Mr. CLINGER. One of the concerns, that has been expressed to me by the constituents of the Farmers Home and Small Business, is the transfer of these programs to EDA, because, rightly or wrongly, they view it as more an urban- and big business-oriented program. I think that the thing that I specifically wanted to address, though, was as I understand it, those programs--the grants, the loans, et cetera--can be made, regardless of being in a designated area, regardless of what the current economic condition of the area. Now, this would be delimiting pretty drastically from what those programs have done in the past, would it not, if you brought them into EDA? Mr. HALL. Congressman, let me clarify. What is proposed before you is the National Public Works and Economic Development Act, which goes just to the existing authority and the absorption, if you will, of what was proposed for the National Development Bank. This bill does not address nor encompass the farmers home business and industry loan program nor the SBA 501/502 programs. Those programs will be transferred over to EDA statutorily intact through a reorganization plan. We would run those programs for the next year as currently constructed, in terms of their eligibility, et cetera. Subsequently, we will analyze the programs, look at how they relate to what we hope to be NPWEDA, and come before this committee with a proposal to merge them into a single, comprehensive statute. I would like to add that the farmers home program, of course, is just basically a guaranteed loan program. It does not have grants, planning, and technical assistance. We see the advantage of laying them at least side by side organizationally, if not melding them statutorily, to be able to provide one-stop service if you will, to smaller areas, generally under 10,000 population. Indeed, they can apply for a B. & I. loan, and now have access to technical assistance and public works grants from EDA. So we think it certainly makes sense in the general thrust to put the related programs together. Mr. CLINGER. I think that is important to clarify that you are not planning to absorb these into this bill, but rather, to provide the same sort of criteria, designation, et cetera, as would be permitted under their existing program. Mr. HALL. I might add a footnote, Congressman. I find it interesting that we have experienced a lot of concern expressed by urban people that we are too rural oriented, especially with the B. & I. proposal, and a lot of the rural people saying we are too urban oriented. Maybe we are doing something right, if we have concerns on both flanks-and that may be the definition of "balance." [Laughter.] Mr. CLINGER. Of course, dedesignation has always been a fairly volatile subject before this committee. We are going to be dedesignating, I gather, a number of areas. First of all, I understood you to say that there would be a sort of 2-year moratorium for any area presently designated would still qualify for a full range of EDA assistance for a period of 2 years after enactment of NPWEDA; is that correct? Mr. HALL. Basically, yes, for the public works, planning, and technical assistance, but not for the development financing. Mr. CLINGER. What about subsequently-that is to say when we have designated the new areas that will qualify, under NPWEDA, is there anything in this legislation that would require the agency to look at those areas on a fairly regular basis to determine if they still meet the designation criteria? Mr. HALL. Yes; administratively, we are proposing in effect to do an annual review. Mr. CLINGER. And would have the administrative authority to dedesignate if the areas did not meet the eligibility criteria in any given year? Mr. HALL. Basically, if an area was no longer eligible, they would be in effect "dedesignated," to use your term, but again, there would be the basic 3-year moratorium. Mr. CLINGER. Three years. Once an area is designated under NPWEDA, there would be a 3-year moratorium. Mr. HALL. And the other point I should make is that new areas that would be eligible and not designated until approval of the basic, simple OEDP, would be automatically eligible for development financing assistance. There is no sense for them waiting several months or so in order to get the paperwork and the local development process put together. We would be ready to move in quickly with financial assistance. Mr. CLINGER. Would the program as you contemplate it under NPWEDA be moving more in the direction of investment strategies as opposed to a project by project consideration? Mr. HALL. We would like to see the new program moving to improve local economic development planning processes. We have been working with some selected areas and across the board with the OEDP's. We hope that the local planning process would present more investment strategies with collections of types of projects showing a real investment trend, as opposed to the individual project by project. But I would not completely denigrate the individual project by project. The best-laid plans of mice and men often go awry, and sometimes you can overplan yourself. So we want the flexibility to quickly respond to targets of opportunity. And there are many areas, as I have indicated in my statements previously, that do not need big, full-blown economic development strategies; you just need a little common sense. If there is a good project to be put in place, you put the project in place. Mr. CLINGER. On page 21 of your testimony, you speak about the revolving loan programs, which of course, we have had in the past to States. What is the thinking of the Agency as far as once the revolving loan is set up; will the Agency maintain any sort of review of subsequent projects funded out of the revolving loan? Mr. HALL. We have tried to minimize the amount of subsequent project review by the Agency. There may be some areas, for example, environment, civil rights, that will be appropriate for the Agency to have some oversight on, but it would be minimal. The whole concept of a local revolving fund is to give flexibility on the part of the local economic development agency, as you well know, to respond quickly, and to the extent that you put in review and further processing on the part of the Federal agency, you defeat that objective. Mr. ROE. Will the gentleman yield for a moment? Mr. CLINGER. Certainly. Mr. ROE. It is 12:10, and I know that there are substantial questions yet to be asked. It seems to me that, if the committee so desires, I think we ought to recess at this juncture, and perhaps have you back tomorrow, Bob. Is your schedule free tomorrow morning? Mr. HALL. I am at your pleasure, Congressman. Mr. ROE. The hearing we have scheduled tomorrow morning should be relatively short, and then we could devote the time to continue this discussion, because I think there are a lot of very substantial questions to be asked. So if the committee agrees to that, why don't we plan on reconvening tomorrow morning at 10, and we will put you on first. Mr. HUTTO. Mr. Chairman, I apologize for not being here, but I had a markup in another committee. I understand that the Secretary has agreed to provide printouts of the eligible areas-is that correct? Mr. ROE. That is right. Mr. HUTTO. I wonder if I could ask him to provide us with a memo which identifies each eligibility criteria and the specific data source that you will draw on. Mr. HALL. Congressman, in the printout we will provide, we will actually have that data in terms of each determination. There will be a code that will tell the basis of the respective determination of each of those areas. That will be provided. Mr. HUTTO. I am assuming, then, that this will be based on the same data that you used in implementing the programs Mr. HALL. No; I mean, it is the same type of data—— Mr. ROE. If the gentleman would yield, just so that we all have the signals straight, this is the first initial presentation of the observations and recommendations of the executive branch at this juncture. And it seems to me that the first go-around that we will be going through today and tomorrow will be based on our observations at the moment. And I am quite sure that we will be calling you back again because there is some analysis, obviously, that has to be made. So if I could suggest to the gentleman that he be prepared for further questioning tomorrow morning. The computerized run that we receive on Friday will be a very important document, obviously. In my judgment, I do not feel that we will be able to conclude everything tomorrow in any case because there will have to be some analysis of certain points that we will discuss. So if we could hold further discussions over until tomorrow for, as my friend from California says, "the fine-tuning questions." [Whereupon, at 12:13 p.m., the subcommittee was adjourned to reconvene Wednesday, April 25, 1979, at 10 a.m.] PROPOSAL FOR A NATIONAL PUBLIC WORKS AND ECONOMIC DEVELOPMENT ACT WEDNESDAY, APRIL 25, 1979 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, COMMITTEE ON PUBLIC WORKS AND TRANSPORTATION, Washington, D.C. The subcommittee met, pursuant to recess, at 10:15 a.m., in room 2253, Rayburn House Office Building, Hon. Robert Roe, chairman of the subcommittee, presiding. Mr. ROE. The hearing that we recessed yesterday on the administration's proposed National Public Works and Economic Development Act of 1979 will continue this morning. When we broke yesterday Hon. Bill Clinger from the great State of Pennsylvania was in a series of questions to the Secretary. So, Bill, we will defer now to you. Mr. CLINGER. I think we were talking about the revolving loan provision. I have one more question in that regard. Is there any change in the entities to whom the Secretary can make loans? TESTIMONY OF HON. ROBERT T. HALL, ASSISTANT SECRETARY FOR ECONOMIC DEVELOPMENT, ACCOMPANIED BY HAROLD WILLIAMS AND VICTOR HAUSNER-Resumed Mr. HALL. No basic change. Mr. CLINGER. Nonprofits are not included? Mr. HALL. Not included. Mr. CLINGER. Mr. Secretary. I have had some communications Mr. HALL. Let me correct that. Nonprofits are eligible. Mr. HALL. Yes. Mr. CLINGER. Does the new title I, in your opinion, give States the same latitude and flexibility they have under 304 of PWEDA? I have some communications from State groups that are concerned about the fact that there may be a downgrading of the State's role. They object specifically to the vagueness of section 203(e). I am just wondering, there is a provision that I saw that gives priority consideration to redevelopment areas under title I. Does this somewhat downgrade the role of the States? Mr. HALL. No. The State's role is not downgraded. In fact, it is strengthened. States can receive direct grants as entities. States, as you indicated, have a provision to receive up to $40 million for State investment strategies. I should note that under the current programing the level of funding has been only $20 million. So this will expand the amount |
