
        basis of standards generally comparable with those set 
        forth in paragraphs (A) and (B), that there has existed 
        substantial and persistent unemployment for an extended 
        period of time and those areas in which he determines 
        there has been a substantial loss of population due to 
        lack of employment opportunity. There shall be included 
        among the areas so designated any area--
                  [(A) where the Secretary of Labor finds that 
                the current rate of unemployment, as determined 
                by appropriate annual statistics for the most 
                recent twelve consecutive months, is 6 per 
                centum or more and has averaged at least 6 per 
                centum for the qualifying time periods 
                specified in paragraph (B); and
                  [(B) where the Secretary of Labor finds that 
                the annual average rate of unemployment has 
                been at least--
                          [(i) 50 per centum above the national 
                        average for three of the preceding four 
                        calendar years, or
                          [(ii) 75 per centum above the 
                        national average for two of the 
                        preceding three calendar years, or
                          [(iii) 100 per centum above the 
                        national average for one of the 
                        preceding two calendar years.
        The Secretary of Labor shall find the facts and provide 
        the data to be used by the Secretary in making the 
        determinations required by this subsection;
          [(2) those additional areas which have a median 
        family income not in excess of 50 per centum of the 
        national median, as determined by the most recent 
        available statistics for such areas;
          [(3) those additional Federal or State Indian 
        reservations or trust or restricted Indian-owned land 
        areas which the Secretary, after consultation with the 
        Secretary of the Interior or an appropriate State 
        agency, determines manifest the greatest degree of 
        economic distress on the basis of unemployment and 
        income statistics and other appropriate evidence of 
        economic underdevelopment; Provided, however, That 
        uninhabited Federal or State Indian reservations or 
        trust or restricted Indian-owned land areas may be 
        designated where such designation would permit 
        assistance to Indian tribes, with a direct beneficial 
        effect on the economic well-being of Indians;
          [(4) upon request of such areas, those additional 
        areas in which the Secretary detemines that the loss, 
        removal, curtailment, or closing of a major source of 
        employment has caused within three years prior to, or 
        threatens to cause within three years after, the date 
        of the request an unusual and abrupt rise in 
        unemployment of such magnitude that the unemployment 
        rate for the area at the time of the request exceeds 
        the national average, or can reasonably be expected to 
        exceed the national average, by 50 per centum or more 
        unless assistance is provided. Notwithstanding any 
        provision of subsection 401(b) to the contrary, an area 
        designated under the authority of this paragraph may be 
        given a reasonable time after designation in which to 
        submit the overall economic development program 
        required by subsection 202(b)(10) of this Act;
          [(5) notwithstanding any provision of this section to 
        the contrary, those additional areas which were 
        designated redevelopment areas under the Area 
        Redevelopment Act on or after March 1, 1965; Provided, 
        however, That the continued eligibility of such areas 
        after the first annual review of eligibility conducted 
        in accordance with section 402 of this Act shall be 
        dependent on their qualification for designation under 
        thestandards of economic need set forth in subsections 
(a)(1) through (a)(4) of this section;
          [(6) those communities or neighborhoods (defined 
        without regard to political or other subdivisions or 
        boundaries) which the Secretary determines have one of 
        the following conditions:
                  [(A) a large concentration of low-income 
                persons;
                  [(B) rural areas having substantial 
                outmigration;
                  [(C) substantial unemployment; or
                  [(D) an actual or threatened abrupt rise of 
                unemployment due to the closing or curtailment 
                of a major source of employment.
        No redevelopment area established under this paragraph 
        shall be subject to the requirements of subparagrphs 
        (A) and (C) of paragraph (1) of subsection (a) of 
        section 101 of this Act. No redevelopment area 
        established under this paragraph shall be eligible to 
        meet the requirements of section 403(a)(1)(B) of this 
        Act;
          [(7) those areas where per capita employment has 
        declined significantly during the next preceding ten-
        year period for which appropriate statistics are 
        available;
          [(8) those areas which the Secretary of Labor 
        determines, on the basis of average annual available 
        unemployment statistics, to have experienced 
        unemployment which is both substantial and above the 
        national average for the preceding twenty-four months;
          [(9) those areas which the Secretary determines have 
        demonstrated long-term economic deterioration.
    [(b) The size and boundaries of redevelopment areas shall 
be as determined by the Secretary: Provided, however, That--
          [(1) no area shall be designated until it has an 
        approved overall economic development program in 
        accordance with subsection 202(b)(10) of this Act;
          [(2) any area which does not submit an acceptable 
        overall economic development program in accordance with 
        subsection 202(b)(10) of this Act within the reasonable 
        time after notification of eligibility for designation, 
        shall not thereafter be designated prior to the next 
        annual review of elibility in accordance with section 
        402 of this Act;
          [(3) no area shall be designated which does not have 
        a population of at least one thousand five hundred 
        persons, except that this limitation shall not apply to 
        any area designated under section 401 (a)(3) or (a)(6); 
        and
          [(4) except for areas designated under subsections 
        (a)(3), (a)(4) and (a)(6) hereof, no area shall be 
        designated which is smaller than a ``labor area'' (as 
        defined by the Secretary of Labor), a country, or 
        municipality with a population of over twenty-five 
        thousand, whichever in the opinion of the Secretary is 
        appropriate. Nothing in this subsection shall prevent 
        any municipality, designated as a redevelopment area or 
        eligible to be designated as a redevelopment area, from 
        combining with any other community having mutual 
        economic interests and transportation and marketing 
        patterns for the purposes of such designation.
  [(c) Upon the request of the Secretary, the Secretary of 
Labor, the Secretary of Agriculture, the Secretary of the 
Interior, and such other heads of agencies as may be 
appropriate are authorized to conduct such special studies, 
obtain such information, and compile and furnish to the 
Secretary such data as the Secretary may deem necessary or 
proper to enable him to make the determinations provided for in 
this section. The Secretary shall reimburse when appropriate, 
out of any funds appropriated to carry out the purposes of this 
Act, the foregoing officers for any expenditures incurred by 
them under this section.
  [(d) If a State has no area designated under the preceding 
subsections of this section as a redevelopment area, the 
Secretary shall designate as a redevelopment area that area in 
such State which in his opinion most nearly qualifies under 
such preceding subsections. An area so designated shall have 
its eligibility terminated in accordance with the provisions of 
section 402 if any other area within the same State 
subsequently has become qualified or been designated under any 
other subsection of this section other than subsection (a)(6) 
as of the time of the annual review prescribed by section 402: 
Provided, That the Secretary shall not terminate any 
designation of an area in a State as a redevelopment area if to 
do so would result in such State having no redevelopment area.
  [(e) As used in this Act, the term ``redevelopment area'' 
refers to any area within the United States which has been 
designated by the Secretary as a redevelopment area.

                   [annual review of area eligibility

  [Sec. 402. The Secretary shall conduct an annual review of 
all areas designated in accordance with section 401 of this 
Act, and on the basis of such reviews shall terminate or modify 
such designation whenever such an area no longer satisfies the 
designation requirements of section 401, but in no event shall 
such designation of an area be terminated prior to the 
expiration of the third year after the date such area was so 
designated. No area previously designated shall retain its 
designated status unless it maintains a currently approved 
overall economic development program in accordance with 
subsection 202(b)(10). No termination of eligibility shall (1) 
be made without thirty days' prior notification to the area 
concerned, (2) affect the validity of any application filed, or 
contract or undertaking entered into, with respect to such area 
pursuant to this Act prior to such termination, (3) prevent any 
such area from again being designated a redevelopment area 
under section 401 of this Act if the Secretary determines it to 
be eligible under such section, or (4) be made in the case of 
any designated area where the Secretary determines that an 
improvement in the unemployment rate of a designated area is 
primarily the result of increased employment in occupations not 
likely to be permanent, The Secretary shall keep the 
departments and agencies of the Federal Government, and 
interested State or local agencies, advised at all times of any 
changes made hereunder with respect to the classification of 
any area.

                [Part B--Economic Development Districts

  [Sec. 403. (a) In order that economic development projects of 
broader geographic significance may be planned and carried out, 
the Secretary is authorized--
          [(1) to designate appropriate ``economic development 
        districts'' within the United States with the 
        concurrence of the States in which such districts will 
        be wholly or partially located, if--
                  [(A) the proposed district is of sufficient 
                size or population, and contains sufficient 
                resources, to foster economic development on a 
                scale involving more than a single 
                redevelopment area;
                  [(B) the proposed district contains at least 
                one redevelopment area;
                  [(C) the proposed district contains one or 
                more redevelopment areas or economic 
                development centers identified in an approved 
                district overall economic development program 
                as having sufficient size and potential to 
                foster the economic growth activities necessary 
                to alleviate the distress of the redevelopment 
                areas within the district; and
                  [(D) the proposed district has a district 
                overall economic development program which 
                includes adequate land use and transportation 
                planning and contains a specific program for 
                district cooperation, self-help, and public 
                investment and is approved by the State or 
                States affected and by the Secretary;
          [(2) to designate as ``economic development 
        centers,'' in accordance with such regulations as he 
        shall prescribe, such areas as he may deem appropriate, 
        if--
                  [(A) the proposed center has been identified 
                and included in an approved district overall 
                economic development program and recommended by 
                the State or States affected for such special 
                designation;
                  [(B) the proposed center is geographically 
                and economically so related to the district 
                that its economic growth may reasonably be 
                expected to contribute significantly to the 
                alleviation of distress in the redevelopment 
                areas of the district; and
                  [(C) the proposed center does not have a 
                population in excess of two hundred and fifty 
                thousand according to the last preceding 
                Federal census.
          [(3) to provide financial assistance in accordance 
        with the criteria of sections 101, 201, and 202 of this 
        Act, except as may be herein otherwise provided, for 
        projects in economic development centers designed under 
        subsection (a)(2) above, if--
                  [(A) the project will further the objectives 
                of the overall economic development program of 
                the district in which it is to be located;
                  [(B) the project will enhance the economic 
                growth potential of the district or result in 
                additional long-term employment opportunities 
                commensurate with the amount of Federal 
                financial assistance requested; and
                  [(C) the amount of Federal financial 
                assistance requested is reasonably related to 
                the size, population, and economic needs of the 
                district;
          [(4) subject to the 20 per centum non-Federal share 
        required for any project by subsection 101(c) of this 
        Act, to increase the amount of grant assistance 
        authorized by section 101 for projects within 
        redevelopment areas (designated under section 401), by 
        an amount not to exceed 10 per centum of the aggregate 
        cost of any such project, in accordance with such 
        regulations as he shall prescribe if--
                  [(A) the redevelopment area is situated 
                within a designated economic development 
                district and is actively participating in the 
                economic development activities of the 
                district; and
                  [(B) the project is consistent with an 
                approved district overall economic development 
                program.
  [(b) In designating economic development districts and 
approving district overall economic development programs under 
subsection (a) of this section, the Secretary is authorized, 
under regulations prescribed by him--
          [(1) to invite the several States to draw up proposed 
        district boundaries and to identify potential economic 
        development centers;
          [(2) to cooperate with the several States--
                  [(A) in sponsoring and assisting district 
                economic planning and development groups, and
                  [(B) in assisting such district groups to 
                formulate district overall economic development 
                programs;
          [(3) to encourage participation by appropriate local 
        governmental authorities in such economic development 
        districts.
  [(c) The Secretary shall by regulation prescribe standards 
for the termination or modification of economic development 
districts and economic development centers designated under the 
authority of this section.
  [(d) As used in this Act, the term ``economic development 
district'' refers to any area within the United States composed 
of cooperating redevelopment areas and, where appropriate, 
designated economic development centers and neighboring 
counties or communities, which has been designated by the 
Secretary as an economic development district.
  [(e) As used in this Act, the term ``economic development 
center'' refers to any area within the United States which has 
been identified as an economic development center in an 
approved district overall economic development program and 
which has been designated by the Secretary as eligible for 
financial assistance under sections 101, 201, and 202 of this 
Act in accordance with the provisions of this section.
  [(f) For the purpose of this Act the term ``local 
government'' means any city, county, town, parish, village, or 
other general-purpose political subdivision of a State.
  [(g) There is hereby authorized to be appropriated not to 
exceed $50,000,000 for the fiscal year ending June 30, 1967, 
and for each fiscal year thereafter through the fiscal year 
ending June 30, 1973, and not to exceed $45,000,000 per fiscal 
year for the fiscalyears ending June 30, 1974, June 30, 1975, 
and June 30, 1976, not to exceed $11,250,000 for the period beginning 
July 1, 1976, and ending September 30, 1976, and not to exceed 
$45,000,000 per fiscal year for the fiscal years ending September 30, 
1977, September 30, 1978, September 30, 1979, September 30, 1980, 
September 30, 1981, for financial assistance extended under the 
provisions of subsection (a)(3) and (A)(4) hereof.
  [(h) In order to allow time for adequate and careful district 
planning, subsection (g) of this section shall not be effective 
until one year from the date of enactment.
  [(i) Each economic development district designated by the 
Secretary under this section shall as soon as practicable after 
the date of enactment of this section or after its designation 
provide that a copy of the district overall economic 
development program be furnished to the appropriate regional 
commission established under title V of this Act, if any part 
of such proposed district is within such a region or to the 
Appalachian Regional Commission established under the 
Appalachian Regional Development Act of 1965, if any part of 
such proposed district is within the Appalachian region.
  [(j) The Secretary is authorized to provide the financial 
assistance which is available to a redevelopment area under 
this Act to those parts of an economic development district 
which are not within a redevelopment area, when such assistance 
will be of a substantial direct benefit to a redevelopment area 
within such district. Such financial assistance shall be 
provided in the same manner and to the same extent as is 
provided in this Act for a redevelopment area, except that 
nothing in this subsection shall be construed to permit such 
parts to receive the increase in the amount of grant assistance 
authorized in paragraph (4) of subsection (a) of this section.

                  [Part C--Indian Economic Development

  [Sec. 404. In order to assure a minimum Federal commitment to 
alleviate economic distress of Indians, in addition to their 
eligibility for assistance with funds authorized under other 
parts of this Act, there are authorized to be appropriated not 
to exceed $25,000,000 per fiscal year for the fiscal years 
ending June 30, 1975, and June 30, 1976, not to exceed 
$6,250,000 for the period beginning July 1, 1976, and ending 
September 30, 1976, and not to exceed $25,000,000 per fiscal 
year for the fiscal years ending September 30, 1977, September 
30, 1978, September 30, 1979, September 30, 1980, September 30, 
1981, for the purpose of providing assistance under this Act to 
Indian tribes. Such sums shall be in addition to all other 
funds made available to Indian tribes under this Act.

               [Part D--Unemployment Rate Determinations

  [Sec. 405. Whenever any provision of this Act requires the 
Secretary of Labor, or the Secetary, to make any determination 
or other finding relating to the unemployment rate of any area, 
information regarding such unemployment rate may be furnished 
either by the Federal Government or by a State. Unemployment 
rates furnished by a State shall be accepted by the Secretary 
unless he determines that such rates are inaccurate. The 
Secretary shall provide technical assistance to State and local 
governments in the calculation of unemployment rates to insure 
their validity and standardization.

                       [TITLE VI--ADMINISTRATION

  [Sec. 601. (a) The Secretary shall administer this Act and, 
with the assistance of an Assistant Secretary of Commerce, in 
addition to those already provided for, shall supervise and 
direct the Administrator created herein, and coordinate the 
Federal cochairmen appointed heretofore or subsequent to this 
Act. The Assistant Secretary created by this section shall be 
appointed by the President by and with the advice and consent 
of the Senate. Such Assistant Secretary shall perform such 
functions as the Secretary may prescribe. There shall be 
appointed by the President, by and with the advice and consent 
of the Senate, an Administrator for Economic Development who 
shall be compensated at the rate provided for level V of the 
Federal Executive Salary Schedule who shall perform such duties 
as are assigned by the Secretary.
  [(b) Paragraph (12) of subsection (d) of section 303 of the 
Federal Executive Salary Act of 1964 is amended by striking out 
``(4)'' and inserting in lieu thereof ``(5)''.
  [(c) Subsection (e) of section 303 of the Federal Executive 
Salary Act of 1964 is amended by adding at the end thereof the 
following new paragraph:
  [``(100) Administrator for Economic Development.''

          [advisory committee on regional economic development

  [Sec. 602. The Secretary shall appoint a National Public 
Advisory Committee on Regional Economic Development which shall 
consist of twenty-five members and shall be composed of 
representatives of labor, management, agriculture, State and 
local governments, and the public in general. From the members 
appointed to such Committee the Secretary shall designate a 
Chairman. Such Committee, or any duly established subcommittee 
thereof, shall from time to time make recommendations to the 
Secretary relative to the carrying out of his duties under this 
Act. Such Committee shall hold not less than two meetings 
during each calendar year.

             [consultation with other persons and agencies

  [Sec. 603. (a) The Secretary is authorized from time to time 
to call together and confer with any persons, including 
representatives of labor, management, agriculture, and 
government, who can assist in meeting the problems of area and 
regional unemployment or underemployment.
  [(b) The Secretary may make provisions for such consultation 
with interested departments and agencies as he may deem 
appropriate in the performance of the functions vested in him 
by this Act.

              [administration, operation, and maintenance

  [Sec. 604. No Federal assistance shall be approved under this 
Act unless the Secretary is satisifed that the project for 
which Federal assistance is granted will be properly and 
efficiently administered, operated, and maintained.

                       [TITLE VII--MISCELLANEOUS

                          [powers of secretary

  [Sec. 701. In performing his duties under this Act, the 
Secretary is authorized to--
          [(1) adopt, alter, and use a seal, which shall be 
        judicially noticed;
          [(2) hold such hearings, sit and act at such times 
        and places, and take such testimony, as he may deem 
        advisable;
          [(3) request directly from any executive department, 
        bureau, agency, board, commission, office, independent 
        establishment, or instrumentality information, 
        suggestions, estimates, and statistics needed to carry 
        out the purposes of this Act; and each department, 
        bureau, agency, board, commission, office, 
        establishment or instrumentality is authorized to 
        furnish such information, suggestions, estimates, and 
        statistics directly to the Secretary;
          [(4) under regulations prescribed by him, assign or 
        sell at public or private sale, or otherwise dispose of 
        for cash or credit, in his discretion and upon such 
        terms and conditions and for such consideration as he 
        shall determine to be reasonable, any evidence of debt, 
        contract, claim, personal property, or security 
        assigned to or held by him in connection with loans 
        made or evidences of indebtedness purchased under this 
        Act, and collect or compromise all obligations assigned 
        to or held by him in connection with such loans or 
        evidences of indebtedness until such time as such 
        obligations may be referred to the Attorney General for 
        suit or collection;
          [(5) further extend the maturity of or renew any loan 
        made or evidence of indebtedness purchased under this 
        Act, beyond the periods stated in such loan or evidence 
        of indebtedness or in this Act, for additional periods 
        not to exceed ten years, if such extension or renewal 
        will aid in the orderly liquidation of such loan or 
        evidence of indebtedness;
          [(6) deal with, complete, renovate, improve, 
        modernize, insure, rent, or sell for cash or credit, 
        upon such terms and conditions and for such 
        consideration as he shall determine to be reasonable, 
        any real or personal property conveyed to, or otherwise 
        acquired by him in connection with loans made or 
        evidences of indebtedness purchased under this Act;
          [(7) pursue to final collection, by way of compromise 
        or other administrative action, prior to reference to 
        the Attorney General, all claims against third parties 
        assigned to him in connection with loans made or 
        evidences of indebtedness purchased under this Act. 
        This shall include authority to obtain deficiency 
        judgments or otherwise in the case of mortgages 
        assigned to the Secretary. Section 3709 of the Revised 
        Statutes, as amended (41 U.S.C. 5), shall not apply to 
        any contract of harzard insurance or to any purchase or 
        contract for services or supplies on account of 
        property obtained by the Secretary as a result of loans 
        made or evidences of indebtedness purchased under this 
        Act if the premium therefor or the amount thereof does 
        not exceed $1,000. The power to convey and to execute, 
        in the name of the Secretary, deeds of conveyance, 
        deeds of release, assignments and satisfactions of 
        mortgages, and any other written instrument relating to 
        real or personal property or any interest therein 
        acquired by the Secretary pursuant to the provisions of 
        this Act may be exercised by the Secretary or by any 
        officer or agent appointed by him for that purpose 
        without the execution of any express delegation of 
        power or power of attorney;
          [(8) acquire, in any lawful manner, any property 
        (real, personal, or mixed, tangible or intangible), 
        whenever deemed necessary or appropriate to the conduct 
        of the activities authorized in sections 201, 202, 301, 
        403, and 503 of this Act;
          [(9) in addition to any powers, functions, 
        privileges, and immunities otherwise vested in him, 
        take any and all actions, including the procurement of 
        the services of attorneys by contract, determined by 
        him to be necessary or desirable in making, purchasing, 
        servicing, compromising, modifying, liquidating, or 
        otherwise administratively dealing with or realizing on 
        loans made or evidences of indebtedness purchased under 
        this Act;
          [(10) employ experts and consultants or organizations 
        therefor as authorized by section 15 of the 
        Administrative Expenses Act of 1946 (5 U.S.C. 55a), 
        compensate individuals so employed at rates not in 
        excess of $100 per diem, including travel time, and 
        allow them, while away from their homes or regular 
        places of business, travel expenses (including per diem 
        in lieu of subsistence) as authorized by section 5 of 
        such Act (5 U.S.C. 73b-2) for persons in the Government 
        service employed intermittently, while so employed: 
        Provided, however, That contracts for such employment 
        may be renewed annually;
          [(11) sue and be sued in any court of record of a 
        State having general jurisdiction or in any United 
        States district court, and jurisdiction is conferred 
        upon such district court to determine such 
        controversies without regard to the amount in 
        controversy; but no attachment, injunction, 
        garnishment, or other similar process, mesne or final, 
        shall be issued against the Secretary or his property. 
        Nothing herein shall be construed to except the 
        activities under this Act from the application of 
        sections 507(b) and 2679 of title 28, United States 
        Code, and of section 367 of the Revised Statutes (5 
        U.S.C. 316); and
          [(12) establish such rules, regulations and 
        procedures as he may deem appropriate in carrying out 
        the provisions of this Act.

                   [prevention of unfair competition

  [Sec. 702. No financial assistance under this Act shall be 
extended to any project when the result would be to increase 
the production of goods, materials, or commodities, or the 
availability ofservices or facilities, when there is not 
sufficient demand for such goods, materials, commodities, services, or 
facilities, to employ the efficient capacity of existing competitive 
commercial or industrial enterprises.

                          [savings provisions

  [Sec. 703. (a) No suit, action, or other proceedings lawfully 
commenced by or against the Administrator or any other officer 
of the Area Redevelopment Administration in his official 
capacity or in relation to the discharge of his official duties 
under the Area Redevelopment Act, shall abate by reason of the 
taking effect of the provisions of this Act, but the court may, 
on motion or supplemental petition filed at any time within 
twelve months after such taking effect, showing a necessity for 
the survival of such suit, action, or other proceeding to 
obtain a settlement of the questions involved, allow the same 
to be maintained by or agianst the Secretary or the 
Administrator or such other officer of the Department of 
Commerce as may be appropriate.
  [(b) Except as may be otherwise expressly provided in this 
Act, all powers and authorities conferred by this Act shall be 
cumulative and additional to and not in derogation of any 
powers and authorities otherwise existing. All rules, 
regulations, orders, authorizations, delegations, or other 
actions duly issued, made, or taken by or pursuant to 
applicable law, prior to the effective date of this Act, by any 
agency, officer, or office pertaining to any functions, powers, 
and duties under the Area Redevelopment Act shall continue in 
full force and effect after the effective date of this Act 
until modified or rescinded by the Secretary or such other 
officer of the Department of Commerce as, in accordance with 
applicable law, may be appropriate.

 [transfer of functions, effective date, and limitations on assistance

  [Sec. 704. (a) The functions, powers, duties, and authorities 
and the assets, funds, contracts, loans, liabilities, 
commitments, authorizations, allocations, and records which are 
vested in or authorized to be transferred to the Secretary of 
the Treasury under section 29(b) of the Area Redevelopment Act, 
and all functions, powers, duties, and authorities under 
section 29(c) of the Area Redevelopment Act are hereby vested 
in the Secretary.
  [(b) The President may designate a person to act as 
Administrator under this Act until the office is filled as 
provided in this Act or until the expiration of the first 
period of sixty days following the effective date of this Act, 
which shall first occur. While so acting such person shall 
receive compensation at the rate provided by this Act for such 
office.
  [(c) The provisions of this Act shall take effect upon 
enactment unless herein explicity otherwise provided.
  [(d) Notwithstanding any requirements of this Act relating to 
the eligibility of areas, projects for which applications are 
pending before the Area Redevelopment Administration on the 
effective date of this Act shall for a period of one year 
thereafter be eligible for consideration by the Secretary for 
such assistance under the provisions of this Act as he may 
determine to be appropriate.
  [(e) No financial assistance authorized under this Act shall 
be used to finance the cost of facilities for the generation, 
transmission, or distribution of electrical energy, or to 
finance the cost of facilities for the production or 
transmission of gas (natural, manufactured, or mixed), except 
(1) for projects specifically authorized by Congress, and (2) 
for local projects for industrial parks and industrial or 
commercial areas in communities where the electrical energy or 
gas supply is, or is threatened to be interrupted or curtailed 
resulting in a loss of jobs, or where the purpose is to save 
jobs, or create new jobs, on condition that (A) the Secretary 
finds that project financing is not available from private 
lenders or other Federal agencies on terms which, in the 
opinion of the Secretary, will permit accomplishment of the 
project, and (B) the State or Federal regulatory body 
regulating such service determines that the facility to be 
financed will not compete with an existing public utility 
rendering such a service to the public at rates or charges 
subject to regulation by such State or Federal regulatory body, 
or if there is a determination of competition, the State or 
Federal regulatory body must make a determination that in the 
area to be served by the facility for which the financial 
assistance is to be extended there is a need for an increase in 
such service (taking into consideration reasonably forseeable 
future needs) which the existing public utility is not able to 
meet through its existing facilities or through an expansion 
which it agrees to undertake. Not more than $7,000,000 
approximated to carry out titles I and II of this Act may be 
expended annually for such projects.

                             [separability

  [Sec. 705. Notwithstanding any other evidence of the intent 
of Congress, it is hereby declared to be the intent of Congress 
that if any provision of this Act or the application thereof to 
any persons or circumstances shall be adjudged by any court of 
competent jurisdiction to be invalid such judgment shall not 
affect, impair, or invalidate the remainder of this Act or its 
application to other persons and circumstances, but shall be 
confined in its operation to the provision of this Act or the 
application thereof to the persons and circumstances directly 
involved in the controversy in which such judgment shall have 
been rendered.

                          [application of act

  [Sec. 706. As used in this Act, the terms ``State'', 
``States'', and ``United States'' include the several States, 
the District of Columbia, the Commonwealth of Puerto Rico, the 
Virgin Islands, Guam, and American Samoa.

                             [annual report

  [Sec. 707. The Secretary shall make a comprehensive and 
detailed annual report to the Congress of his operations under 
this Act for each fiscal year beginning with the fiscal year 
ending June 30, 1966. Such report shall be printed and shall be 
transmitted to the Congress not later than April 1 of the year 
following the fiscal year with respect to which such report is 
made.

                        [use of other facilities

  [Sec. 708. (a) The Secretary is authorized to delegate to the 
heads of other departments and agencies of the Federal 
Government any of the Secretary's functions, powers, and duties 
of this Act as he may deem appropriate, and to authorize the 
redelegation of such functions, powers, and duties by the heads 
of such departments and agencies.
  [(b) Departments and agencies of the Federal Government shall 
exercise their powers, duties, and functions in such manner as 
will assist in carrying out the objectives of this Act.
  [(c) Funds authorized to be appropriated under this Act may 
be transferred between departments and agencies of the 
Government, if such funds are used for the purposes for which 
they are specifically authorized and appropriated.

                             [appropriation

  [Sec. 709. There are hereby authorized to be appropriated 
such sums as may be necessary to carry out those provisions of 
the Act for which specific authority for appropriations is not 
otherwise provided in this Act, except that there are hereby 
authorized to be appropriated to carry out those provisions of 
the Act for which specific authority for appropriations is not 
otherwise provided in this Act not to exceed $25,000,000 for 
the fiscal year ending September 30, 1982. Appropriations 
authorized under this Act shall remain available until expended 
unless otherwise provided by appropriations Acts.

                               [penalties

  [Sec. 710. (a) Whoever makes any statement knowing it to be 
false, or whoever will fully overvalue any security, for the 
purpose of obtaining for himself or for any applicant any 
financial assistance under section 101, 201, or 403 or any 
extension thereof by renewal, deferment or action, or 
otherwise, or the acceptance, release, or substitution of 
security therefor, or for the purpose of influencing in any way 
the action of the Secretary or for the purpose of obtaining 
money, property, or anything of value, under this Act, shall be 
punished by a fine of not more than $10,000 or by imprisonment 
for not more than five years, or both.
  [(b) Whoever, being connected in any capacity with the 
Secretary, in the administration of this Act (1) embezzles, 
abstracts, purloins, or willfully misapplies any moneys, funds, 
securities, or other things of value, whether belonging to him 
or pledged or otherwise entrusted to him, or (2) with intent to 
defraud the Secretary or any other body politic or corporate, 
or any individual, or to deceive any officer, auditor, or 
examiner, makes any false entry in any book, report or 
statement of or to the Secretary, or without being duly 
authorized draws any orders of issues, puts forth, or assigns 
any note, debenture, bond, or other obligation, or draft, bill 
of exchange, mortgage, judgment, or decree thereof, or (3) with 
intent to defraud participates or shares in or receives 
directly or indirectly any money, profit, property, or benefit 
through any transaction, loan, grant, commission, contract, or 
any other act of the Secretary, or (4) gives any unauthorized 
information concerning any future action or plan of the 
Secretary which might affect the value of securities, or having 
such knowledge invests or speculates, directly or indirectly, 
in the securities or property of any company or corporation 
receiving loans, grants, or other assistance from the 
Secretary, shall be punished by a fine of not more than $10,000 
or by imprisonment for not more than five years, or both.

         [employment of expediters and administrative employees

  [Sec. 711. No financial assistance shall be extended by the 
Secretary under section 101, 201, 202, or 403 to any business 
enterprise unless the owners, partners, or officers of such 
business enterprise (1) certify to the Secretary the names of 
any attorneys, agents, and other persons engaged by or on 
behalf of such business enterprise for the purpose of 
expediting applications made to the Secretary for assistance of 
any sort, under this Act, and the fees paid or to be paid to 
any such person; and (2) execute an agreement binding such 
business enterprise, for a period of two years after such 
assistance is rendered by the Secretary to such business 
enterprise, to refrain from employing tendering any office or 
employment to, or retaining for professional services, any 
person who, on the date such assistance or any part thereof was 
rendered, or within one year prior thereto, shall have served 
as an officer, attorney, agent, or employee, occupying a 
position or engaging in activities which the Secretary shall 
have determined involve discretion with respect to the granting 
of assistance under this Act.

              [prevailing rate of wage and forty-hour week

  [Sec. 712. All laborers and mechanics employed by contractors 
or subcontractors on projects assisted by the Secretary under 
this Act shall be paid wages at rates not less than those 
prevailing on smiliar construction in the locality as 
determined by the Secretary of Labor in accordance with the 
Davis-Bacon Act, as amended (40 U.S.C. 276a-276a-5). The 
Secretary shall not extend any financial assistance under 
sections 101, 201, 202, 403, 903, and 1003, for such project 
without first obtaining adequate assurance that these labor 
standards will be maintained upon the construction work. The 
Secretary of Labor shall have, with respect to the labor 
standards specified in this provision, the authority and 
functions sent forth in Reorganization Plan Numbered 14 of 1950 
(15 F.R. 3176; 64 Stat. 1267; 5 U.S.C. 133z-15), and section 2 
of the Act of June 13, 1934, as amended (40 U.S.C. 276c).

                        [record of applications

  [Sec. 713. The Secretary shall maintain as a permanent part 
of the records of the Department of Commerce a list of 
applications approved for financial assistance under section 
101, 201, 202, or 403, which shall be kept available for public 
inspection during the regualr business hours of the Department 
of Commerce. The following information shall be posted in such 
list as soon as each application is approved; (1) the name of 
the applicant and, in the case of corporate applications, the 
names of the officers and directors thereof, (2) the amount and 
duration of the loan or grant for which application is made, 
(3) the purposes for which the proceeds of theloan or grant are 
to be used, and (4) a general description of the security offered in 
the case of a loan.

                           [records and audit

  [Sec. 714. (a) Each recipient of assistance under this Act 
shall keep such records as the Secretary shall prescribe, 
including records which fully disclose the amount and the 
disposition by such recipient of the proceeds of such 
assistance the total cost of the project or undertaking in 
connection with which such assistance is given or used, and the 
amount and nature of that portion of the cost of the project or 
undertaking supplied by other sources, and such other records 
as will facilitate an effective audit.
  [(b) The Secretary and the Comptroller General of the United 
States, or any of their duly authorized representatives, shall 
have access for the purpose of audit and examination to any 
books, documents, papers, and records of the recipient that are 
pertinent to assistance received under this Act.

                         [conforming amendment

  [Sec. 715. All benefits heretofore specially made available 
(and not subsequently revoked) under other Federal programs to 
persons or to public or private organizations, corporations, or 
entities in areas designated by the Secretry as ``redevelopment 
areas'' under section 5 of the Area Redevelopment Act, are 
hereby also extended, insofar as practicable, to such areas as 
may be designated as ``redevelopment areas'' or ``economic 
development centers'' under the authority of section 401 or 403 
of this Act: Provided, however, That this section shall not be 
construed as limiting such administrative discretion as may 
have been conferred under any other law.
  [Sec. 716. All financial and technical assistance authorized 
under this Act shall be in addition to any Federal assistance 
previously authorized, and no provision hereof shall be 
construed as authorizing or permitting any reduction or 
diminution in the proportional amount of Federal assistance to 
which any State or other entity eligible under this Act would 
otherwise be entitled under the provisions of any other Act.

           [TITLE VIII--ECONOMIC RECOVERY FOR DISASTER AREAS

                           [purpose of title

  [Sec. 801. (a) It is the purpose of this title to provide 
assistance for the economic recovery, after the period of 
emergency aid and replacement of essential facilities and 
services, of any major disaster area which has suffered a 
dislocation of its economy of sufficient severity to require 
(1) assistance in planning for development to replace that lost 
in the major disaster; (2) continued coordination of assistance 
available under Federal-aid programs; and (3) continued 
assistance toward the restoration of the employment base.
  [(b) As used in this title, the term ``major disaster'' means 
a major disaster declared by the President in accordance with 
the Disaster Relief and Emergency Assistance Act.

                      [disaster recovery planning

  [Sec. 802. (a)(1) In the case of any area affected by a major 
disaster the Governor may request the President for assistance 
under this title. The Governor, within thirty days after 
authorization of such assistance by the President, shall 
designate a Recovery Planning Council for such area or for each 
part thereof.
  [(2) Such Recovery Planning Council shall be composed of not 
less than five members, a majority of whom shall be local 
elected officials of political subdivisions within the affected 
areas, at least one representative of the State, and a 
representative of the Federal Government appointed by the 
President in accordance with paragraph (3) of this subsection. 
During the major disaster, the Federal coordinating officer 
shall also serve on the Recovery Planning Council.
  [(3) The Federal representative on such Recovery Planning 
Council may be the Chairman of the Federal Regional Council for 
the affected area, or a member of the Federal Regional Council 
designated by the Chairman of such Regional Council. The 
Federal representative on such Recovery Planning Council may be 
the Federal Cochairman of the Regional Commission established 
pursuant to title V of this Act, or the Appalachian Regional 
Development Act of 1965, or his designee, where all of the area 
affected by a major disaster is within the boundaries of such 
Commission.
  [(4) The Governor may designate an existing 
multijurisdictional organization as the Recovery Planning 
Council where such organization complies with paragraph (2) of 
this subsection with the addition of State and Federal 
represenatatives except that if all or part of an area affected 
by a major disaster is within the jurisdiction of an existing 
multijurisdictional organization established under title VI of 
this Act or title III of the Appalachian Regional Development 
Act of 1965, such organization, with the addition of State and 
Federal representatives in accordance with paragraph (2) of 
this subsection, shall be designated by the Governor as the 
Recovery Planning Council. In any case in which such title III 
or IV organizations is designated as the Recovery Planning 
Council under this paragraph, some local elected officials of 
political subdivisions within the affected areas must be 
appointed to serve on such Recovery Planning Council. Where 
possible, the organization designated as the Recovery Planning 
Council shall be or shall be subsequently designated as the 
appropriate agency required by section 204 of the Demonstration 
Cities and Metropolitan Development Act of 1966 (42 U.S.C. 
3334) and by the Intergovernmental Cooperation Act of 1968 
(Public Law 90-577; 82 Stat. 1098).
  [(5) The Recovery Planning Council shall include private 
citizens as members to the extent feasible, and shall provide 
for and encourage public participation in its deliberations and 
decisions.
  [(b) The Recovery Planning Council (1) shall review existing 
plans for the affected area; and (2) may recommend to the 
Governor and responsible local governments such revisions as it 
determines necessary for the economic recovery of the area, 
including the development of new plans and the preparation of a 
recovery investment plan for the 5-year period following the 
declaration of the major disaster. The Recovery Planning 
Council shall accept as one element of the recovery investment 
plans determinations made under section 406(c) of the Disaster 
Relief and Emergency Assistance Act.
  [(c)(1) A recovery investment plan prepared by a Recovery 
Planning Council may recommend the revision, deletion, 
reprogramming, or additional approval of Federal-aid projects 
and programs within the area--
          [(A) for which application has been made but approval 
        not yet granted;
          [(B) for which funds have been obligated or approval 
        granted but construction not yet begun;
          [(C) for which funds have been or are scheduled to be 
        apportioned within the five years after the declaration 
        of the disaster;
          [(D) which may otherwise be available to the area 
        under any State schedule or revised State schedule of 
        priorities; or
          [(E) which may reasonably be anticipated as becoming 
        available under existing programs.
  [(2) Upon the recommendation of the Recovery Planning Council 
and the request for the Governor, any funds for projects or 
programs identified pursuant to paragraph (1) of this 
subsection may, to any extent consistent with appropriation 
Acts, be placed in reserve by the responsible Federal agency 
for use in accordance with such recommendations. Upon the 
request of the Governor and with the concurrence of affected 
local governments, such funds may be transferred to the 
Recovery Planning Council to be expended in the implementation 
of the recovery investment plan, except that no such transfer 
may be made unless such expenditure is for a project or program 
for which such funds originally were made available by an 
appropriation Act.

       [public works and development facilities grants and loans

  [Sec. 803. (a) The President is authorized to provide funds 
to any Recovery Planning Council for the implementation of a 
recovery investment plan by public bodies. Such funds may be 
used--
          [(1) to make loans for the acquisition or development 
        of land and improvements for public works, public 
        service, or development facility usage, including the 
        acquisition or development of parks or open spaces, and 
        the acquisition, construction, rehabilitation, 
        alteration, expansion, or improvement of such 
        facilities, including related machinery and equipment, 
        and
          [(2) to make supplementary grants to increase the 
        Federal share for projects for which funds are reserved 
        pursuant to subsection (c)(2) of section 802 of this 
        Act, or other Federal-aid projects in the affected 
        area.
  [(b) Grants and loans under this section may be made to any 
State, local government, or private or public nonprofit 
organization representing any area or part thereof affected by 
a major disaster.
  [(c) No supplementary grant shall increase the Federal share 
of the cost of any project to greater than 90 per centum, 
except in the case of a grant for the benefit of Indians or 
Alaska Natives, or in the case of any State or local government 
which the Presidentdetermines has exhausted its effective 
taxing and borrowing capacity.
  [(d) Loans under this section shall bear interest at a rate 
determined by the Secretary of the Treasury taking into 
consideration the current average market yield on outstanding 
marketable obligations of the United States with remaining 
periods to maturity comparable to the average maturities of 
such loans, adjusted to the nearest one-eighth of 1 per centum 
per annum.
  [(e) Financial assistance under this title shall not be 
extended to assist establishments relocating from one area to 
another or to assist subcontractors whose purpose is to divest, 
or whose economic success is dependent upon divesting, other 
contractors or subcontractors of contracts therefore 
customarily performed by them. Such limitations shall not be 
construed to prohibit assistance for the expansion of an 
existing business entity through the establishment of a new 
branch, affiliate, or subsidiary of such entity if the 
Secretary of Commerce finds that the establishment of such 
branch, affiliate, or subsidiary will not result in an increase 
in unemployment of the area of original location or in any 
other area where such entity conducts business operations, 
unless the Secretary has reason to believe that such branch, 
affiliate, or subsidiary is being established with the 
intention of closing down the operations of the existing 
business entity in the area of its original location or in any 
other area where it conducts such operations.

                            [loan guarantees

  [Sec. 804. The President is authorized to provide funds to 
Recovery Planning Councils to guarantee loans made to private 
borrowers by private lending institutions (1) to aid in 
financing any project within any area affected by a major 
disaster for the purchase or development of land and facilities 
(including machinery and equipment) for industrial or 
commercial usage including the construction of new buildings, 
and rehabilitation of abandoned or unoccupied buildings, and 
the alteration, conversion or enlargement of existing buildngs; 
and (2) for working capital in connection with projects in 
areas assisted under paragraph (1), upon application of such 
institution and upon such terms and conditions as the President 
may prescribe. No such gurantee shall at any time exceed 90 per 
centum of the amount of the outstanding unpaid balance of such 
loan.

                         [technical assistance

  [Sec. 805. (a) In carrying out the purposes of this title the 
President is authorized to provide technical assistance which 
would be useful in facilitating economic recovery in areas 
affected by major disasters. Such assistance shall include 
project planning and feasibility studies, management and 
operational assistance, and studies evaluating the needs of, 
and developing potentialities for, economic recovery of such 
areas. Such assistance may be provided by the President 
directly, through the payment of funds authorized for this 
title to other departments or agencies of the Federal 
Government, through the employment of private individuals, 
partnerships, firms, corporations or suitable institutions, 
under contracts entered into for such purposes, or through 
grants-in-aid to appropriate public or private non-profit 
State, area, district, or local organization.
  [(b) The President is authorized to make grants to defray not 
to exceed 75 per centum of the administrative expenses of 
Recovery Planning Councils designated pursuant to section 802 
of this Act. In determining the amount of the non-Federal share 
of such costs or expenses, the President shall give due 
consideration to all contributions both in cash and in kind, 
fairly evaluated including but not limited to space, equipment, 
and services. Where practicable, grants-in-aid authorized under 
this subsection shall be used in conjunction with other 
available planning grants, to assure adequate and effective 
planning and economical use of funds.

   [TITLE IX--SPECIAL ECONOMIC DEVELOPMENT AND ADJUSTMENT ASSISTANCE

                                [purpose

  [Sec. 901. It is the purpose of this title to provide special 
economic development and adjustment assistance programs to help 
State and local areas meet special needs arising from actual or 
threatened severe unemployment arising from economic 
dislocation, including unemployment arising from actions of the 
Federal Government and from compliance with environmental 
requirements which remove economic activities from a locality, 
and economic adjustment problems resulting from severe changes 
in economic conditions (including long-term economic 
deterioration), and to encourage cooperative intergovernmental 
action to prevent or solve economic adjustment problems. 
Nothing in this title is intended to replace the efforts of the 
economic adjustment program of the Department of Defense.

                              [definition

  [Sec. 902. As used in this title, the term ``eligible 
recipient'' means a redevelopment area or economic development 
district established under title IV of this Act, an Indian 
tribe, a State, a city or other political subdivision of a 
State, or consortium of such political subdivisions.

                          [grants by secretary

  [Sec. 903. (a)(1) The Secretary is authorized to make grants 
directly to any eligible recipient in an area (A) which the 
Secretary has determined has experienced, or may reasonably be 
foreseen to be about to experience, a special need to meet an 
expected rise in unemployment, or other economic adjustment 
problems (including those caused by any action or decision of 
the Federal Government), or (B) which the Secretary determines 
has demonstrated long-term economic deterioration, to carry out 
or develop a plan which meets the requirements of subsection 
(b) of this section and which is approved by the Secretary, to 
use such grants for any of the following: public facilities, 
public services, business development, planning, unemployment 
compensation (in accordance with subsection (d) of this 
section), rent supplements, mortgage payment assistance, 
research, technical assistance, training, relocation of 
individuals andbusinesses, and other assistance which 
demonstrably furthers the economic adjustment objectives of this title.
  [(2)(A) Such grants may be used in direct expenditures by the 
eligible recipient or through redistribution by it to public 
and private entities in grants, loans, loan guarantees, 
payments to reduce interest on loan guarantees, or other 
appropriate assistance, but no grant shall be made by an 
eligible recipient to a private profitmaking entity.
  [(B) Grants for unemployment compensation shall be made to 
the State. Grants for any other purpose shall be made to any 
appropriate eligible recipient capable of carrying out such 
purpose.
  [(b) No plan shall be approved by the Secretary under this 
section unless such plan shall--
          [(1) identify each economic development and 
        adjustment need of the area for which assistance is 
        sought under this title;
          [(2) describe each activity planned to meet each such 
        need;
          [(3) explain the details of the method of carrying 
        out each such planned activity;
          [(4) contain assurances satisfactory to the Secretary 
        that the proceeds from the repayment of loans made by 
        the eligible recipient with funds granted under this 
        title will be used for economic adjustment; and
          [(5) be in such form and contain such additional 
        information as the Secretary shall prescribe.
  [(c) The Secretary to the extent practicable shall coordinate 
his activities in requiring plans and making grants and loans 
under this title with regional commissions, States, economic 
development districts and other appropriate planning and 
development organizations.
  [(d) In each case in which the Secretary determines a need 
for assistance under subsection (a) of this section due to an 
increase in unemployment and makes a grant under this section, 
the Secretary may transfer funds available for such grant to 
the Secretary of Labor and the Secretary of Labor is authorized 
to provide to any individual unemployed as a result of the 
dislocation for which such grant is made, such assistance as he 
deems appropriate while the individual is unemployed. Such 
assistance as the Secretary of Labor may provide shall be 
available to an individual not otherwise disqualified under 
State law for unemployment compensaton benefits, as long as the 
individual's unemployment caused by the dislocation continues 
or until the individual is reemployed in a suitable position, 
but no longer than one year after the unemployment commences. 
Such assistance for a week of employment shall not exceed the 
maximum weekly amount authorized under the unemployment 
compensation law of the State in which the dislocation 
occurred, and the amount of assistance under this subsection 
shall be reduced by any amount of unemployment compensation or 
of private income protection insurance compensation available 
to such individual for such week of employment. The Secretary 
of Labor is directed to provide such assistance through 
agreements with States which, in his judgment, have an adequate 
system for administering such assistance through existing State 
agencies.

                        [reports and evaluation

  [Sec. 904. (a) Each eligible recipient which receives 
assistance under this title shall annually during the period 
such assistance continues make a full and complete report to 
the Secretary, in such manner as the Secretary shall prescribe, 
and such report shall contain an evaluation of the 
effectiveness of the economic assistance provided under this 
title in meeting the need it was designed to alleviate and the 
purposes of this title.
  [(b) The Secretary shall include in the annual report 
pursuant to section 707 of this Act a consolidated report with 
his recommendations, if any, on the assistance authorized under 
this title, in a form which he deems appropriate.

                    [authorization of appropriations

  [Sec. 905. There is authorized to be appropriated to carry 
out this title not to exceed $75,000,000 for the fiscal year 
ending June 30, 1975, and $100,000,000 for the fiscal year 
ending June 30, 1976, not to exceed $25,000,000 for the 
transition quarter ending September 30, 1976, and not to exceed 
$100,000,000 per fiscal year for the fiscal years ending 
September 30, 1977, September 30, 1978, September 30, 1979, 
September 30, 1980, and September 30, 1981, and not to exceed 
$33,000,000 for the fiscal year ending September 30, 1982.

                  [TITLE X--JOB OPPORTUNITIES PROGRAM

                         [statement of purpose

  [Sec. 1001. It is the purpose of this title to provide 
emergency financial assistance to stimulate, maintain or expand 
job creating activities in areas, both urban and rural, which 
are suffering from unusually high levels of unemployment.

                              [definitions

  [Sec. 1002. For the purpose of this title the term ``eligible 
area'' means any area, which the Secretary of Labor designates 
as an area which has a rate of unemployment equal to or in 
excess of 7 per centum for the most recent calendar quarter or 
any area designated pursuant to section 204(c) of the 
Comprehensive Employment and Training Act of 1973 which has 
unemployment equal to or in excess of 7 per centum with special 
consideration given to areas with unemployment rates above the 
national average.

                          [program authorized

  [Sec. 1003. (a) To carry out the purposes of this title, the 
Secretary of Commerce, in accordance with the provisions of 
this title, is authorized from funds appropriated and made 
available under section 1007 of this title to provide financial 
assistance to programs and projects identified through the 
review process described in section 1004 to expand or 
accelerate the job creating impact of such programs or projects 
for unemployed persons in eligible areas. Programs and projects 
for which funds are made available under this title shall not 
be approved until the officials of the appropriateunits of 
general government in the affected areas have an adequate opportunity 
to comment on the specific proposal.
  [(b) Whenever funds are made available by the Secretary of 
Commerce under this title for any progam or project, the head 
of the department, agency, or instrumentality of the Federal 
Government administering the law authorizing such assistance 
shall, except as otherwise provided in this subsection, 
administer the law authorizing such assistance in accordance 
with all applicable provisions of that law, except provisions 
relating to--
          [(1) requiring allocation of funds among the States,
          [(2) limits upon the total amount of such grants for 
        any period, and
          [(3) the Federal contribution to any State or local 
        government, whenever the President or head of such 
        department, agency, or instrumentality of the Federal 
        Government determines that any non-Federal contribution 
        cannot reasonably be obtained by the State or local 
        government concerned.
  [(c) Where necessary to effectively carry out the purposes of 
this title, the Secretary of Commerce is authorized to assist 
eligible areas in making applications for grants under this 
title.
  [(d) Notwithstanding any other provisions of this title, 
funds allocated by the Secretary of Commerce shall be available 
only for a program or project which the Secretary indentifies 
and selects pursuant to this subsection, and which can be 
initiated or implemented promptly and substantially completed 
within twelve months after allocation is made. In identifying 
and selecting programs and projects pursuant to this 
subsection, the Secretary shall (1) give priority to programs 
and projects which are most effective in creating and 
maintaining productive employment, including permanent and 
skilled employment measured as the amount of such direct and 
indirect employment generated or supported by the additional 
expenditures of Federal funds under this title, and (2) 
consider the appropriations of the proposed activity to the 
number and needs of unemployed persons in the eligible area.
  [(e)(1) The Secretary, if the national unemployment rate is 
equal to or exceeds 7 per centum for the most recent calendar 
quarter, shall expedite and give priority to grant applications 
submitted for such areas having unemployment in excess of the 
national average rate of unemployment for the most recent 
calendar quarter. Seventy per centum of the funds appropriated 
pursuant to this title shall be available only for grants in 
areas as defined in the first sentence of this subsection.
  [(2) Not more than 15 per centum of all amounts appropriated 
to carry out this title shall be available under this title for 
projects or programs within any one State, except that in the 
case of Guam, Virgin Islands, and American Samoa, not less than 
one-half of 1 per centum in the aggregate shall be available 
for such projects or programs.

                            [program review

  [Sec. 1004. (a) Within forty-five days after any funds are 
appropriated to the Secretary to carry out the purposes of this 
title, after the date of enactment of the Public Works and 
Economic Development Act Amendments of 1976, each department, 
agency, or instrumentality of the Federal Government, each 
regional commission established by section 101 of the 
Appalachian Regional Development Act of 1965 or pursuant to 
section 502 of this Act, shall (1) complete a review of its 
budget, plans, and programs and including State, substate, and 
local development plans filed with such department, agency or 
commission; (2) evaluate the job creation effectiveness of 
programs and projects for which funds are proposed to be 
obligated in the calendar year and additional programs and 
projects (including new or revised programs and projects 
submitted under subsection (b) for which funds could be 
obligated in such year with Federal financial assistance under 
this title); and (3) submit to the Secretary of Commerce 
recommendations for programs and projects which have the 
greatest potential to stimulate the creation of jobs for 
unemployed persons in eligible areas. Within forty-five days of 
the receipt of such recommendations the Secretary of Commerce 
shall review such recommendations, and after consultation with 
such department, agency, instrumentality, regional commission, 
State, or local government make allocations of funds in 
accordance with section 1003(d) of this title.
  [(b) States and political subdivisions in any eligible area 
may, pursuant to subsection (a), submit to the appropriate 
department, agency, or instrumentality of the Federal 
Government (or regional commission) program and project 
applications for Federal financial assistance provided under 
this title.
  [(c) The Secretary, in reviewing programs and projects 
recommended for any eligible area shall give priority to 
programs and projects originally sponsored by States and 
political subdivisions, including, but not limited to, new or 
revised programs and projects submitted in accordance with this 
section.

                         [rules and regulations

  [Sec. 1005. The Secretary of Commerce shall prescribe such 
rules, regulations, and procedures to carry out the provisions 
of this title as will assure that adequate consideration is 
given to the relative needs of applicants for assistance in 
rural eligible areas and the relative needs of applicants for 
assistance in urban eligible areas and to any equitable 
distribution of funds authorized under this title between rural 
and urban eligible applicants unless this would require project 
grants to be made in areas which do not meet the criteria of 
this title.

                    [authorization of appropriations

  [Sec. 1006. (a) There are hereby authorized to be 
appropriated to carry out the provisions of this title 
$81,250,000 for each calendar quarter of a fiscal year during 
which the national average unemployment is equal to or exceeds 
7 per centum on the average. No further appropriations of funds 
is authorized under this section if a determination is made 
that the national average rate of unemployment has receded 
below an average of 7 per centum for the most recent calendar 
quarter as determined by the Secretary of Labor.
  [(b) Funds authorized by subsecton (a) are available for 
grants by the Secretary when the national average unemployment 
is equal to or in excess of an average of 7 per centum for the 
most recentcalendar quarter. If the national average 
unemployment rate recedes below an average of 7 per centum for the most 
recent calendar quarter, the authority of the Secretary to make grants 
or obligate funds under this title is terminated. Grants may not be 
made until the national average unemployment has equalled or exceeded 
an average of 7 per centum for the most recent calendar quarter.
  [(c) Funds authorized to carry out this title shall be in 
addition to, and not in lieu of, any amounts authorized by 
other provisions of law.

                           [termination date

  [Sec. 1007. Notwithstanding any other provision of this 
title, no further obligations of funds appropriated under this 
title shall be made by the Secretary of Commerce after 
September 30, 1981.

                          [construction costs

  [Sec. 1008. No program or project originally approved for 
funds under an existing program shall be determined to be 
ineligible for Federal financial assistance under this title 
solely because of increased construction costs.]

SEC. 2. FINDINGS AND DECLARATION.

  (a) Findings.--Congress finds that--
          (1) the maintenance of the national economy at a high 
        level is vital to the best interests of the United 
        States, but some of our regions, counties, and 
        communities are suffering substantial and persistent 
        unemployment and underemployment that cause hardship to 
        many individuals and their families and waste 
        invaluable human resources;
          (2) to overcome this problem the Federal Government, 
        in cooperation with the States, should help areas and 
        regions of substantial and persistent unemployment and 
        underemployment to take effective steps in planning and 
        financing their public works and economic development, 
        with cooperation among area local governments;
          (3) Federal financial assistance, including grants 
        for public works and development facilities, to 
        communities, industries, enterprises, and individuals 
        in areas needing development should enable such areas 
        to help themselves achieve lasting improvement and 
        enhance domestic prosperity by the establishment of 
        stable and diversified local economies, sustainable 
        development, and improved local conditions, if such 
        assistance is preceded by and consistent with sound, 
        long-range economic planning; and
          (4) under the provisions of this Act, new employment 
        opportunities should be created by developing and 
        expanding new and existing public works and other 
        facilities and resources rather than by merely 
        transferring jobs from one area of the United States to 
        another.
  (b) Declaration.--Congress declares that, in furtherance of 
maintaining the national economy at a high level--
          (1) the assistance authorized by this Act should be 
        made available to both rural and urban areas;
          (2) such assistance should be made available for 
        planning for economic development prior to the actual 
        occurrences of economic distress in order to avoid such 
        condition; and
          (3) such assistance should be used for long-term 
        economic rehabilitation in areas where long-term 
        economic deterioration has occurred or is taking place.

     TITLE I--ECONOMIC DEVELOPMENT PARTNERSHIPS, COOPERATION, AND 
                              COORDINATION

SEC. 101. ESTABLISHMENT OF ECONOMIC DEVELOPMENT PARTNERSHIPS.

  (a) In General.--In providing assistance under this Act, the 
Secretary shall cooperate with States and other entities to 
ensure that, consistent with national objectives, Federal 
programs are compatible with, and further the objectives of, 
State, regional, and local economic development plans and 
comprehensive economic development strategies.
  (b) Technical Assistance.--The Secretary shall provide to 
States, local governmental subdivisions of States, sub-State 
regional organizations (including organizations that cross 
State boundaries), and multi-State regional organizations 
technical assistance that the Secretary determines may be 
necessary or desirable to--
          (1) alleviate economic distress;
          (2) encourage and support public-private partnerships 
        for the formation and improvement of economic 
        development strategies that promote the growth of the 
        national economy;
          (3) stimulate modernization and technological 
        advances in the generation and commercialization of 
        goods and services; and
          (4) enhance the effectiveness of United States firms 
        in the global economy.
  (c) Intergovernmental Review.--The Secretary shall issue 
regulations to ensure that appropriate State and local 
governmental authorities will be given a reasonable opportunity 
to review and comment on proposed economic development projects 
that the Secretary determines may have a significant and direct 
impact on the economy of the area.
  (d) Agreements.--The Secretary may enter into an agreement 
with 2 or more adjoining States, or an organization consisting 
of such States, in support of effective economic development. 
The agreement shall provide for suitable participation by other 
governmental and non-governmental parties that represent 
significant interests in and perspectives on economic 
development in the area.

SEC. 102. COOPERATION OF FEDERAL AGENCIES.

  Each Federal department and agency, in accordance with 
applicable laws and within the limits of available funds, shall 
exercise its powers, duties, and functions, and shall cooperate 
with the Secretary, in a manner that will assist the Secretary 
in carrying out the objectives of this Act.

       TITLE II--GRANTS FOR PUBLIC WORKS AND ECONOMIC DEVELOPMENT

SEC. 201. PUBLIC WORKS GRANTS.

  (a) Direct Grants.--Upon the application of an eligible 
recipient, the Secretary may make direct grants for--
          (1) acquisition or development of land and 
        improvements for public works, public service, or 
        development facility usage; and
          (2) acquisition, design and engineering, 
        construction, rehabilitation, alteration, expansion, or 
        improvement of such facilities, including related 
        machinery and equipment.
  (b) Selection of Projects.--The Secretary may provide 
assistance for a project under this section only if the 
Secretary finds that--
          (1) the project will directly or indirectly--
                  (A) tend to improve opportunities in the area 
                in which the project will be located for the 
                successful establishment or expansion of 
                industrial or commercial plants or facilities;
                  (B) otherwise assist in the creation of 
                additional long-term employment opportunities 
                for the area; or
                  (C) primarily benefit long-term unemployed 
                individuals and members of low-income families;
          (2) the project will fulfill all or part of a 
        pressing need of the area in which the project will be 
        located; and
          (3) the project is consistent with a comprehensive 
        economic development strategy that has been developed 
        in accordance with section 303 for the area in which 
        the project will be located.
  (c) Limitation.--Not more than 15 percent of the amounts made 
available to carry out this section in a fiscal year may be 
expended in any one State.

SEC. 202. CONSTRUCTION COST INCREASES.

  (a) In General.--Subject to subsection (b), the Secretary may 
increase the amount of a grant (including a supplemental grant) 
made for a construction project under this title (or title I of 
this Act, as in effect before the date of enactment of the 
Economic Development Partnership Act of 1998) if, after the 
grant has been made but before completion of the project, the 
cost of the project has increased and if an increase in the 
amount of the grant is necessary for the satisfactory 
completion and operation of the project.
  (b) Limitations.--The Secretary may not increase the amount 
of a grant for a project under subsection (a) if--
          (1) the increase would cause the Federal share of the 
        cost of the project to exceed the maximum percentage 
        permitted for the project under this Act, as in effect 
        at the time of the increase;
          (2) the amount of the increase exceeds 15 percent of 
        the original estimated cost of the project; or
          (3) the amount of the increase exceeds the difference 
        between the estimated cost of the project on the date 
        of the increase and the original estimated cost of the 
        project.

SEC. 203. PLANNING AND ADMINISTRATIVE EXPENSES.

  (a) Direct Grants.--Upon the application of an eligible 
recipient, the Secretary may make direct grants for economic 
development planning and for the administrative expenses of 
organizations undertaking such planning.
  (b) Planning To Reduce Unemployment and Increase Incomes.--
The planning for cities, other political subdivisions, Indian 
tribes, and sub-State planning and development organizations 
(including areas described in section 302(a) and economic 
development districts) assisted under this section shall 
include systematic efforts to reduce unemployment and increase 
incomes.
  (c) Planning Process.--Planning assisted under this section 
shall be a continuous process, involving public officials and 
private citizens, in analyzing local economies, defining 
development goals, determining project opportunities, and 
formulating and implementing a development program.
  (d) Use of Other Federal Funds.--Planning assistance received 
under this section shall be used in conjunction with any other 
available Federal planning assistance to ensure adequate and 
effective planning and economical use of funds.
  (e) State Plans.--
          (1) Preparation of plans.--A State plan prepared with 
        assistance under this section shall be prepared 
        cooperatively by the State, political subdivisions of 
        the State, and the economic development district 
        located in whole or in part within the State, as a 
        comprehensive economic development strategy.
          (2) Consistency with local and economic development 
        district plans.--Upon completion of a State plan 
        prepared with assistance under this section, the State 
        shall--
                  (A) certify to the Secretary that in the 
                preparation of the State plan, the local and 
                economic development district plans were 
                considered and, to the fullest extent possible, 
                the State plan is consistent with such plans; 
                and
                  (B) identify any inconsistencies between the 
                State plan and the local and economic 
                development district plans, with the 
                justification for each inconsistency.
          (3) Considerations.--Any overall State economic 
        development planning shall be a part of a comprehensive 
        planning process that shall consider providing public 
        works to--
                  (A) stimulate and channel development, 
                economic opportunities, and choices for 
                individuals;
                  (B) support sound land use;
                  (C) foster effective transportation access;
                  (D) promote sustainable development;
                  (E) enhance and protect the environment, 
                including the conservation and preservation of 
                open spaces and environmental quality;
                  (F) provide public services;
                  (G) promote technology development; and
                  (H) balance physical and human resources 
                through the management and control of physical 
                development.
          (4) Annual report.--A State receiving assistance 
        under this subsection shall transmit to the Secretary 
        an annual report on the planning process of the State.

SEC. 204. COST SHARING.

  Subject to section 205, the amount of a direct grant for a 
project under this title may not exceed 50 percent of the cost 
of the project. In determining the amount of the non-Federal 
share, the Secretary shall give due consideration to all 
contributions, both in cash and in kind, fairly evaluated, 
including contributions of space, equipment, and services.

SEC. 205. SUPPLEMENTARY GRANTS.

  (a) Authority To Make Supplementary Grants.--
          (1) In general.--Upon the application of an eligible 
        recipient, the Secretary may make a supplementary grant 
        for a project for which the applicant is eligible but, 
        because of the economic situation of the applicant, for 
        which the applicant cannot supply the required non-
        Federal share.
          (2) Types of assistance.--Supplementary grants under 
        this section may include grants to enable States and 
        other entities within areas described in section 302(a) 
        to take maximum advantage of designated Federal grant-
        in-aid programs (as defined in subsection (b)(4)), 
        direct grants-in-aid authorized under this title, 
        Federal grant-in-aid programs authorized by the 
        Watershed Protection and Flood Prevention Act (68 Stat. 
        666), and the 11 watersheds authorized by the Flood 
        Control Act of December 22, 1944 (58 Stat. 887).
  (b) Requirements Applicable to Supplementary Grants.--
          (1) Amount of grants.--The amount of a supplementary 
        grant for a project under this section may not exceed 
        the applicable percentage to be established by the 
        Secretary by regulation, but in no event may the non-
        Federal share of the aggregate cost of any such project 
        (including assumptions of debt) be less than 20 percent 
        of such cost, except as provided by paragraph (6).
          (2) Form of grants.--Supplementary grants shall be 
        made by the Secretary, in accordance with regulations 
        to be issued by the Secretary, by increasing the 
        amounts of direct grants authorized under this title or 
        by the payment of funds appropriated under this Act to 
        the heads of the departments, agencies, and 
        instrumentalities of the Federal Government responsible 
        for the administration of the applicable Federal 
        programs.
          (3) Federal share limitations specified in other 
        laws.--Notwithstanding any requirement as to the amount 
        or sources of non-Federal funds that may otherwise be 
        applicable to the Federal program involved, funds 
        provided under this section may be used for the purpose 
        of increasing the Federal contribution to a project in 
        an area described in section 302(a) under the Federal 
        program above the fixed maximum portion of the cost of 
        the project otherwise authorized by the applicable law.
          (4) Designated federal grant-in-aid programs 
        defined.--In this section, the term ``designated 
        Federal grant-in-aid programs'' means such existing or 
        future Federal grant-in-aid programs assisting in the 
        construction or equipping of facilities as the 
        Secretary may, in furtherance of the purposes of this 
        Act, designate as eligible for allocation of funds 
        under this section.
          (5) Consideration of relative need in determining 
        amount.--In determining the amount of a supplementary 
        grant available for a project under this title, the 
        Secretary shall take into consideration the relative 
        needs of the area and the nature of the project to be 
        assisted.
          (6) Exceptions.--
                  (A) Grants to indian tribes; disaster 
                assistance.--In the case of a grant to an 
                Indian tribe, or in the case of a grant for 
                assistance authorized by section 209(d), the 
                Secretary may reduce the non-Federal share 
                below the percentage specified in subsection 
                (b)(1) or waive the non-Federal share.
                  (B) Grants to states, political subdivisions, 
                and non-profits.--In the case of a grant to a 
                State (or a political subdivision of the State) 
                that the Secretary determines has exhausted its 
                effective taxing and borrowing capacity, or in 
                the case of a grant to a non-profit 
                organization that the Secretary determines has 
                exhausted its effective borrowing capacity, the 
                Secretary may reduce the non-Federal share 
                below the percentage specified in subsection 
                (b)(1) or may waive the non-Federal share for a 
                project the nature of which the Secretary 
                determines, in writing, warrants the reduction 
                or waiver of the non-Federal share.

SEC. 206. REGULATIONS TO ENSURE RELATIVE NEEDS ARE MET.

  The Secretary shall issue rules, regulations, and procedures 
to carry out this title to ensure that adequate consideration 
is given to the relative needs of eligible areas. In issuing 
such rules, regulations, and procedures for assistance under 
section 201, the Secretary shall consider among other relevant 
factors--
          (1) the severity of the rates of unemployment in the 
        eligible areas and the duration of such unemployment; 
        and
          (2) the income levels of families and the extent of 
        underemployment in eligible areas.

SEC. 207. TRAINING, RESEARCH, AND TECHNICAL ASSISTANCE.

  (a) Direct Grants.--
          (1) In general.--Upon the application of an eligible 
        recipient, the Secretary may make direct grants for 
        training, research, and technical assistance, including 
        grants for program evaluation and economic impact 
        analyses, that would be useful in alleviating or 
        preventing conditions of excessive unemployment or 
        underemployment.
          (2) Types of assistance.--Direct grants under this 
        section may include grants for project planning and 
        feasibility studies, demonstrations of innovative 
        activities or strategic economic development 
        investments, management and operational activities or 
        strategic economic development investments, management 
        and operational assistance, establishment of university 
        centers, establishment of business outreach centers, 
        and studies evaluating the needs of, and development 
        potentialities for, economic growth of areas that the 
        Secretary finds have substantial need for such 
        assistance.
          (3) Authority to waive non-federal share.--The 
        Secretary may waive the non-Federal share in the case 
        of a project under this section, without regard to 
        section 204 or 205.
  (b) Forms of Assistance.--In carrying out the Secretary's 
duties under this Act, the Secretary may--
          (1) provide research and technical assistance through 
        members of the staff of the Secretary;
          (2) make payments of funds authorized to carry out 
        this section to departments or agencies of the Federal 
        Government;
          (3) provide for the employment of private 
        individuals, partnerships, firms, corporations, or 
        suitable institutions under contracts entered into for 
        such purposes; or
          (4) award grants under this title.

SEC. 208. RELOCATION OF INDIVIDUALS AND BUSINESSES.

  Grants to eligible recipients under this Act shall include 
amounts that may be required to provide relocation assistance 
to affected persons, as required by the Uniform Relocation 
Assistance and Real Property Acquisition Policies Act 1970 (42 
U.S.C. 4601 et seq.).

SEC. 209. ECONOMIC ADJUSTMENT.

  (a) Direct Grants.--Upon the application of an eligible 
recipient, the Secretary may make direct grants for public 
facilities, public services, business development (including a 
revolving loan fund), planning, technical assistance, training, 
and other assistance that demonstrably furthers the economic 
adjustment objectives of this Act, including activities to 
alleviate long-term economic deterioration and sudden and 
severe economic dislocations.
  (b) Selection of Projects.--The Secretary may provide 
assistance for a project under this section only if the 
Secretary finds that--
          (1) the project will help the area for which the 
        project is to be undertaken meet a special need arising 
        from--
                  (A) actual or threatened severe unemployment 
                arising from economic dislocation, including 
                unemployment arising from actions of the 
                Federal Government; or
                  (B) economic adjustment problems resulting 
                from severe changes in economic conditions 
                (including long-term economic deterioration); 
                and
          (2) except with respect to planning projects, the 
        project is consistent with a comprehensive economic 
        development strategy that has been developed in 
        accordance with section 303 for the area for which the 
        project is to be undertaken.
  (c) Activities Related to Defense Reductions.--In order to 
help the communities diversify their economies, assistance 
under this section shall extend to activities identified by 
communities impacted by military base closures, defense 
contractor cutbacks, and Department of Energy defense-related 
reductions. Nothing in this subsection is intended to replace 
the efforts of the economic adjustment program of the 
Department of the Defense.
  (d) Post-Disaster Activities.--Assistance under this section 
shall extend to post-disaster activities in areas affected by 
natural or other disasters.
  (e) Activities Related to International Trade.--Assistance 
under this section shall extend to activities identified by 
communities that have suffered economic injury caused by 
international trade in order to help the communities 
restructure their economies.

SEC. 210. DIRECT EXPENDITURE OR REDISTRIBUTION BY RECIPIENT.

  Amounts from grants under section 209 may be used in direct 
expenditures by the eligible recipient or through 
redistribution by the eligible recipient to public and private 
entities in grants, loans, loan guarantees, payments to reduce 
interest on loan guarantees, or other appropriate assistance, 
but no grant may be made by an eligible recipient to a private 
profit-making entity.

SEC. 211. CHANGED PROJECT CIRCUMSTANCES.

  In any case in which a grant (including a supplemental grant) 
has been made by the Secretary for a project under this title 
(or under this Act, as in effect on the day before the date of 
enactment of the Economic Development Partnership Act of 1998), 
and after the grant has been made but before completion of the 
project, the purpose or scope of the project that was the basis 
of the grant has changed, the Secretary may approve the use of 
grant funds for the changed project if the Secretary determines 
that the changed project meets the requirements of this title 
and that the changes are necessary to enhance economic 
development in the area.

SEC. 212. USE OF FUNDS IN PROJECTS CONSTRUCTED UNDER PROJECTED COST.

  In any case in which a grant (including a supplemental grant) 
has been made by the Secretary under this title (or under this 
Act, as in effect on the day before the date of enactment of 
the Economic Development Partnership Act of 1998) for a 
construction project, and after the grant has been made but 
before completion of the project, the cost of the project 
(based upon the designs and specifications that were the basis 
of the grant) has decreased because of decreases in costs, the 
underrun funds may be used to improve the project either 
directly or indirectly, as determined by the Secretary.

SEC. 213. BASE CLOSINGS AND REALIGNMENTS.

  (a) Location of Projects.--In any case in which the Secretary 
determines there is a need for assistance under this title due 
to the closure or realignment of a military installation or a 
Department of Energy defense-related installation, the 
Secretary may make such assistance available for projects to be 
carried out on the installation and for projects to be carried 
out in communities adversely affected by the closure or 
realignment.
  (b) Interest in Property.--Notwithstanding any other 
provision of law, the Secretary may provide to an eligible 
recipient any assistance made available under this Act for a 
project to be carried out on a military installation, or a 
Department of Energy defense-related installation, that is 
closed or scheduled for closure or realignment without 
requiring the eligible recipient to have title to the property 
or a leasehold interest in the property for any specified term.

SEC. 214. PREVENTION OF UNFAIR COMPETITION.

  Financial assistance under this Act may not be extended to 
any project if--
          (1) the assistance would result in an increase in the 
        production of goods, materials, or commodities, or the 
        availability of services or facilities; and
          (2) there is not sufficient demand for such goods, 
        materials, commodities, services, or facilities to 
        employ the efficient capacity of existing competitive 
        commercial or industrial enterprises.

SEC. 215. SALE OF FINANCIAL INSTRUMENTS IN REVOLVING LOAN FUNDS.

  Any loan, loan guarantee, equity, or other financial 
instrument in the portfolio of a revolving loan fund, including 
any financial instrument made available using amounts from a 
grant made before the date of enactment of the Economic 
Development Partnership Act of 1998, may be sold, encumbered, 
or pledged at the discretion of the grantee of the fund, to a 
third party provided that the net proceeds of the transaction--
          (1) shall be deposited into the fund and may only be 
        used for activities which are consistent with the 
        purposes of this title; and
          (2) shall be subject to the financial management, 
        accounting, reporting, and auditing standards which 
        were applicable to the original grant.

SEC. 216. REPORTS BY RECIPIENT.

  (a) In General.--The Secretary shall require all recipients 
of assistance under this Act to submit reports to the 
Secretary.
  (b) Requirements.--Reports under subsection (a) shall--
          (1) be submitted at such intervals and in such manner 
        as the Secretary shall prescribe by regulation, not to 
        exceed 10 years from the time of closeout of the 
        assistance award; and
          (2) contain an evaluation of the effectiveness of the 
        economic assistance provided under this Act in meeting 
        the need the assistance was designed to alleviate and 
        the purposes of this Act.
  (c) Revolving Loan Funds.--
          (1) In general.--Except as provided by paragraph (2), 
        reports of the activities of a revolving loan fund may 
        be required at such intervals as may be provided by 
        regulation.
          (2) Limitation.--After final disbursements of 
        assistance to establish a revolving loan fund 
        (including assistance provided before the date of 
        enactment of the Economic Development Partnership Act 
        of 1998), reports of activities of the revolving loan 
        fund may not be required more frequently than annually.

    TITLE III--DEFINITIONS, ELIGIBILITY, AND COMPREHENSIVE ECONOMIC 
                         DEVELOPMENT STRATEGIES

SEC. 301. DEFINITIONS.

  In this Act, the following definitions apply:
          (1) Economic development district.--The term 
        ``economic development district'' means an area in the 
        United States composed of cooperating areas described 
        in section 302(a) and, where appropriate, designated 
        economic development centers and neighboring counties 
        or communities, that has been designated by the 
        Secretary as an economic development district. The term 
        includes any economic development district designated 
        by the Secretary under section 403 of this Act, as in 
        effect on the day before the date of enactment of the 
        Economic Development Partnership Act of 1998.
          (2) Economic development center.--The term ``economic 
        development center'' means an area in the United States 
        that has been identified as an economic development 
        center in an approved comprehensive economic 
        development strategy and that has been designated by 
        the Secretary as eligible for financial assistance 
        under this Act in accordance with the provisions of 
        this Act.
          (3) Eligible recipient.--The term ``eligible 
        recipient'' means--
                  (A) an area described in section 302(a);
                  (B) an economic development district 
                designated under section 401;
                  (C) an Indian tribe, a State, a city or other 
                political subdivision of a State, or a 
                consortium of such political subdivisions;
                  (D) an institution of higher education or a 
                consortium of such institutions; or
                  (E) a public or private nonprofit 
                organization or association acting in 
                cooperation with officials of such political 
                subdivision.
        For grants made under section 207, the term also 
        includes private individuals and for-profit 
        organizations.
          (4) Grant.--The term ``grant'' includes a cooperative 
        agreement, as that term is used in the Federal Grant 
        and Cooperative Agreement Act of 1977.
          (5) Indian tribe.--The term ``Indian tribe'' means 
        any Indian tribe, band, nation, pueblo, or other 
        organized group or community, including any Alaska 
        Native village or regional corporation as defined in or 
        established pursuant to the Alaska Native Claims 
        Settlement Act, which is recognized as eligible for the 
        special programs and services provided by the United 
        States to Indians because of their status as Indians.
          (6) Secretary.--The term ``Secretary'' means the 
        Secretary of Commerce.
          (7) State.--The terms ``State'', ``States'', and 
        ``United States'' include the several States, the 
        District of Columbia, the Commonwealth of Puerto Rico, 
        the Virgin Islands, Guam, American Samoa, the Republic 
        of the Marshall Islands, the Federated States of 
        Micronesia, the Republic of Palau, and the Commonwealth 
        of the Northern Mariana Islands.

SEC. 302. AREA ELIGIBILITY.

  (a) Certification.--In order to be eligible for assistance 
under section 201 or 209, a project shall serve an area that 
meets 1 or more of the following criteria:
          (1) The area has a per capita income of 80 percent or 
        less of the national average.
          (2) The area has an unemployment rate that is at 
        least 1 percent above the national average percentage 
        for the most recent 24-month period for which 
        statistics are available.
          (3) The area is determined by the Secretary to have 
        experienced, or to be reasonably foreseen as about to 
        experience, a special need to meet an expected rise in 
        unemployment or other economic adjustment problem 
        (including those caused by any action or decision of 
        the Federal Government).
          (4) The area is determined by the Secretary to be a 
        pocket of poverty or high unemployment within a larger 
        community of less economic distress and has 
        demonstrated a resistance to economic recovery without 
        assistance under this Act.
  (b) Documentation.--An applicant for assistance for a project 
under section 201 or 209 shall document, as part of an 
application for the assistance, the eligibilty of the project 
under the criteria of subsection (a) by using Federal data, 
when available, or, in the absence of recent Federal data, by 
using data available through the State government. An area 
meeting the criteria of subsection (a), including a pocket of 
poverty or high unemployment within a larger community of less 
economic distress, may be defined without regard to political 
or other boundaries.
  (c) Prior Designations.--Any designation of a redevelopment 
area made before the date of enactment of the Economic 
Development Partnership Act of 1998 shall not be effective 
after such date.

SEC. 303. COMPREHENSIVE ECONOMIC DEVELOPMENT STRATEGY.

  (a) In General.--The Secretary may provide assistance under 
section 201 or 209 (except planning assistance under section 
209) to an applicant for a project only if the applicant 
submits to the Secretary, as part of an application for the 
assistance, a comprehensive economic development strategy 
that--
          (1) identifies the economic development problems to 
        be addressed using the assistance;
          (2) identifies past, present, and projected future 
        economic development investments in the area receiving 
        the assistance and public and private participants and 
        sources of funding for the investments; and
          (3) sets forth a strategy for addressing the economic 
        problems identified pursuant to paragraph (1) and 
        describes how the strategy will solve the problems.
  (b) Other Plan.--The Secretary may accept as a comprehensive 
economic development strategy a satisfactory plan prepared 
under another Federally supported program.

                TITLE IV--ECONOMIC DEVELOPMENT DISTRICTS

SEC. 401. DESIGNATION OF ECONOMIC DEVELOPMENT DISTRICTS AND ECONOMIC 
                    DEVELOPMENT CENTERS.

  (a) In General.--In order that economic development projects 
of broader geographic significance may be planned and carried 
out, the Secretary may take the actions authorized by this 
section.
  (b) Designation of Economic Development Districts.--The 
Secretary may designate appropriate ``economic development 
districts'' within the United States with the concurrence of 
the States in which such districts will be wholly or partially 
located, if--
          (1) the proposed district is of sufficient size or 
        population, and contains sufficient resources, to 
        foster economic development on a scale involving more 
        than a single area described in section 302(a);
          (2) the proposed district contains at least 1 area 
        described in section 302(a);
          (3) the proposed district contains 1 or more areas 
        described in section 302(a) or economic development 
        centers identified in an approved district 
        comprehensive economic development strategy as having 
        sufficient size and potential to foster the economic 
        growth activities necessary to alleviate the distress 
        of the areas described in section 302(a) within the 
        district; and
          (4) the proposed district has a district 
        comprehensive economic development strategy that--
                  (A) includes sustainable development and 
                adequate land use and transportation planning;
                  (B) contains a specific program for district 
                cooperation, self-help, and public investment; 
                and
                  (C) is approved by the State or States 
                affected and by the Secretary.
  (c) Designation of Economic Development Centers.--The 
Secretary may designate as ``economic development centers'', 
under regulations to be issued by the Secretary, areas that the 
Secretary considers appropriate, if--
          (1) the proposed center has been identified and 
        included in an approved district comprehensive economic 
        development strategy and recommended by the State or 
        States affected for such special designation;
          (2) the proposed center is geographically and 
        economically so related to the district that its 
        economic growth may reasonably be expected to 
        contribute significantly to the alleviation of distress 
        in the areas described in section 302(a) of the 
        district; and
          (3) the proposed center does not have a population in 
        excess of 250,000 according to the most recent Federal 
        census.
  (d) Provision of Financial Assistance.--The Secretary may 
provide financial assistance in accordance with the criteria of 
this Act, except as otherwise expressly provided, for projects 
in economic development centers designated under subsection 
(c), if--
          (1) the project will further the objectives of the 
        comprehensive economic development strategy of the 
        district in which the project will be located;
          (2) the project will enhance the economic growth 
        potential of the district or result in additional long-
        term employment opportunities commensurate with the 
        amount of Federal financial assistance requested; and
          (3) the amount of Federal financial assistance 
        requested is reasonably related to the size, 
        population, and economic needs of the district.
  (e) Authorities.--The Secretary may, under regulations to be 
issued by the Secretary--
          (1) invite the several States to draw up proposed 
        economic development district boundaries and to 
        identify potential economic development centers;
          (2) encourage the States to consult with appropriate 
        local governmental authorities in the proposal of 
        economic development district boundaries or their 
        modification;
          (3) cooperate with the several States--
                  (A) in sponsoring and assisting district 
                economic planning and development groups; and
                  (B) in assisting such district groups to 
                formulate district comprehensive economic 
                development strategies; and
          (4) encourage participation by appropriate local 
        governmental authorities in such economic development 
        districts.

SEC. 402. TERMINATION OR MODIFICATION.

  The Secretary shall issue regulations to prescribe standards 
for the termination or modification of economic development 
districts and economic development centers designated under the 
authority of section 401.

SEC. 403. BONUS.

  Subject to the 20 percent non-Federal share requirement of 
section 205(b)(1), the Secretary may increase the amount of 
grant assistance authorized by sections 204 and 205 for 
projects within designated economic development districts by an 
amount not to exceed 10 percent of the aggregate cost of the 
project, in accordance with regulations to be issued by the 
Secretary, if--
          (1) the project applicant is actively participating 
        in the economic development activities of the district; 
        and
          (2) the project is consistent with an approved 
        district comprehensive economic development strategy.

SEC 404. STRATEGY PROVIDED TO APPALACHIAN REGIONAL COMMISSION.

  An economic development district designated by the Secretary 
under this title shall ensure that a copy of the district's 
comprehensive economic development strategy is furnished to the 
Appalachian Regional Commission established under the 
Appalachian Regional Development Act of 1965 if any part of 
such district is within the Appalachian region.

SEC. 405. PARTS NOT WITHIN AREAS DESCRIBED IN SECTION 302(A).

  The Secretary is authorized to provide financial assistance 
available to an area described in section 302(a) under this Act 
to those parts of an economic development district that are not 
within an area described in section 302(a), if the Secretary 
determines, in writing, that the assistance will be of a 
substantial direct benefit to an area described in section 
302(a) within such district. Such financial assistance shall be 
provided in the same manner and to the same extent as is 
provided in this Act for an area described in section 302(a).

                        TITLE V--ADMINISTRATION

SEC. 501. UNDER SECRETARY OF COMMERCE FOR ECONOMIC DEVELOPMENT.

  (a) Appointment.--The Secretary shall administer this Act 
with assistance of an Under Secretary of Commerce for Economic 
Development to be appointed by the President by and with the 
advice and consent of the Senate.
  (b) Duties.--The Under Secretary of Commerce for Economic 
Development shall perform such functions as the Secretary may 
prescribe and will serve as the administrator of the Economic 
Development Administration within the Department of Commerce.

SEC. 502. OFFICE OF ECONOMIC DEVELOPMENT INFORMATION.

  (a) Establishment.--The Secretary shall establish in the 
Economic Development Administration an Office of Economic 
Development Information (hereinafter in this section referred 
to as the ``Office'').
  (b) Duties.--The Office shall--
          (1) serve as a central information clearinghouse on 
        matters relating to economic development programs and 
        activities of the Federal Government and State 
        governments, including political subdivisions of 
        States;
          (2) help potential and actual applicants for economic 
        development assistance under Federal, State, and local 
        laws in locating and applying for such assistance, 
        including financial and technical assistance; and
          (3) develop electronic links or other connections to 
        information databases provided by Federal departments 
        and agencies, State and local governmental agencies, 
        public and private entities, and individuals to assist 
        other such agencies, entities, and individuals in the 
        process of identifying and applying for assistance and 
        resources under economic development programs and 
        activities of the Federal, State, and local 
        governments.
  (c) Electronic Links and Connections.--The databases to which 
the Office shall develop electronic links or other connections 
shall include the following kinds of information:
          (1) Relevant information concerning available 
        economic development programs of the Federal 
        Government, including key contact personnel, 
        descriptions of the application process, eligibility 
        requirements and criteria, selection and follow-up 
        procedures, and other such relevant information.
          (2) Relevant information concerning major State and 
        local governmental economic development programs, 
        including lists of appropriate offices, officers, and 
        contact personnel connected with, or involved in, such 
        programs.
          (3) Relevant and available economic data and trends, 
        including information about the national, regional, and 
        local impacts of trade agreements, defense spending and 
        downsizing, technological change, and other sources of 
        substantial economic dislocation.
          (4) Case studies and best practices in economic 
        development, adjustment, and reinvestment.
          (5) Technology utilization programs, assistance, and 
        resources.
          (6) Compilations of published works (including 
        bibliographies, books, reports, articles, videos, and 
        tapes), and selected texts of such works, related to 
        all facets of economic development.
          (7) Information concerning current revolving loan 
        fund programs and finance programs directly related to 
        economic development objectives.
          (8) Resources that assist in identifying potential 
        sources of capital for businesses, including revolving 
        loan funds, venture capital, and other capital tools.
          (9) Resources, including geographic information 
        systems, that assist economic developers in 
        understanding and pursuing sustainable development and 
        initiatives.
  (d) Public Access to Data Services.--The Office shall 
establish the means to ensure easy access by the public to the 
Office's information clearinghouse, and shall take all 
appropriate steps to ensure that the clearinghouse and its 
resources are as accessible and user-friendly as possible. As 
soon as practicable, and until replaced by a means determined 
by the Secretary to be more effective in accomplishing the 
purposes of this section, access to the data services of the 
Office shall include each of the following means:
          (1) An Internet web site, with sorted key locations 
        by economic development related topic, for users to 
        access lists of various Governmentwide and other 
        economic development web site resources.
          (2) A toll-free nationwide telephone number to 
        provide direct phone access to the public.
          (3) On-line electronic access through existing 
        computer network services and publicly available 
        computer database access facilities.
          (4) Printed manuals and orientation materials.
          (5) Periodic orientation workshops available to the 
        public.
          (6) On-call information specialists to address 
        special problems requiring person-to-person assistance.
  (e) Coordination With Other Federal Departments and 
Agencies.--The Secretary shall enter into such agreements and 
understandings as may be necessary with other Federal 
departments and agencies to coordinate the accomplishment of 
the objectives of this section.
  (f) Economic Development Defined.--In this section, the term 
``economic development'' includes economic adjustment, disaster 
recovery, industrial retention, and defense reinvestment.

SEC. 503. CONSULTATION WITH OTHER PERSONS AND AGENCIES.

  (a) Consultation on Problems Relating to Employment.--The 
Secretary may confer with any persons, including 
representatives of labor, management, agriculture, and 
government, who can assist in meeting the problems of area and 
regional unemployment.
  (b) Consultation on Administration of Act.--The Secretary may 
make provisions for such consultation with interested 
departments and agencies as the Secretary may deem appropriate 
in the performance of the functions vested in the Secretary by 
this Act.

SEC. 504. ADMINISTRATION, OPERATION, AND MAINTENANCE.

  Federal assistance may not be approved under this Act unless 
the Secretary is satisfied that the project for which the 
Federal assistance is to be granted will be properly and 
efficiently administered, operated, and maintained.

SEC. 505. FIRMS DESIRING FEDERAL CONTRACTS.

  The Secretary may furnish the procurement divisions of the 
various departments, agencies, and other instrumentalities of 
the Federal Government with a list--
          (1) containing the names and addresses of business 
        firms that are located in areas of high economic 
        distress and are seeking Government contracts for the 
        furnishing of supplies or services; and
          (2) designating the supplies and services that the 
        firms provide.

SEC. 506. AMENDMENTS TO TITLE 5, U.S.C.

  Title 5, United States Code, is amended--
          (1) in section 5314 by inserting ``, Under Secretary 
        of Commerce for Economic Development,'' after ``Under 
        Secretary of Commerce for Export Administration''; and
          (2) in section 5316 by striking ``Administrator for 
        Economic Development.''.

SEC. 507. NOTIFICATION OF REORGANIZATION.

  The Secretary shall notify the Committees on Transportation 
and Infrastructure and on Appropriations of the House of 
Representatives and the Committees on Environment and Public 
Works and on Appropriations of the Senate of any reorganization 
of the offices, programs, or activities of the Economic 
Development Administration on or before the 30th day preceding 
the date of the reorganization.

SEC. 508. PERFORMANCE EVALUATIONS OF GRANT RECIPIENTS.

  (a) In General.--The Secretary shall conduct an evaluation of 
each university center and economic development district 
receiving grant assistance under this Act to assess the 
grantee's performance and contribution toward job retention and 
creation. Evaluations shall be conducted on a continuing basis 
so that each grantee will be evaluated within 3 years after the 
first award of assistance to the grantee after the date of 
enactment of the Economic Development Partnership Act of 1998, 
and at least once every 3 years thereafter, so long as the 
grantee continues to receive such assistance.
  (b) Criteria.--
          (1) Establishment.--The Secretary shall establish 
        criteria for use in conducting evaluations under 
        subsection (a).
          (2) Criteria for university centers.--The criteria 
        for evaluation of a university center shall, at a 
        minimum, provide for an assessment of the center's 
        contribution to providing technical assistance, 
        conducting applied research, and disseminating results 
        of the center's activities.
          (3) Criteria for economic development districts.--The 
        criteria for evaluation of an economic development 
        district shall, at a minimum, provide for an assessment 
        of management standards, financial accountability, and 
        program performance.
  (c) Peer Review.--In conducting an evaluation of a university 
center or economic development district under subsection (a), 
the Secretary shall provide for the participation of at least 
one other university center or economic development district, 
as appropriate, on a cost-reimbursement basis.

SEC. 509. COORDINATION.

  (a) In General.--The Secretary shall actively coordinate with 
other Federal programs, States, economic development districts, 
and other appropriate planning and development organizations 
the activities relating to the requirements for comprehensive 
economic development strategies and making grants under this 
Act.
  (b) Federal Coordinating Council for Economic Development.--
          (1) In general.--The Secretary shall establish a 
        Federal Coordinating Council for Economic Development.
          (2) Composition of council.--The Council shall be 
        composed of representatives from Federal agencies 
        involved in matters that affect regional economic 
        development.
          (3) Duties.--The Council shall assist in providing a 
        unifying framework for economic and regional 
        development efforts and develop a Governmentwide 
        strategic plan for economic development.

SEC. 510. ECONOMIC DEVELOPMENT REVOLVING LOAN FUND TASK FORCE.

  (a) Establishment.--The Secretary of Commerce shall 
establish, within the Department of Commerce, an Economic 
Development Revolving Loan Fund Task Force.
  (b) Membership.--The members of the Task Force shall include, 
at a minimum, representatives of--
          (1) the Economic Development Administration;
          (2) the Office of Inspector General of the Department 
        of Commerce;
          (3) current operators of revolving loan funds 
        established with assistance provided under the Public 
        Works and Economic Development Act of 1965; and
          (4) economic development organizations.
  (c) Duties.--The Task Force shall review the financial 
management, accounting, reporting, and auditing standards and 
requirements of revolving loan funds described in subsection 
(b)(3).
  (d) Recommendations.--Based upon its review, the Task Force 
shall make recommendations to the Secretary to better 
streamline and lessen revolving loan fund reporting 
requirements.

                        TITLE VI--MISCELLANEOUS

SEC. 601. POWERS OF SECRETARY.

  (a) In General.--In performing the Secretary's duties under 
this Act, the Secretary is authorized to take the following 
actions:
          (1) To adopt, alter, and use a seal, which shall be 
        judicially noticed.
          (2) Subject to the civil-service and classification 
        laws, to select, employ, appoint, and fix the 
        compensation of such personnel as may be necessary to 
        carry out the provisions of this Act.
          (3) To hold such hearings, sit and act at such times 
        and places, and take such testimony, as the Secretary 
        may deem advisable.
          (4) To request directly from any executive 
        department, bureau, agency, board, commission, office, 
        independent establishment, or instrumentality 
        information, suggestions, estimates, and statistics 
        needed to carry out the purposes of this Act. Each 
        department, bureau, agency, board, commission, office, 
        establishment, or instrumentality is authorized to 
        furnish such information, suggestions, estimates, and 
        statistics directly to the Secretary.
          (5) Under regulations prescribed by the Secretary, to 
        assign or sell at public or private sale, or otherwise 
        dispose of for cash or credit, in the Secretary's 
        discretion and upon such terms and conditions and for 
        such consideration as the Secretary determines to be 
        reasonable, any evidence of debt, contract, claim, 
        personal property, or security assigned to or held by 
        the Secretary in connection with assistance extended 
        under the Act, and to collect or compromise all 
        obligations assigned to or held by the Secretary in 
        connection with such assistance until such time as such 
        obligations may be referred to the Attorney General for 
        suit or collection.
          (6) To deal with, complete, renovate, improve, 
        modernize, insure, rent, or sell for cash or credit, 
        upon such terms and conditions and for such 
        consideration as the Secretary determines to be 
        reasonable, any real or personal property conveyed to 
        or otherwise acquired by the Secretary in connection 
        with assistance extended under this Act.
          (7) To pursue to final collection, by way of 
        compromise or other administrative action, prior to 
        reference to the Attorney General, all claims against 
        third parties assigned to the Secretary in connection 
        with assistance extended under this Act.
          (8) To acquire, in any lawful manner, any property 
        (real, personal, or mixed, tangible or intangible), 
        whenever necessary or appropriate in connection with 
        assistance extended under this Act.
          (9) In addition to any powers, functions, privileges, 
        and immunities otherwise vested in the Secretary, to 
        take any action, including the procurement of the 
        services of attorneys by contract, determined by the 
        Secretary to be necessary or desirable in making, 
        purchasing, servicing, compromising, modifying, 
        liquidating, or otherwise administratively dealing with 
        assets held in connection with financial assistance 
        extended under this Act.
          (10) To employ experts and consultants or 
        organizations as authorized by section 3109 of title 5, 
        United States Code, compensate individuals so employed, 
        including travel time, and allow them, while away from 
        their homes or regular places of business, travel 
        expenses (including per diem in lieu of subsistence) as 
        authorized by section 5703 of title 5, United States 
        Code, for persons in the Government service employed 
        intermittently, while so employed, except that 
        contracts for such employment may be renewed annually.
          (11) To establish performance measures for grants and 
        other assistance provided under this Act, and use such 
        performance measures to evaluate the economic impact of 
        economic development assistance programs. The 
        establishment and use of such performance measures 
        shall be provided by the Secretary through members of 
        the Secretary's staff, through the employment of 
        appropriate parties under contracts entered into for 
        such purposes, or through grants to such parties for 
        such purposes, using any funds made available by 
        appropriation to carry out this Act.
          (12) To conduct environmental reviews and incur 
        necessary expenses to evaluate and monitor the 
        environmental impact of economic development assistance 
        provided and proposed to be provided under this Act, 
        including costs associated with the representation and 
        defense of actions of the Secretary related to the 
        environmental impact of such assistance, using any 
        funds made available by appropriation to carry out 
        section 207 of this Act.
          (13) To sue and be sued in any court of record of a 
        State having general jurisdiction or in any United 
        States district court. Jurisdiction is conferred upon 
        such district court to determine such controversies 
        without regard to the amount in controversy, but no 
        attachment, injunction, garnishment, or other similar 
        process, mesne or final, shall be issued against the 
        Secretary or the Secretary's property.
          (14) To establish such rules, regulations, and 
        procedures as the Secretary considers appropriate in 
        carrying out the provisions of this Act.
  (b) Deficiency Judgments.--The authority under subsection 
(a)(7) to pursue claims shall include the authority to obtain 
deficiency judgments or otherwise in the case of mortgages 
assigned to the Secretary.
  (c) Inapplicability of Certain Other Requirements.--Section 
3709 of the Revised Statutes of the United States shall not 
apply to any contract of hazard insurance or to any purchase or 
contract for services or supplies on account of property 
obtained by the Secretary as a result of assistance extended 
under this Act if the premium for the insurance or the amount 
of the insurance does not exceed $1,000.
  (d) Property Interests.--The powers of the Secretary, 
pursuant to this section, in relation to property acquired by 
the Secretary in connection with assistance extended under this 
Act, shall extend to property interests of the Secretary in 
relation to projects approved under the Public Works and 
Economic Development Act of 1965, title I of the Public Works 
Employment Act of 1976, title II of the Trade Act of 1974, and 
the Community Emergency Drought Relief Act of 1977.
  (e) Powers of Conveyance and Execution.--The power to convey 
and to execute, in the name of the Secretary, deeds of 
conveyance, deeds of release, assignments and satisfactions of 
mortgages, and any other written instrument relating to real or 
personal property or any interest therein acquired by the 
Secretary pursuant to the provisions of this Act may be 
exercised by the Secretary, or by any officer or agent 
appointed by the Secretary for such purpose, without the 
execution of any express delegation of power or power of 
attorney.

SEC. 602. MAINTENANCE OF STANDARDS.

  The Secretary shall continue to implement and enforce the 
provisions of section 712 of this Act, as in effect on the day 
before the date of enactment of the Economic Development 
Partnership Act of 1998.

SEC. 603. ANNUAL REPORT TO CONGRESS.

  The Secretary shall transmit a comprehensive and detailed 
annual report to Congress on the Secretary's activities under 
this Act for fiscal year 1998 and each fiscal year thereafter. 
Such report shall be printed and transmitted to Congress not 
later than July 1 of the year following the fiscal year with 
respect to which the report is to be made.

SEC. 604. USE OF OTHER FACILITIES.

  (a) Delegation of Functions to Other Federal Departments and 
Agencies.--The Secretary may delegate to the heads of other 
departments and agencies of the Federal Government any of the 
Secretary's functions, powers, and duties under this Act as the 
Secretary may deem appropriate, and authorize the redelegation 
of such functions, powers, and duties by the heads of such 
departments and agencies.
  (b) Transfer Between Departments.--Funds authorized to be 
appropriated under this Act may be transferred between 
departments and agencies of the Government, if such funds are 
used for the purposes for which they are specifically 
authorized and appropriated.
  (c) Funds Transferred From Other Departments and Agencies.--
In order to carry out the objectives of this Act, the Secretary 
may accept transfers of funds from other departments and 
agencies of the Federal Government if the funds are used for 
the purposes for which (and in accordance with the terms under 
which) the funds are specifically authorized and appropriated. 
Such transferred funds shall remain available until expended, 
and may be transferred to and merged with the appropriations 
under the heading ``salaries and expenses'' by the Secretary to 
the extent necessary to administer the program.

SEC. 605. PENALTIES.

  (a) False Statements, Security Overvaluation.--Whoever makes 
any statement knowing it to be false, or whoever willfully 
overvalues any security, for the purpose of obtaining for such 
person or for any applicant any financial assistance under this 
Act or any extension of such assistance by renewal, deferment 
or action, or otherwise, or the acceptance, release, or 
substitution of security for such assistance, or for the 
purpose of influencing in any way the action of the Secretary 
or for the purpose of obtaining money, property, or anything of 
value, under this Act, shall be fined under title 18, United 
States Code, imprisoned for not more than 5 years, or both.
  (b) Embezzlement and Fraud-Related Crimes.--Whoever, being 
connected in any capacity with the Secretary in the 
administration of this Act--
          (1) embezzles, abstracts, purloins, or willfully 
        misapplies any moneys, funds, securities, or other 
        things of value, whether belonging to such person or 
        pledged or otherwise entrusted to such person;
          (2) with intent to defraud the Secretary or any other 
        politic or corporate, or any individual, or to deceive 
        any officer, auditor, or examiner, makes any false 
        entry in any book, report, or statement of or to the 
        Secretary or without being duly authorized draws any 
        orders or issues, puts forth, or assigns any note, 
        debenture, bond, or other obligation, or draft, bill of 
        exchange, mortgage, judgment, or decree thereof;
          (3) with intent to defraud, participates or shares in 
        or receives directly or indirectly any money, profit, 
        property, or benefit through any transaction, loan, 
        grant, commission, contract, or any other act of the 
        Secretary; or
          (4) gives any unauthorized information concerning any 
        future action or plan of the Secretary that might 
        affect the value of securities, or having such 
        knowledge invests or speculates, directly or 
        indirectly, in the securities or property of any 
        company or corporation receiving loans, grants, or 
        other assistance from the Secretary, shall be fined 
        under title 18, United States Code, imprisoned for not 
        more than 5 years, or both.

SEC. 606. EMPLOYMENT OF EXPEDITERS AND ADMINISTRATIVE EMPLOYEES.

  Financial assistance may not be extended by the Secretary 
under this Act to any business enterprise unless the owners, 
partners, or officers of such business enterprise--
          (1) certify to the Secretary the names of any 
        attorneys, agents, and other persons engaged by or on 
        behalf of such business enterprise for the purpose of 
        expediting applications made to the Secretary for 
        assistance of any sort, under this Act, and the fees 
        paid or to be paid to any such person; and
          (2) execute an agreement binding such business 
        enterprise, for a period of 2 years after such 
        assistance is rendered by the Secretary to such 
        business enterprise, to refrain from employing, 
        tendering any office or employment to, or retaining for 
        professional services, any person who, on the date such 
        assistance or any part thereof was rendered, or within 
        the 1-year period ending on such date, shall have 
        served as an officer, attorney, agent, or employee, 
        occupying a position or engaging in activities that the 
        Secretary determines involves discretion with respect 
        to the granting of assistance under this Act.

SEC. 607. MAINTENANCE OF RECORDS OF APPROVED APPLICATIONS FOR FINANCIAL 
                    ASSISTANCE; PUBLIC INSPECTION.

  (a) Maintenance of Record Requires.--The Secretary shall 
maintain as a permanent part of the records of the Department 
of Commerce a list of applications approved for financial 
assistance under this Act that will be kept available for 
public Inspection during the regular business hours of the 
Department of Commerce.
  (b) Posting to List.--The following information shall be 
posted in such list as soon as each application is approved:
          (1) The name of the applicant and, in the case of 
        corporate applications, the names of the officers and 
        directors thereof.
          (2) The amount and duration of the financial 
        assistance for which application is made.
          (3) The purposes for which the proceeds of the 
        financial assistance are to be used.

SEC. 608. RECORDS AND AUDIT.

  (a) Recordkeeping and Disclosure Requirements.--Each 
recipient of assistance under this Act shall keep such records 
as the Secretary shall prescribe, including records that fully 
disclose the amount and the disposition by such recipient of 
the proceeds of such assistance, the total cost of the project 
or undertaking in connection with which such assistance is 
given or used, and the amount and nature of that portion of the 
cost of the project or undertaking supplied by other sources, 
and such other records as will facilitate an effective audit.
  (b) Access to Books for Examination and Audit.--The 
Secretary, the Inspector General of the Department of Commerce, 
and the Comptroller General of the United States, or any of 
their duly authorized representatives, shall have access for 
the purpose of audit and examination to any books, documents, 
papers, and records of the recipient that are pertinent to 
assistance received under this Act.

SEC. 609. PROHIBITION AGAINST A STATUTORY CONSTRUCTION THAT MIGHT CAUSE 
                    DIMINUTION IN OTHER FEDERAL ASSISTANCE.

  All financial and technical assistance authorized under this 
Act shall be in addition to any Federal assistance previously 
authorized, and no provision of this Act may be construed as 
authorizing or permitting any reduction or diminution in the 
proportional amount of Federal assistance that any State or 
other entity eligible under this Act would otherwise be 
entitled to receive under the provisions of any other Act.

SEC. 610. ACCEPTANCE OF APPLICANTS' CERTIFICATIONS.

  The Secretary may accept, when deemed appropriate, the 
applicants' certifications to meet the requirements of this 
Act.

                           TITLE VII--FUNDING

SEC. 701. AUTHORIZATION OF APPROPRIATIONS.

  There is authorized to be appropriated to carry out this Act 
$368,000,000 for each of fiscal years 1999 through 2003. Such 
sums shall remain available until expended.

SEC. 702. ADMINISTRATIVE EXPENSES.

  In addition to the appropriations authorized by section 701, 
there are authorized to be appropriated for administrative 
expenses of the Secretary in carrying out this Act such sums as 
may be necessary for each of fiscal years 1999 through 2003. 
Such sums shall remain available until expended.

SEC. 703. DEFENSE CONVERSION ACTIVITIES.

  In addition to the appropriations authorized by section 701 
for defense conversion activities, there are authorized to be 
appropriated to carry out this Act for each of fiscal years 
2000 through 2003 such sums as may be necessary to provide 
assistance for such activities. Such sums shall remain 
available until expended.
                              ----------                              


TITLE 5, UNITED STATES CODE

           *       *       *       *       *       *       *


PART III--EMPLOYEES

           *       *       *       *       *       *       *


Subpart D--Pay and Allowances

           *       *       *       *       *       *       *


CHAPTER 53--PAY RATES AND SYSTEMS

           *       *       *       *       *       *       *


SUBCHAPTER II--EXECUTIVE SCHEDULE PAY RATES

           *       *       *       *       *       *       *


Sec. 5314. Positions at level III

  Level III of the Executive Schedule applies to the following 
positions, for which the annual rate of basic pay shall be the 
rate determined with respect to such level under chapter 11 of 
title 2, as adjusted by section 5318 of this title:
          Solicitor General of the United States.

           *       *       *       *       *       *       *

          Under Secretary of Commerce, Under Secretary of 
        Commerce for Economic Affairs, Under Secretary of 
        Commerce for Export Administration, Under Secretary of 
        Commerce for Economic Development, and Under Secretary 
        of Commerce for Travel and Tourism.

           *       *       *       *       *       *       *


Sec. 5316. Positions at level V

  Level V of the Executive Schedule applies to the following 
positions, for which the annual rate of basic pay shall be the 
rate determined with respect to such level under chapter 11 of 
title 2, as adjusted by section 5318 of this title:
          Administrator, Bonneville Power Administration, 
        Department of the Interior.

           *       *       *       *       *       *       *

          [Administrator for Economic Development.]

           *       *       *       *       *       *       *

                              ----------                              


APPALACHIAN REGIONAL DEVELOPMENT ACT OF 1965

           *       *       *       *       *       *       *


                   findings and statement of purpose

  Sec. 2. (a) * * *

           *       *       *       *       *       *       *

  (c) 1998 Findings and Purposes.--The Congress further finds 
and declares that, while substantial progress has been made in 
fulfilling many of the objectives of this Act, rapidly changing 
national and global economies over the past decade have created 
new problems and challenges for rural areas throughout the 
Nation and especially for the Appalachian region. It is, 
therefore, also the purpose of this Act to assist the region in 
providing the infrastructure necessary for economic and human 
resource development, in developing its industry, in building 
entrepreneurial communities, in generating a diversified 
regional economy, and in making its industrial and commercial 
resources more competitive in national and world markets. It is 
further the purpose of this Act to provide a framework for 
coordinating Federal, State, and local initiatives to respond 
to the economic competitive challenge through improving the 
skills of the region's workforce, adapting and applying new 
technologies for the region's businesses, and improving the 
access of the region's businesses to the technical and 
financial resources necessary to their development. Finally, it 
is the purpose of this Act to address the needs of severely and 
persistently distressed areas of the region and focus special 
attention on the areas of greatest need so as to provide a 
fairer opportunity for the people of the region to share the 
quality of life generally enjoyed by citizens across this 
Nation.

              TITLE I--THE APPALACHIAN REGIONAL COMMISSION

                         membership and voting

  Sec. 101. (a) There is hereby established an Appalachian 
Regional Commission (hereinafter referred to as the 
``Commission'') which shall be composed of one Federal member, 
hereinafter referred to as the ``Federal Cochairman,'' 
appointed by the President by and with the advice and consent 
of the Senate, and one member from each participating State in 
the Appalachian region. The Federal Cochairman shall be one of 
the two Cochairmen of the Commission. Each State member shall 
be the Governor. The State members of the Commission shall 
elect a Chochairman of the Commission from among their number 
for a term of not less than one year. The Commission shall 
conduct at least one meeting each year with the Federal 
Cochairman and at least a majority of the State members 
present. The Commission may conduct such additional meetings by 
electronic means as the Commission considers advisable, 
including meetings to decide matters requiring an affirmative 
vote.
  (b) Except as provided in section 105, decisions by the 
Commission shall require the affirmative vote of the Federal 
Cochairman and of a majority of the State members (exclusive of 
members representing States delinquent under section 105). In 
matters coming before the Commission, the Federal Chochairman 
shall, to the extent practicable, consult with the Federal 
departments and agencies having an interest in the subject 
matter. [No decision involving Commission policy, approval of 
State, regional or subregional development plans or 
implementing investment programs, any modification or revision 
of the Appalachian Regional Commission Code, or any allocation 
of funds among the States may be made without a quorum of State 
members present.] No decision involving Commission policy, 
approval of State, regional, or subregional development plans 
or implementing investment programs, any modification or 
revision of the Appalachian Regional Commission Code, any 
allocation of funds among the State, or any designation of a 
distressed county or an economically strong county may be made 
without a quorum of State members. The approval of project and 
grant proposals shall be a responsibility of the Commission and 
exercised in accordance with section 303 of this Act.
  (c) Each State member may have a single alternate, appointed 
by the Governor from among the members of the Governor's 
cabinet or the Governor's personal staff. The President, by and 
with the advice and consent of the Senate, shall appoint an 
alternate for the Federal Cochairman. An alternate shall vote 
in the event of the absence, death, disability, removal, or 
resignation of the State or Federal representative for which he 
is an alternate. A State alternate shall not be counted toward 
the establishment of a quorum of the Commission in any instance 
in which a quorum of the State members is required [to be 
present]. No Commission powers or responsibilities specified in 
the last two sentences of subsection (b) of this section, nor 
the vote of any Commission member, may be delegated to any 
person not a Commission member or who is not entitled to vote 
in Commission meetings.

           *       *       *       *       *       *       *


               administrative expenses of the commission

  Sec. 105. [(a) For the period ending on June 30, 1967, the 
administrative expenses of the Commission shall be paid by the 
Federal Government. Thereafter, such expenses] Administrative 
expenses of the Commission shall be paid 50 per centum by the 
Federal Government and 50 per centum by the States in the 
region, except that the expenses of the Federal Cochairman, his 
alternate, and his staff shall be paid solely by the Federal 
Government. The share to be paid by each State shall be 
determined by the Commission. The Federal Cochairman shall not 
participate or vote in such determination. No assistance 
authorized by this Act shall be furnished to any State or to 
any political subdivision or any resident of any State, nor 
shall the State member of the Commission participate or vote in 
any determination by the Commission while such State is 
delinquent in payment of its share of such expenses.
  [(b) To carry out this section there is hereby authorized to 
be appropriated to the Commission to be available until 
expended, not to exceed $1,900,000 for the two-fiscal-year 
period ending June 30, 1971. To carry out this section there is 
hereby authorized to be appropriated to the Commission, to be 
available until expended not to exceed $2,700,000 for the two-
fiscal-year period ending June 30,1973 (of such amount not to 
exceed $525,000 shall be available for expenses of the Federal 
cochairman, his alternate, and his staff), and not to exceed $3,000,000 
for the two-fiscal-year period ending June 30, 1975 (of such amount not 
to exceed $575,000 shall be available for expenses of the Federal 
Cochairman, his alternate, and his staff. To carry out this section 
there is hereby authorized to be appropriated to the Commission, to be 
available until expended, not to exceed $4,600,000 for the period 
beginning July 1, 1975, and ending September 30, 1977, (of such amount 
not to exceed $800,000 shall be available for expenses of the Federal 
Cochairman, his alternate, and his staff), and not to exceed $5,000,000 
for the two-fiscal-year period ending September 30, 1979 (of such 
amount not to exceed $900,000 shall be available for expenses of the 
Federal cochairman, his alternate, and his staff), and not to exceed 
$6,700,000 for the two-fiscal-year period ending September 30, 1981 (of 
such amount not to exceed $1,100,000 shall be available for expenses of 
the Federal cochairman, his alternate, and his staff), and not to 
exceed $2,900,000 for the two-fiscal-year period ending September 30, 
1982 (of such amount not to exceed $400,000 shall be available for 
expenses of the Federal cochairman, his alternate, and his staff).]

                  administrative powers of commission

  Sec. 106. To carry out its duties under this Act, the 
Commission is authorized to--
          (1) * * *
          (2) appoint and fix the compensation of an executive 
        director and such other personnel as may be necessary 
        to enable the Commission to carry out its functions, 
        except that such compensation shall not exceed [the 
        salary of the alternate to the Federal Cochairman on 
        the Commission as provided in section 101] the maximum 
        rate for the Senior Executive Service under section 
        5382 of title 5, United States Code, including any 
        applicable locality-based comparability payment that 
        may be authorized under section 5304(h)(2)(c) of such 
        title 5. The executive director shall be responsible 
        for carrying out the administrative functions of the 
        Commission, for direction of the Commission staff, and 
        for such other duties as the Commission may assign. No 
        member, alternate, officer, or employee of the 
        Commission, other than the Federal Cochairman on the 
        Commission, his staff, and his alternate and Federal 
        employees detailed to the Commission under paragraph 
        (3) shall be deemed a Federal employee for any purpose.

           *       *       *       *       *       *       *

          (7) enter into and perform such contracts, leases 
        (including notwithstanding any other provision of law, 
        the lease of office space for any term expiring no 
        later than September 30, [1982] 2003), cooperative 
        agreements, or other transactions as may be necessary 
        in carrying out its functions and on such terms as it 
        may deem appropriate, with any department, agency, or 
        instrumentality of the United States (which is hereby 
        so authorized to the extent not otherwise prohibited by 
        law) or with any State, or any political subdivision, 
        agency, or instrumentality thereof, or with any person, 
        firm, association, or corporation.

           *       *       *       *       *       *       *


                 TITLE II--SPECIAL APPALACHIAN PROGRAMS

Part A--New Programs

           *       *       *       *       *       *       *


                     demonstration health projects

  Sec. 202. (a) * * *

           *       *       *       *       *       *       *

  (c) Grants under this section for operation (including 
initial operating funds and operating deficits comprising among 
other items the costs of attracting, training, and retaining 
qualified personnel) of a demonstration health project, whether 
or not constructed with funds authorized by this section, may 
be made for up to [100 per centum of the costs thereof for the 
two-year period beginning, for each component facility or 
service assisted under any such operating grant, on the first 
day that such facility or service is in operation as a part of 
the project. For the next three years of operations such grants 
shall not exceed 75 per centum of such costs.] 50 percent of 
the costs thereof (or 80 percent of such costs in the case of a 
project to be carried out in a county for which a distressed 
county designation is in effect under section 226). The Federal 
contribution may be provided entirely from funds appropriated 
to carry out this section or in combination with funds provided 
under other Federal grant-in-aid programs for the operation of 
health related facilities and the provision of health and child 
development services, including title IV, parts A and B, and 
title XX of the Social Security Act. Notwithstanding any 
provision of the Social Security Act requiring assistance or 
services on a statewide basis, if a State provides assistance 
or services under such a program in any area of the region 
approved by the Commission, such State shall be considered as 
meeting such requirement. Notwithstanding any provision of law 
limiting the Federal share in such other programs, funds 
appropriated to carry out this section may be used to increase 
Federal grants for operating components of a demonstration 
health project to the maximum percentage cost thereof 
authorized by this subsection. No grant for operation of a 
demonstration health project shall be made unless the facility 
is publicly owned, or owned by a public or private nonprofit 
organization, and is not operated for profit. No grant for 
operation of a demonstration health project shall be made after 
five years following the commencement of the initial grant for 
operation of the project, that child development demonstrations 
assisted under this section during fiscal year 1979 may, upon 
State request, be approved under section 303 of this Act for 
continued support beyond that period if the Commission finds 
that no Federal, State, or local funds are available to 
continue such demonstrations. No such grants shall be made 
unless the Secretary of Health, Education, and Welfare is 
satisfied that the operation of the project will be conducted 
under efficient management practices designed to obviate 
operating deficits. Notwithstanding section 104of the Public 
Works and Economic Development Act of 1965 (79 Stat. 554), a health-
related facility constructed under title I of that Act may be a 
component of a demonstration health project eligible for operating 
grant assistance under this section.

           *       *       *       *       *       *       *

  (f) Maximum Commission Contribution After September 30, 
1998.--After September 30, 1998, not more than 50 percent of 
any project cost eligible for financial assistance under this 
section may be provided from funds appropriated to carry out 
this Act; except that such maximum Commission contribution may 
be increased to 80 percent, or to the percentage of the maximum 
Federal contribution authorized by this section, whichever is 
less, for a project to be carried out in a county for which a 
distressed county designation is in effect under section 226.

         [land stabilization, conservation, and erosion control

  [Sec. 203. (a) In order to provide for the control and 
prevention of erosion and sediment damages in the Appalachian 
region and to promote the conservation and development of the 
soil and water resources of the region the Secretary of 
Agriculture is authorized to enter into agreements of not more 
than ten years with landowners, operators, and occupiers, 
individually or collectively, in the Appalachian region 
determined by him to have control for the period of the 
agreement of the lands described therein providing for land 
stabilization, erosion and sediment control, and reclamation 
through changes in land use, and conservation treatment 
including the establishment of practices and measures for the 
conservation and development of soil, water, woodland, 
wildlife, and recreation resources.
  [(b) The landowner, operator, or occupier shall furnish to 
the Secretary of Agriculture a conservation and development 
plan setting forth the appropriate and safe land uses and 
conservation treatment mutually agreed by the Secretary and the 
landowner operator, or occupier to be needed on the lands for 
which the plan was prepared.
  [(c) Such plan shall be incorporated in an agreement under 
which the landowner, operator, or occupier shall agree with the 
Secretary of Agriculture to carry out the land uses and 
conservation treatment provided for in such plan on the lands 
described in the agreement in accordance with the terms and 
conditions thereof.
  [(d) In return for such agreement by the landowner, operator, 
or occupier the Secretary of Agriculture shall be authorized to 
furnish financial and other assistance to such landowner, 
operator, or occupier in such amounts and subject to such 
conditions as the Secretary determines are appropriate and in 
the public interest for the carrying out of the land uses and 
conservation treatment set forth in the agreement: Provided, 
That grants hereunder shall not exceed 80 per centum of the 
costs of carrying out such land uses and conservation treatment 
on fifty acres of land occupied by such owner, operator, or 
occupier.
  [(e) The Secretary of Agriculture may terminate any agreement 
with a landowner, operator, or occupier by mutual agreement if 
the Secretary determines that such termination would be in the 
public interest, and may agree to such modification of 
agreements previously entered into hereunder as he deems 
desirable to carry out the purposes of this section or to 
facilitate the practical administration of the program 
authorized herein.
  [(f) Notwithstanding any other provision of law, the 
Secretary of Agriculture, to the extent he deems it desirable 
to carry out the purposes of this section, may provide in any 
agreement hereunder for (1) preservation for a period not to 
exceed the period covered by the agreement and an equal period 
thereafter of the cropland, crop acreage, and allotment history 
applicable to land covered by the agreement for the purpose of 
any Federal program under which such history is used as a basis 
for an allotment or other limitation on the production of such 
crop; or (2) surrender of any such history and allotments.
  [(g) The Secretary of Agriculture shall be authorized to 
issue such rules and regulations as he determines are necessary 
to carry out the provisions of this section.
  [(h) In carrying out the provisions of this section, the 
Secretary of Agriculture shall utilize the services of the Soil 
Conservation Service, and the State and local committees 
provided for in section 8(b) of the Soil Conservation and 
Domestic Allotment Act (16 U.S.C. 590(b)), and is authorized to 
utilize the facilities, services, and authorities of the 
Commodity Credit Corporation. The Corporation shall not make 
any expenditures to carry out the provisions of this subsection 
unless funds specifically appropriated for such purpose have 
been transferred to it.
  [(i) Not to exceed $19,000,000 of the funds authorized in 
section 401 of this Act for the two-fiscal-year period ending 
June 30, 1969, shall be available to carry out this section.

                   [timber development organizations

  [Sec. 204. (a) In order that the region shall more fully 
benefit from the timber stands that are one of its prime 
assets, the Secretary of Agriculture is authorized to--
          [(1) provide technical assistance in the organization 
        and operation, under State law, of private timber 
        development organizations having as their objective the 
        carrying out of timber development programs to improve 
        timber productivity and quality, and increase returns 
        to landowners through establishment of private 
        nonprofit corporations, which on a self-supporting 
        basis may provide (A) continuity of management, good 
        cutting practices, and marketing services, (B) physical 
        consolidation of small holdings or administrative 
        consolidation for efficient management under long-term 
        agreement, (C) management of forest lands, donated to 
        the timber development organizations for demonstrating 
        good forest management, on a profitable and taxpaying 
        basis, and (D) establishment of a permanent fund for 
        perpetuation of the work of the corporations to be 
        composed of donations, real or personal, for 
        educational purposes.
          [(2) provide not more than one-half of the initial 
        capital requirements of such timber development 
        organizations through loans under the applicable 
        provisions of the Consolidated Farmers Home 
        Administration Act of 1961 (7 U.S.C.1926 et seq.). Such 
loans shall not be used for the construction or acquisition of 
facilities for manufacturing, processing, or marketing forest products, 
or for physical consolidation of small timber holdings authorized by 
(1)(B) above except for the establishment of demonstration units.
  [(b) The Secretary of Agriculture is authorized to provide 
technical assistance, make grants, enter into contracts, or 
otherwise provide funds, first to colleges, universities and 
other institutions of higher education (with priority to land 
grant schools), and thereafter to forest products research 
institutions in the region and other appropriate public and 
private organizations, which schools, institutions and 
organizations have the demonstrated capability to perform such 
research, for Appalachian hardwood products research, including 
investigations, studies, and demonstrations, which will further 
the purposes of this Act. Funds shall be provided only for 
programs and projects which will contribute significantly to 
the development of (1) Appalachian hardwood technology, (2) new 
or improved uses of Appalachian hardwood resources, (3) new or 
improved processes or methods for producing hardwood products, 
or (4) new or improved markets for such products. Funds under 
this section shall be provided solely out of sums specifically 
appropriated for the purpose of carrying out this Act, and 
shall not be taken into account in the allocation or 
distribution of funds pursuant to any other provision of law.
  [(c) Not to exceed $2,000,000 of the funds authorized in 
section 401 of this Act for the two-fiscal-year period ending 
June 30, 1969, shall be available to carry out the purposes of 
subsection (b) of this section.

                        [mining area restoration

  [Sec. 205. (a) In order to further the economic development 
of the region by rehabilitating areas presently damaged by 
deleterious mining practices, the Secretary of the Interior is 
authorized to--
          [(1) make financial contributions to States in the 
        region to seal and fill voids in abandoned coal mines 
        and abandoned oil and gas wells, and to reclaim and 
        rehabilitate lands affected by the strip and surface 
        mining and processing of coal and other minerals, 
        including lands affected by waste piles, in accordance 
        with provisions of the Act of July 15, 1955 (30 U.S.C. 
        571 et seq.), to the extent applicable, without regard 
        to section 2(b) thereof (30 U.S.C. 572(b)) or to any 
        provisions therein limiting assistance to anthracite 
        coal formation, or the Commonwealth of Pennsylvania; to 
        control and abate mine drainage pollution; and for 
        planning or engineering for any such activities. Grants 
        under this paragraph shall be made wholly out of funds 
        specifically appropriated for the purposes of carrying 
        out this Act.
          [(2) plan and execute projects for planning, 
        engineering, or extinguishing underground and outcrop 
        mine fires in the region or to make grants to the 
        States for carrying out such projects, in accordance 
        with the applicable provisions of the Act of August 31, 
        1954 (30 U.S.C. 551 et seq.), without regard to any 
        provisions therein relating to annual appropriation 
        authorization ceilings. Grants under this paragraph 
        shall be made solely out of funds specifically 
        appropriated for the purpose of carrying out this Act.
  [(b) Notwithstanding any other provision of law, the Federal 
share of mining area restoration project costs carried out 
under subsection (a) of this section and conducted on lands 
other than federally owned lands shall not exceed 75 per centum 
of the total cost thereof. For the purposes of this section, 
such project costs may include the reasonable value (including 
donations), of planning, engineering, real property acquisition 
(limited to the reasonable value of the real property in its 
unreclaimed state and costs incidental to its acquisition, as 
determined by the Commission), and such other materials 
(including, but not limited to, sand, clay, stone, culm, rock, 
spoil bank and noncombustible materials) and services as may be 
required for such project.
  [(c) Whenever a State, local government, or other nonprofit 
applicant agrees to indemnify the Federal Government, or its 
officers, agents, or employees, for all claims of loss or 
damage resulting from the use and occupation of lands for a 
project assisted under this section, the Secretary may waive 
all requirements for the submission of releases, consents, 
waivers, or similar instruments respecting such lands, but the 
Secretary may require security as he deems appropriate for any 
such indemnification agreement.
  [(d) No moneys authorized by this Act shall be expended for 
the purpose of reclaiming, improving, grading, seeding, or 
reforestation of strip-mined areas, except on lands owned by 
Federal, State, or local government bodies or by private 
nonprofit entities organized under State law to be used for 
public recreation, conservation, community facilities, or 
public housing.

                         [water resource survey

  [Sec. 206. (a) The Secretary of the Army is hereby authorized 
and directed to prepare a comprehensive plan for the 
development and efficient utilization of the water and related 
resources of the Appalachian region, giving special attention 
to the need for an increase in the production of economic goods 
and services within the region as a means of expanding economic 
opportunities and thus enhancing the welfare of its people, 
which plan shall constitute an integral and harmonious 
component of the regional economic development program 
authorized by this Act.
  [(b) This plan may recommend measures for the control of 
floods, the regulation of the rivers to enhance their value as 
sources of water supply for industrial and municipal 
development, the generation of hydroelectric power, the 
prevention of water pollution by drainage from mines, the 
development and enhancement of the recreational potentials of 
the region, the improvement of the rivers for navigation where 
this would further industrial development at less cost than 
would the improvement of other modes of transportation, the 
conservation and efficient utilization of the land resource, 
and such other measures as may be found necessary to achieve 
the objectives of this section.
  [(c) To insure that the plan prepared by the Secretary of the 
Army shall constitute a harmonious component of the regional 
program, he shall consult with the Commission and the 
following: the Secretary of Agriculture, the Secretary of 
Commerce, the Secretaryof Health, Education, and Welfare, the 
Secretary of the Interior, Secretary of Transportation, the Tennessee 
Valley Authority, and the Federal Power Commission.
  [(d) The plan prepared pursuant to this section shall be 
submitted to the Commission. The Commission shall submit the 
plan to the President with a statement of its views, and the 
President shall submit the plan to the Congress with his 
recommendations not later than December 31, 1968.
  [(e) The Federal agencies referred to in subsection (c) of 
this section are hereby authorized to assist the Secretary of 
the Army in the preparation of the plan authorized by this 
section, and the Secretary of the Army is authorized to enter 
into and perform such contracts, leases, cooperative 
agreements, or other transactions as may be necessary to the 
preparation of this plan and on such terms as he may deem 
appropriate, with any department, agency, or instrumentality of 
the United States or with any State, or any political 
subdivision, agency, or instrumentality thereof, or with any 
person, firm, association, or corporation.
  [(f) The plan to be prepared by the Secretary of the Army 
pursuant to this section shall also be coordinated with all 
comprehensive river basin plans heretofore or hereafter 
developed by United States study commissions, interagency 
committees, or similar planning bodies, for those river systems 
draining the Appalachian region.
  [(g) Not to exceed $2,000,000 of the funds authorized in 
section 401 of this Act for the two-fiscal-year period ending 
June 30, 1969, shall be available to carry out this section.]

assistance for planning and other preliminary expenses of proposed low- 
                  and moderate-income housing projects

  Sec. 207. (a) * * *
  (b) No loan under subsection (a) of this section shall exceed 
[80 per centum] 50 percent (or 80 percent in the case of a 
project to be carried out in a county for which a distressed 
county designation is in effect under section 226) of the cost 
of planning and obtaining financing for a project, including, 
but not limited to, preliminary surveys and analyses of market 
needs, preliminary site engineering and architectural fees, 
site options, applications and mortgage commitment fees, legal 
fees, and construction loan fees and discounts. Such loans 
shall be made without interest, except that any loan made to an 
organization established for profit shall bear interest at the 
prevailing market rate authorized for an insured or guaranteed 
loan for such project. The Secretary shall require payments of 
loans made under this section, under such terms and conditions 
as he may require, upon completion of the project or sooner, 
and except in the case of a loan to an organization established 
for profit, may cancel any part or all of such a loan, if he 
determines that a permanent loan to finance such project cannot 
be obtained in an amount adequate for repayment of such loan 
under this section.
  (c)(1) Except as provided in paragraph (2) of this 
subsection, no grant under this section shall exceed [80 per 
centum] 50 percent (or 80 percent in the case of a project to 
be carried out in a county for which a distressed county 
designation is in effect under section 226) of those expenses, 
incident to planning and obtaining financing for a project, 
which the Secretary considers not to be recoverable from the 
proceeds of any permanent loan made to finance such project, 
and no such grant shall, be made to an organization established 
for profit.

           *       *       *       *       *       *       *


                [appalachian airport safety improvements

  [Sec. 208. (a) In order to provide a system of airports in 
the Appalachian region which can accommodate a greater number 
of passengers in safety and thereby increase commerce and 
communication in areas with developmental potential, the 
Secretary of Transportation (hereafter in this section referred 
to as the ``Secretary'') is authorized to make grants to 
existing airports for the purpose of enhancing the safety of 
aviation and airport operations.
  [(b) Such airport safety improvement projects may include (A) 
approach clearance, the removal, lowering, relocation, and 
marking and lighting of airport hazards, navigation aids, site 
preparation for navigation aids, and the acquisition of 
adequate safety equipment (including firefighting and rescue 
equipment), and (B) any acquisition of land or of any interest 
therein, or of any easement through or other interest in 
airspace which is necessary for such projects or to remove or 
mitigate or prevent or limit the establishment of, airport 
hazards.
  [(c) Grants under this section shall be made solely from 
funds specifically made available to the President for the 
purpose of carrying out this Act in accordance with the 
provisions of this Act, and shall not be taken into account in 
the computation of the allotments among the States made 
pursuant to any other provisions of law.
  [(d) Except as context otherwise indicates, words and phrases 
used in this section shall have the same meaning as in the 
Airport and Airways Development Act of 1970 and the Federal 
Aviation Act of 1958, as amended.
  [(e) Federal assistance to any project under this section 
shall not exceed 90 per centum of the costs of the project, 
except for assistance for navigation aids which may be 100 per 
centum.
  [(f) The Secretary is authorized to incur obligations to make 
grants for airport safety improvement projects, in a total 
amount not to exceed $40,000,000 during the period ending June 
30, 1975. There are authorized to be appropriated to the 
President such sums as may be required for liquidation of the 
obligations incurred under this section.]

           *       *       *       *       *       *       *


    Part B--Supplementations and Modifications of Existing Programs

vocational education facilities and vocational and technical education 
                         demonstration projects

  Sec. 211. (a) * * *
  (b)(1) * * *

           *       *       *       *       *       *       *

  (3) Grants under this section for operation of components of 
education demonstration projects, whether or not constructed by 
funds authorized by this Act, may be made for up to [100 per 
centum of the costs thereof for the two-year period beginning 
on the first day that such component is in opertion as a part 
of the project. For the next three years of operation, such 
grants shall not exceed 75 per centum of such costs.] 50 
percent of the costs thereof (or 80 percent of such costs in 
the case of a project to be carried out in a county for which a 
distressed county designation is in effect under section 226). 
No grants for operation of education demonstration projects 
shall be made after five years following the commencement of 
the initial grant for operation of the project. Notwithstanding 
section 104 of the Public Works and Economic Development Act of 
1965 (42 U.S.C. 3134), an education-related facility 
constructed under title I of that Act may be a component of an 
education demonstration project eligible for operating grant 
assistance under this section.
  (c) Maximum Commission Contribution After September 30, 
1998.--After September 30, 1998, not more than 50 percent of 
any project cost eligible for financial assistance under this 
section may be provided from funds appropriated to carry out 
this Act; except that such maximum Commission contribution may 
be increased to 80 percent, or to the percentage of the maximum 
Federal contribution authorized by this section, whichever is 
less, for a project to be carried out in a county for which a 
distressed county designation is in effect under section 226.

                        [sewage treatment works

  [Sec. 212. (a) In order to provide facilities to assist in 
the prevention of pollution of the region's streams and to 
protect the health and welfare of its citizens, the Secretary 
of Health, Education, and Welfare is authorized to make grants 
for the construction of sewage treatment works in accordance 
with the provisions of the Federal Water Pollution Control Act 
(33 U.S.C. 466 et seq.), without regard to any provisions 
therein relating to appropriation authorization ceilings or to 
allotments among the States. Grants under this section shall be 
made solely out of funds specifically appropriated for the 
purpose of carrying out this Act, and shall not be taken into 
account in the computation of the allotments among the States 
pursuant to any other provision of law.
  [(b) Not to exceed $6,000,000 of the funds authorized in 
section 401 of this Act for the two-fiscal-year period ending 
June 30, 1969, shall be available to carry out this section.

                   [amendments to housing act of 1954

  [Sec. 213. (a) Section 701(a) of the Housing Act of 1954 (40 
U.S.C. 461(a)) is amended by striking out ``and'' at the end of 
clause (8) and all of clause (9) and inserting in lieu thereof 
the following:
          [``(9) the Appalachian Regional Commission, for 
        comprehensive planning for the Appalachian region as 
        defined by section 403 of the Appalachian Regional 
        Development Act of 1965; and
          [``(10) local development districts, certified under 
        section 301 of the Appalachian Regional Development Act 
        of 1965, for comprehensive planning for their entire 
        areas, or for metropolitan planning, urban planning, 
        county planning, or small municipality planning within 
        such areas in the Appalachian region, and for planning 
        for Appalachian regional programs.''
  [(b) The proviso of the first sentence of section 701(b) of 
the Housing Act of 1954 is amended by inserting after 
``States'' the words ``and local development districts.'']

              supplements to federal grant-in-aid programs

  Sec. 214. (a) In order to enable the people, States, and 
local communities of the region, including local development 
districts, to take maximum advantage of Federal grant-in-aid 
programs (as hereinafter defined) for which they are eligible 
but for which, because of their economic situation, they cannot 
supply the required matching share, or for which there are 
insufficient funds available under the Federal grant-in-aid Act 
authorizing such programs to meet pressing needs of the region, 
[the President is authorized to provide funds to the Federal 
Cochairman to be used] the Federal Cochairman may use amounts 
made available to carry out this section for all or any portion 
of the basic Federal contribution to projects or activities 
(hereinafter referred to as projects) under such Federal grant-
in-aid programs authorized by Federal grant-in-aid Acts, and 
for the purpose of increasing the Federal contribution to 
projects under such programs, as hereafter defined, above the 
fixed maximum portion of the cost of such projects otherwise 
authorized by the applicable law. In the case of any program or 
project for which all or any portion of the basic Federal 
contribution to the project under a Federal grant-in-aid 
program is proposed to be made under this subsection, no such 
Federal contribution shall be made until the responsible 
Federal official administering the Federal grant-in-aid Act 
authorizing such contribution certifies that such program or 
project meets the applicable requirements of such Federal 
grant-in-aid Act and could be approved for Federal contribution 
under such Act if funds were available under such Act for such 
program or project. Funds may be provided for programs and 
projects in a State under this subsection only if the 
Commission determines that the level of Federal and State 
financial assistance under Acts other than this Act, for the 
same type of programs or projects in that portion of the State 
within the region, will not be diminished in order to 
substitute funds authorized by this subsection. Funds provided 
pursuant to this Act shall be available without regard to any 
limitations on areas eligible for assistance or authorizations 
for appropriation in any other Act. Any findings, report, 
certification, or documentation required to be submitted to the 
head of the department, agency, or instrumentality of the 
Federal Government responsible for the administration of any 
Federal grant-in-aid program shall be accepted by the Federal 
Cochairman with respect to a supplemental grant for any project 
under such program.
  (b)(1) The Federal portion of such costs shall not be 
increased in excess of the percentage established by the 
Commission, and shall in no event exceed 80 per centum thereof.
  (2) After September 30, 1998, not more than 50 percent of any 
project cost eligible for financial assistance under this 
section may be provided from funds appropriated to carry out 
this Act; except that such maximum Commission contribution may 
be increased to 80 percent for a project to be carried out in a 
county for which a distressed county designation is in effect 
under section 226.
  (c) The term ``Federal grant-in-aid programs'' as used in 
this section means those Federal grant-in-aid programs 
authorized [on or before December 31, 1980,] by this Act and 
Acts other than this Act for the acquisition or development of 
land, the construction or equipment of facilities, or other 
community or economic development or economic adjustment 
activities, including but not limited to grant-in-aid progams 
authorized by the following Acts: Federal Water Pollution 
Control Act; Watershed Protection and Flood Prevention Act; 
titles VI and XVI of the Public Helath Services Act; Vocational 
Education Act of 1963; Federal Airport Act; Airport and Airway 
Development Act of 1970; part IV of title III of the 
Communications Act of 1934; title VI (part A) and VII of the 
Higher Education Act of 1965; Land and Water Conservation Fund 
Act of 1965; National Defense Education Act of 1958; 
Consolidated Farm and Rural Development Act; titles I and IX of 
the Public Works and Economic Development Act of 1965; the 
housing repair program for homeowners authorized by section 
1319 of title 42, United States Code; grants under the Indian 
Health Service Act (42 Stat. 208); and title I of the Housing 
and Community Development Act of 1974. The term shall not 
include (A) the program for the construction of the development 
highway system authorized by section 201 of this Act or any 
program relating to highway or road construction authorized by 
title 23, United States Code, or (B) any other program for 
which loans or other Federal financial assistance, except a 
grant-in-aid program, is authorized by this or any other Act. 
For the purpose of this section, any sewage treatment works 
constructed pursuant to section 8(c) of the Federal Water 
Pollution Control Act without Federal grant-in-aid assistance 
under such section shall be regarded as if constructed with 
such assistance.

           *       *       *       *       *       *       *


Part C--General Provisions

           *       *       *       *       *       *       *


                      program development criteria

  Sec. 224. (a) In considering programs and projects to be 
given assistance under this Act, and in establishing a priority 
ranking of the requests for assistance presented to the 
Commission, the Commission shall follow procedures that will 
insure consideration of the following factors:
          (1) the relationship of the project or class of 
        projects to overall regional development including its 
        location in an area determined by the State to have a 
        significant potential for growth or in a severely and 
        persistently distressed county or area;

           *       *       *       *       *       *       *

          (5) the prospects that the project for which 
        assistance is sought will improve, on a continuing 
        rather that a temporary basis, the opportunities for 
        employment, the average level of income, or the 
        economic and social development of the area served by 
        the project[.]; and
          (6) the extent to which the project design provides 
        for detailed outcome measurements by which grant 
        expenditures may be evaluated.
  [(b) No financial assistance shall be authorized under this 
Act to be used (1) to assist establishments relocating from one 
area to another; (2) to finance the cost of industrial plants, 
commercial facilities, machinery, working capital, or other 
industrial facilities or to enable plant subcontractors to 
undertake work theretofore performed in another area by other 
subcontractors or contractors; (3) to finance the cost of 
facilities for the generation, transmission, or distribution of 
electric energy; or (4) to finance the cost of facilities for 
the production, transmission, or distribution of gas (natural, 
manufactured, or mixed).]
  (b) Limitation.--Financial assistance made available under 
this Act may not be used to assist establishments relocating 
from one area to another.

           *       *       *       *       *       *       *


SEC. 226. DISTRESSED AND ECONOMICALLY STRONG COUNTIES.

  (a) Designations.--Not later than 90 days after the date of 
enactment of this section, and annually thereafter, the 
Commission, in accordance with such criteria as the Commission 
may establish, shall--
          (1) designate as ``distressed counties'' those 
        counties in the region that are the most severely and 
        persistently distressed; and
          (2) designate two categories of economically strong 
        counties, as follows:
                  (A) ``competitive counties'' which shall be 
                those counties in the region which are 
                approaching economic parity with the rest of 
                the Nation; and
                  (B) ``attainment counties'' which shall be 
                those counties in the region which have 
                attained or exceeded economic parity with the 
                rest of the Nation.
  (b) Distressed Counties.--In program and project development 
and implementation and in the allocation of appropriations made 
available to carry out this Act, the Commission shall give 
special consideration to the needs of those counties for which 
a distressed designation is in effect under this section.
  (c) Funding Prohibition for Projects Located in Economically 
Strong Counties.--
          (1) Competitive counties.--Except as provided by 
        paragraphs (3) and (4), assistance under this Act shall 
        be limited to no more than 30 percent of project cost 
        for a project located in a county for which a 
        competitive county designation is in effect under this 
        section.
          (2) Attainment counties.--Except as provided by 
        paragraphs (3) and (4), no funds may be provided under 
        this Act for a project located in a county for which an 
        attainment county designation is in effect under this 
        section.
          (3) Exceptions.--The prohibitions established by 
        paragraphs (1) and (2) shall not apply to--
                  (A) projects on the Appalachian development 
                highway system authorized by section 201;
                  (B) local development district administrative 
                projects authorized by section 302(a)(1); or
                  (C) a multicounty project that includes a 
                county or counties designated as 
                ``competitive'' or ``attainment'' under this 
                section provided all participating counties 
                share in the costs and benefits of the project.
          (4) Waiver.--The prohibitions established by 
        paragraphs (1) and (2) may be waived by the Commission 
        for a particular project upon a showing of one or more 
        of the following:
                  (A) The existence of a significant pocket of 
                distress in the part of the county in which the 
                project is located.
                  (B) A significant decline in economic 
                conditions affecting the county which is not 
                reflected in current designation data.
                  (C) The existence of a significant potential 
                benefit from the project in areas of the region 
                outside the designated county.

TITLE III--ADMINISTRATION

           *       *       *       *       *       *       *


 grants for administration expenses of local development districts and 
                for research and demonstration projects

  Sec. 302. (a) [The President] The Commission is authorized--
          (1) to make grants [to the Commission] for 
        administrative expenses, including the development of 
        areawide plans or action programs and technical 
        assistance activities, of local development districts, 
        but (A) the amount of any such grant shall not exceed 
        [75 per centum] 50 percent of such expenses, (B) no 
        grants for administrative expenses shall be made for a 
        State agency certified as a local development district 
        for a period in excess of three years beginning on the 
        date the initial grant is made for such development 
        district, and (C) the local development district 
        contributions for administrative expenses may be in 
        cash or in kind, fairly evaluated, including but not 
        limited to space, equipment, and services;
          (2) to make grants [to the Commission] for assistance 
        to States for a period not in excess of two years to 
        strengthen the State development planning process for 
        the region and the coordination of State planning under 
        this Act, the Public Works and Economic Development Act 
        of 1965, as amended, and other Federal and State 
        programs; and
          (3) to make grants [to the Commission] for 
        investigation, research, studies, evaluations, and 
        assessments of needs, potentials, or attainment of the 
        people of the region, technical assistance, training 
        programs, demonstrations, and the construction of 
        necessary facilities incident to such activities, which 
        will further the purposes of this Act. Grant funds may 
        be provided entirely from appropriations to carry out 
        this section or in combination with funds available 
        under other Federal or Federal grant-in-aid programs or 
        from any other source. Notwithstanding any provision of 
        law limiting the Federal share in any such other 
        program, funds appropriated to carry out this section 
        may be used to increase such Federal share, as the 
        Commission determines appropriate.
After September 30, 1998, not more than 50 percent of the cost 
of any activity eligible for financial assistance under this 
section may be provided from funds appropriated to carry out 
this Act (or 80 percent of such costs in the case of a project 
to be carried out in a county for which a distressed county 
designation is in effect under section 226); except that 
discretionary grants by the Commission to implement significant 
regional initiatives, to take advantage of special development 
opportunities, or to respond to emergency economic distress in 
the region may be made without regard to such percentage 
limitations. The aggregate amount of discretionary grants 
referred to in the preceding sentence in any fiscal year shall 
not exceed 10 percent of the amounts appropriated under section 
401 for such fiscal year.
  (b)(1) * * *

           *       *       *       *       *       *       *

  [(3) The Commission shall conduct a study and report on the 
status of Appalachian migrants in the destinations to which 
they have migrated, current migration patterns and 
implications, and the impact which the Commission program has 
had, and the potential for such impact, on out-migration and 
the welfare of Appalachian migrants. The Commission is 
authorized to conduct pilot projects and demonstrations within 
the region in connection with such study.
  [(4) The Commission shall conduct a study of physical hazards 
which are constraints on land use in the Appalachian region 
(with emphasis on mudslides, landslides, sink holes, and 
subsidence) and the risks associated with such hazards. To the 
extent practicable, such study shall identify high-risk hazard 
areas throughout the Appalachian region. The Commission shall 
submit its report on such study, together with recommendations 
for means to remove or avoid such constraints on land use, to 
the Congress not later than twenty-four months after the 
enactment of this paragraph.]

           *       *       *       *       *       *       *

  [(d) Not to exceed $11,000,000 of the funds authorized in 
section 401 of this Act for the two-fiscal-year period ending 
June 30, 1969, shall be available to carry out this section. 
Not to exceed $3,000,000 of such authorization shall be 
available for the purpose of subsection (b).
  [(e) No part of any appropriated funds may be expended 
pursuant to authorization given by this Act involving any 
scientific or technological research for development activity 
unless such expenditure is conditioned upon provisions 
effective to insure that all information, copyrights, uses, 
processes, patents, and other developments resulting from that 
activity will be made freely available to the general public. 
Nothing contained in this subsection shall deprivethe owner of 
any background patent relating to any such activity, without his 
consent, of any right which that owner may have under that patent. 
Whenever any information, copyright, use, process, patents, and other 
development resulting from any such research or development activity 
conducted in whole or in part with appropriated funds expended under 
authorization of this Act is withheld or disposed of by any person, 
organization, or agency in contravention of the provisions of this 
subsection, the Attorney General shall institute, upon his own motion 
or upon request made by any person having knowledge of pertinent facts, 
an action for the enforcement of the provisions of this subsection in 
the district court of the United States for any judicial district in 
which any defendant resides, is found, or has a place of business. Such 
court shall have jurisdiction to hear and determine such action, and to 
enter therein such orders and decrees as it shall determine to be 
required to carry into effect fully the provisions of this subsection. 
Process of the district court for any judicial district in any action 
instituted under this subsection may be served in any other judicial 
district of the United States by the United States marshal thereof. 
Whenever it appears to the court in which any such action is pending 
that other parties should be brought before the court in such action, 
the court may cause such other parties to be summoned from any judicial 
district of the United States.]

           *       *       *       *       *       *       *


         TITLE IV--APPROPRIATIONS AND MISCELLANEOUS PROVISIONS

                    [authorization of appropriations

  [Sec. 401. In addition to the appropriations authorized in 
section 105 for administrative expenses, in section 201 for the 
Appalachian Development Highway System and Local Access Roads, 
and in section 208 for Appalachian Airport Safety Improvements, 
there is hereby authorized, to be appropriated to the 
President, to be available until expended, to carry out this 
Act, $268,500,000 for the two-fiscal year period ending June 
30, 1971; $282,000,000 for the two-fiscal year period ending 
June 30, 1973; and $294,000,000 for the two-fiscal year period 
ending June 30, 1975. In addition to the appropriations 
authorized in section 105 for administrative expenses, and in 
section 201(g) for the Appalachian development highway system 
and local access roads, there is authorized to be appropriated 
to the President, to be available until expended, to carry out 
this Act, $340,000,000 for the period beginning July 1, 1975, 
and ending September 30, 1977, and $300,000,000 for the two-
fiscal year period ending September 30, 1979, and $300,000,000 
for the two-fiscal-year period ending September 30, 1981, and 
$50,000,000 for the fiscal year period ending September 30, 
1982. No part of the sums authorized in this section for the 
fiscal year ending September 30, 1982, shall be obligated for 
any project unless such project was undertaken with funds 
obligated in a previous fiscal year or is a capital project 
which was originally approved for funding in fiscal year 1981 
and can be started and completed with funds authorized for 
fiscal year 1982. No part of the sums authorized in this 
section for the fiscal year ending September 30, 1982, shall be 
obligated for any project unless such project was undertaken 
with funds obligated in a previous fiscal year or is a capital 
project which was originally approved for funding in fiscal 
year 1981 and can be started and completed with funds 
authorized for fiscal year 1982.]

SEC. 401. AUTHORIZATION OF APPROPRIATIONS.

  In addition to amounts authorized by section 201 and amounts 
made available for the Appalachian development highway system 
program, there are authorized to be appropriated to the 
Commission to carry out this Act--
          (1) $67,000,000 for fiscal year 1999;
          (2) $72,000,000 for fiscal year 2000;
          (3) $75,000,000 for fiscal year 2001;
          (4) $75,000,000 for fiscal year 2002; and
          (5) $80,000,000 for fiscal year 2003.
Such sums shall remain available until expended.

           *       *       *       *       *       *       *


                              termination

  Sec. 405. This Act, other than sections 201 and 403, shall 
cease to be in effect on October 1, [1982] 2003.

                           SUPPLEMENTAL VIEWS

          If this committee makes the case that EDA is a 
        program that pays its own way, that has in fact 
        contributed to national and particularly to local and 
        regional economic growth, that the Government in fact 
        does get a fair return on its investment, not only 
        socially but economically and fiscally as well, and if 
        this committee does its job of more narrowly focusing 
        and targeting the EDA and its associated programs, will 
        you and will this administration reconsider your 
        position? \1\
---------------------------------------------------------------------------
    \1\ Overview and assessment of economic and regional development 
programs under the jurisdiction of the Subcommittee on Economic 
Development; hearings before the Subcomm. on Economic Development of 
the House Comm. on Public Works and Infrastructure, 97th Cong. 15 
(1981).

    In 1981, as Chairman of the Subcommittee on Economic 
Development, I asked that question of David Stockman, Director 
of the Office of Management and Budget in the Reagan 
Administration, at our hearings on reauthorization of the 
Economic Development Administration (EDA) and Appalachian 
Regional Commission (ARC). While the Administration's reaction 
was to stand pat, the House of Representatives answered with a 
resounding affirmative vote for both EDA and the ARC.
    When we bring the pending bill to the floor, we will again 
be asking that question of the House. The answer is just as 
resoundingly clear and just as bipartisan today as it was then. 
I strongly support H.R. 4275, the Economic Development 
Partnership Act of 1998, and, in fact, we do have a yardstick 
of measurement: during consideration of the Commerce, Justice, 
State appropriations bill on August 4, the House rejected by a 
vote of 327-91 an amendment to cut EDA funds and use the monies 
for other purposes.
    Moreover, the record established in extensive hearings of 
this Subcommittee demonstrates clearly and convincingly that 
EDA and the ARC meet and exceed the standards raised in my 
question.
    In 1965, Congress established the Economic Development 
Administration and Appalachian Regional Commission. Since that 
time, I have watched--both in my capacity as Administrator of 
the then-Committee on Public Works and as a Member of Congress 
for 23 years with service as Chairman and as a Member of the 
Public Buildings and Economic Development Subcommittee and its 
predecessor, the Subcommittee on Economic Development--these 
agencies foster economic growth and create economic opportunity 
in our Nation's most distressed communities for more than three 
decades. This Subcommittee directly oversees EDA and the ARC 
and has extensively documented the success of these programs.
    I take this opportunity to highlight some of the findings 
of the Subcommittee and independent researchers with regard to 
these economic development programs. I will focus my discussion 
on EDA because several recent studies have evaluated that 
agency's performance.

      the first 15 years: findings of the 97th and 98th congresses

    In the 97th and 98th Congresses, I served as Chairman of 
the Subcommittee on Economic Development which held almost 
thirty days of hearings beginning in 1981 to evaluate the 
economic development programs of the EDA and ARC. Particular 
tribute to the success of those hearings must go to my 
partnership with then-Congressman Bill Clinger (R.-Pa.). 
Congressman (and former EDA Chief Counsel) Clinger and I worked 
together to evaluate the agencies and craft the legislation 
later reported by the Committee. As part of its FY 1981 budget 
submission, the Reagan Administration proposed to terminate 
both agencies. The Subcommittee reviewed the track record of 
both agencies and found that they contributed significantly to 
the overall economic growth of the Nation, particularly its 
economically distressed communities.
    The Subcommittee's report found that EDA and ARC were able 
to convert their modest nascent funds into a significant 
economic return of employment opportunities, private capital, 
and tax revenues. During its first 15 years, EDA, with a seed 
investment of $4.7 billion in Federal funds, helped distressed 
communities produce 1.4 million private sector jobs; leverage 
$9 billion in private capital; and facilitate $6.5 billion in 
Federal, State, and local tax dollars. EDA projects returned 
more in taxes each year than were invested in the program in 
its entire 15-year history.\2\ Similarly, the Appalachian 
Regional Commission generated 1.5 million jobs in its first 15 
years.\3\
---------------------------------------------------------------------------
    \2\ Hearing Report on Economic and Regional Development Programs 
Under the Jurisdiction of the Subcommittee on Economic Development of 
the Committee on Public Works and Transportation, H.R. Doc. No. 97-3 at 
3 (1981).
    \3\ Id.
---------------------------------------------------------------------------
    The Subcommittee also found that the total cost of creating 
an EDA public works job was about $22,000 per job: $3,800 in 
EDA funds and $2,200 in other public funds which together 
leveraged $16,000 to $18,000 in private monies.\4\
---------------------------------------------------------------------------
    \4\ The Subcommittee report cites a study by Abt Associates Inc. 
and other witnesses for these estimates. In addition to the Abt Study, 
a General Accounting Office study estimated that an industrial park-
related job costs about $1,500. Id. at 9-10.
---------------------------------------------------------------------------
    Moreover, the Subcommittee report highlighted EDA's ability 
to positively impact both community and business development in 
economically distressed communities.\5\ Communities such as 
Scioto County, Ohio exemplified the EDA's power to transform an 
area through economic assistance. Before the EDA grant, Scioto 
County was a distressed area. After an EDA Title IX grant, more 
than 27 firms expanded into the area resulting in the retention 
of 714 existing jobs, the generation of 1,370 new jobs, and the 
investment of more than $270 million of private resources.\6\ 
The Subcommittee's hearings showed that EDA investments 
produced similar dramatic impacts in distressed areas such as 
Jamestown, New York; Duluth, Minnesota; Pine Bluff, Arkansas; 
San Benito, Texas; Oakland, California; Baltimore, Maryland; 
and Washington, D.C.\7\
---------------------------------------------------------------------------
    \5\ See id. at 9.
    \6\ Id. at 10-11.
    \7\ Witnesses from these distressed areas testified at these 
hearings that their communities would have continued ``their downward 
spiral'' if not for EDA money directly invested in their communities. 
Id. at 9.
---------------------------------------------------------------------------

         33 years and counting: findings of the 105th congress

    Today, more than seventeen years since I chaired the 
Economic Development Subcommittee's examination of EDA and the 
ARC, these agencies are still an integral element of distressed 
areas' efforts to rebuild their communities. Moreover, the 
Subcommittee continues to document the success of these 
agencies.
    In 1997, the House Subcommittee on Public Buildings and 
Economic Development, under the leadership of Chairman Jay Kim 
and Ranking Democratic Member Jim Traficant, held hearings to 
consider the reauthorization of EDA and the ARC.\8\ At the 
hearings, Dr. Richard W. Burchell, Ph.D. of the Rutgers 
University Center for Urban Policy Research, testified before 
the Subcommittee on behalf of a consortium of universities on 
the consortium's comprehensive study evaluating the success of 
EDA's public works program.\9\
---------------------------------------------------------------------------
    \8\ See Reauthorization of the Economic Development Administration 
and the Appalachian Regional Commission; Hearings Before the Subcomm. 
on Pubic Buildings and Economic Development of the House Comm. on 
Transportation and Infrastructure, 105th Cong. 1 (1997) [hereinafter 
Hearings 1997].
    \9\ The study was conducted by Rutgers, the New Jersey Institute of 
Technology, Columbia University, the National Association of Regional 
Councils, Princeton University, and the University of Cincinnati. Id. 
at 72.
---------------------------------------------------------------------------
Public Works Program
    That study documents EDA's success in promoting the long-
term economic recovery of distressed areas.\10\ One of the 
purposes of the public works program is to stimulate the 
development of infrastructure in communities, particularly 
rural areas and cities, stymied in their economic growth. A 
prime indicator of a community's economic health is the extent 
of its infrastructure development as a draw to business and 
industry. At the hearings, Dr. Burchell testified that if it 
were not for the EDA public works funding, these distressed 
communities would never have been able to initiate these 
infrastructure development projects.\11\
---------------------------------------------------------------------------
    \10\ See Public Works Program Performance Evaluation; Final Report 
3-4 (Rutgers University, Center for Urban Policy ed., 1997) 
[hereinafter Public Works Evaluation].
    \11\ Dr. Burchell testified that EDA funding was critical to 
infrastructure development:

      In relatively isolated rural situations, turnarounds might 
      never occur without EDA's early entrance decisions. In 
      urban circumstances, without EDA's timely involvement, 
      neighboring economic forces could negatively impact the 
      possible future of a project. Thus, given either the 
      absence of local resources, or the inability of the public 
      or private capital market in an area to generate the 
      funding necessary to get a project off the ground, 
      infrastructure projects often would not be built absent EDA 
      funding. Hearings 1997, supra note 8, at 176 (prepared 
      statement by Dr. Robert W. Burchell, Ph.D.).
    The study evaluated all 203 EDA public works projects 
completed in FY 1990.\12\ These projects were carried out in 
areas where unemployment and the population below the poverty 
level are 40 percent higher than the state and national 
averages. These are also areas where per capita income is 
typically 40 percent lower than state and national 
averages.\13\ The study found that 91% of the 203 projects were 
completed on-time and 52% of these projects were completed 
under budget.\14\
---------------------------------------------------------------------------
    \12\ Of the 205 initial projects, 203 projects (99%) were 
completed. Two projects were aborted because of local financial or 
market reasons. Id. at 174. The project breakdown consisted of water/
sewer (42.8%); industrial parks (29.1%); buildings (13.3%); roads 
(8.4%); and marine/tourism projects (6.4%). Public Works Evaluation, 
supra note 10, at 3.
    \13\ Hearings, supra note 8, at 179.
    \14\ Id. at 181.
---------------------------------------------------------------------------
    Moreover, the study's statistical findings concerning the 
public works program's job creation are compelling indicators 
of EDA's success. Six years after completion, 96 percent of the 
projects produced permanent jobs. On average, for every $1 
million of EDA funding, each public works period produced 327 
permanent jobs.\15\
---------------------------------------------------------------------------
    \15\ Id. at 183.
---------------------------------------------------------------------------
    In terms of EDA funding, the cost of this economic 
development was minimal while the impact on private-sector an 
government investment proved to be great. On average, EDA 
created or retained jobs at a cost of $3,058 per job.\16\ In 
addition, EDA funding leveraged private-sector and other 
government investment. For every $1 million of EDA funding, 
another $1 million was leveraged in federal, state, or local 
investment.\17\ EDA funding also leveraged private-sector 
investment in the overwhelming majority (84%) of projects. For 
every $1 million of EDA funding, $10.08 million was leveraged 
in private-sector investment.\18\ These investments are 
private-sector investments that but for the EDA funds would not 
have been invested.
---------------------------------------------------------------------------
    \16\ Id. at 184.
    \17\ Id.
    \18\ This statistic does not include public projects. Id. at 184.
---------------------------------------------------------------------------
    The study also found that the economic impact of the public 
works program extended far beyond the recipients themselves to 
positively affect public and private economic growth at large. 
Thirty percent of all public works projects generated 
nonproject-related jobs while 35 percent produced indirect 
jobs.\19\ These statistics translate into the generation of an 
additional 50 jobs and $1.18 million in private sector 
investment in nonproject-related direct effects, and an 
additional 64 jobs and $126,180 in indirect effects for every 
$1 million of EDA funding.\20\
---------------------------------------------------------------------------
    \19\ For purposes of this study, indirect jobs are those jobs that 
occur because of the project or the project's jobs. Id. at 185.
    \20\ Id. at 185-6
---------------------------------------------------------------------------
    Finally, EDA public works projects have a significant 
impact on the local tax base. For every $1 million of EDA 
funding, the local tax base increased by $10.13 million from 
additional private-sector and other investments.\21\
---------------------------------------------------------------------------
    \21\ Id. at 187.
---------------------------------------------------------------------------
    The study confirms what the Subcommittee has found and I 
have known for many years: EDA's public works program is a 
resounding success.

Defense Adjustment Program

    Since 1987, approximately 2.5 million defense-dependent 
jobs have been lost because of defense downsizing EDA created 
the defense adjustment program to specifically help diversify 
the economies of communities impacted by military base closures 
and defense downsizing. The same consortium of universities 
that conducted the public works study also recently evaluated 
EDA's defense adjustment program and made their findings 
available to the Committee. The Burchell defense study 
evaluated all 190 EDA defense adjustment grants approved 
between FY1992 and FY1995.\22\
---------------------------------------------------------------------------
    \22\ Defense adjustment program; Performance Evaluation 3-4 
(Rutgers University Center for Urban Policy Research, ed. 1997).
---------------------------------------------------------------------------
    EDA's defense adjustment program is a direct response to 
the sudden and severe impacts of military base closures and 
defense contractor cutbacks. According to the study, these 
projects were carried out in distressed areas where minority 
populations and the popublation below the poverty level are 20 
percent higher than state and national averages. These areas 
also have an average per capita income that is 25 percent lower 
than state and national averages.\23\ The study found that 99 
percent of the projects commenced as planned and 80 percent of 
the projects were completed on-time. Moreover, of the completed 
defense adjustment projects, about 90 percent of defense 
construction projects and 100 percent of revolving loan funds 
came in on or under budget.\24\
---------------------------------------------------------------------------
    \23\ Id. at 4.
    \24\ Id.
---------------------------------------------------------------------------
    Although the recently completed defense adjustment projects 
have had only a short time to mature, the study's statistical 
findings concerning the program's job creation and private-
sector investment are compelling indicators of EDA's success: 
every $1 million in EDA defense adjustment infrastructure 
investment produced 124 permanent jobs. EDA created or retained 
jobs at a cost of $8.052 per job.\25\ In addition, EDA funding 
leveraged private-sector investment. For every $1 million of 
EDA funding, $2.2 million was leveraged in private sector 
investment.\26\
---------------------------------------------------------------------------
    \25\ Id. at 4-5.
    \26\ Id.
---------------------------------------------------------------------------
    The EDA defense adjustment program also makes grants to 
establish revolving loan funds to help communities diversify 
their economies. These grants result in similar job creation 
and private investment success stories. With respect to 
completed projects (fully loaned), every $1 million in EDA 
funding has created 304 permanent jobs; the EDA cost per job is 
$3,312.\27\ Completed projects have generated more than two 
times the initial EDA investment.\28\
---------------------------------------------------------------------------
    \27\ Id. at 6.
    \28\ Id.
---------------------------------------------------------------------------
    The study concluded that although the defense adjustment 
program is only a few years old, the available statistics 
indicate that these projects will likely contribute significant 
additional employment growth in the long term.\29\ Furthermore, 
the study notes the importance of these EDA projects to 
communities facing economic despair because of military base 
closings and the critical nature of EDA as the primary funding 
source.\30\
---------------------------------------------------------------------------
    \29\ Id. at 4-6.
    \30\ Id. at 6.
---------------------------------------------------------------------------
    Demonstrably, EDA's defense adjustment program creates 
jobs, leverages private investment, and increases the local tax 
base, as does its public works program.

Conclusion

    In the early 1960s, President John F. Kennedy often spoke 
of a national economic policy that would float all boats; they 
would rise with the general tide of economic growth. For those 
distressed communities, then and now, left behind by the 
``tide'', drowning in economic despair, EDA serves not only as 
rescuer, but also as teacher--teaching communities how to 
build, repair, and maintain the boats necessary to stay afloat 
in the global economy.
    Whether the analysis is from 1981 or 1997, the numbers all 
point to one conclusion: EDA has been and continues to be a 
resounding success. Through its targeted infrastructure and 
business investment, EDA creates permanent jobs in our Nation's 
most economically distressed rural and urban communities at a 
minimal cost of about $3,000 per job. The EDA investment 
leverages an enormous amount of private investment that would 
not exist in these communities if EDA did not serve its 
catalytic role. Finally, the beneficiaries of EDA grants 
generate more in taxes each year than are invested in the 
program.
    As a Member of Congress and this Committee for almost a 
quarter of a century, I can honestly say that I am proud to 
have fought for EDA/ARC reauthorization seventeen years ago, 
and I am just as proud to sing their praises today. Simply put, 
EDA and the ARC help communities help themselves, ultimately 
helping us all make our Nation stronger.

                                                 James L. Oberstar.