STANDARD FORM 304 DEPARTMENT OF COMMERCE ECONOMIC DEVELOPMENT ADMINISTRATION May 1969, Bureau of the Budget. LDA-29 STANDARD FORM 300 July 1964, Bureau of the Budget 300-101 DEPARTMENT OF COMMERCE ECONOMIC DEVELOPMENT ADMINISTRATION ADMINISTRATION OF ECONOMIC DEVELOPMENT ASSISTANCE PROGRAMS EDA-30 GENERAL STATEMENT Mr. SLACK. We would ask the Secretary at this time to make a statement with regard to this request if he would care to. Mr. BLUNT. Thank you very much. Mr. Chairman and members of the committee. I am pleased to appear before you today in support of the supplemental budget request for the programs of the Economic Development Administration. We are requesting an increase of $51,500,000 in program funds and $5,275,000 in administrative funds; the total revised estimate is $258,600,000, an increase of $56,775,000 above the $201,825,000 currently approved by both the House and the Senate. EXTENSION OF AUTHORIZATION As you know, both Houses have passed a 2-year extension of the Public Works and Economic Development Act which provides for a continuation of the programs of EDA and the title V regional commissions. The new legislation also provides for a number of new programs for which additional funding is required this fiscal year. These new program areas are: Title IX economic adjustment assistance, section 302 planning grants, section 304 grants to States, and expansion of title II business development assistance. TITLE IX We are requesting $30 million for Economic Adjustment assistance as authorized by the new title IX of the act. This assistance will be provided to States and localities to help them meet actual or threatened increases in unemployment and other economic adjustment problems resulting from severe changes in economic conditions, including actions of the Federal Government. Grants could be used in direct expenditures by the grantee or through redistribution to public and private groups through grants, loan guarantees or other assistance. Eligible recipients must submit plans to the Secretary in order to be awarded funding and must submit annual reports on their progress against those plans. GRANTS TO STATES We are requesting $13 million for grants to States as authorized by the new section 304. These funds may be used by the States to supplement approved EDA grants or to make new grants or loans under the authority of titles I, II and IV of the act. Funds approved under this new program will be distributed among the States based on the percentage of title I funds receeived by each State since the beginning of EDA. This new program will be carried out in consonance with the plans developed under section 302 of the Act. PLANNING GRANTS A total of $6,500,000 is requested for planning grants as authorized by section 302. Of this amount. $5,500.000 will be for grants to States; in addition to enhancing their ability to coordinate the planning efforts of intrastate political jurisdictions, the State planning grants will provide a sound base for the implementation of the new economic adjustment assistance program. The remaining $1 million would be made available to support the planning programs of other political subdivisions, including cities; and districts. BUSINESS DEVELOPMENT An increase of $2 million is requested for the business development program to finance new program tools authorized in the extension legislation. The new tools are direct working capital loans, a broader authority for working capital guarantees, guarantees of fixed asset loans made by private institutions, and guarantees of lease payments for buildings and equipment. We will work with SBA to assure that the lease guarantee programs of the two agencies are closely coordinated. ADMINISTRATION The additional $5,275,000 for administration would provide funding for support of 650 permanent employees [our current staffing level]. The original budget for fiscal 1975 proposed a yearend level of 487. Thank you, Mr. Chairman, this concludes my prepared statement; I will be glad to answer any questions the committee may have. FISCAL 1975 PROGRAM REQUEST Mr. SLACK. Do you consider this to be an emergency and that it should be in this supplemental? Mr. BLUNT. In view of the new authority which has been legislated for EDA and the consequent demands on the agency as well as other factors I would say yes. Mr. SLACK. The first of the two items is a request for $51,500,000 additional for economic development assistance programs. What was the comparable amount available for these programs in fiscal year 1974? Mr. BLUNT. $220.5 million. Mr. SLACK. How much is in the 1975 appropriation bill? Mr. BLUNT. $184,200,000. Mr. SLACK. So with this additional amount the 1975 funds would total how much? Mr. BLUNT. $235,700,000 in program funds. BUSINESS DEVELOPMENT Mr. SLACK. How is the $2 million additional for industrial development loans and guarantees to be used? Mr. BLUNT. We contemplate that the new tools authorized by the legislation would require some additional funding, and although there is no precise way of determining exactly what funding would be appropriate in proportion to the amount we had asked for the basic program, this seemed to be a logical response. Mr. SLACK. When you refer to "new tools" what do you mean? What sort of new tools? Mr. BLUNT. Our authority for making guarantees of loans has broadened so we can guarantee a fixed asset loan and also guarantee |