commitments, indicating in each instance their relationship to estimated costs and schedules. Such records shall be retained until completion of all work performed or acquisitions made in connection with the project, or until final disbursement made by the Government, whichever is later, and thereafter for a period of at least 3 years. All such recipients shall further keep and preserve such full written financial records, accurately disclosing the amount and the disposition of the proceeds of such assistance, together with the amounts and dispositions of other funds applied to the project, as shall adequately establish compliance with the requirements of the applicable Act and the terms and conditions upon which such financial assistance was made. Recipients of grant assistance shall retain such financial records until completion of all work performed in connection with the project, or until final disbursement has been made by the Government, whichever is later and thereafter for a period of at least 3 years. Recipients of loans shall retain such financial records until final payment has been made to the Government and thereafter for a period of at least 3 years.

(b) All recipients of technical assistance grants-in-aid under Part 306 of this chapter, other than a Department or agency of the Federal Government, shall keep and preserve such full written financial records accurately disclosing the amount and the disposition by such recipient of the proceeds, together with the amounts and disposition of any other funds, whether in cash or in kind, applied to the project, as shall adequately establish compliance with the requirements of the applicable Acts and the terms and conditions upon which such grants-in-aid were made. Where applicable, the grantee shall also keep project control records reflecting work progress and indicating its relationship to estimated costs and schedules. Such records shall be preserved until completion of the purpose or undertaking for which such funds were used, or until final disbursement has been made by the Government, whichever is later, and thereafter for a period of at least 3 years.

(c) The contractor or subcontractor in connection with technical assistance or research contracted for under Part 306, and under the Area Redevelopment Act (42 U.S.C. 2510 and 2523), shall keep and preserve detailed project control

records in connection with the contract, reflecting acquisitions, work progress, expenditures, and commitments and indicating their relationship to established costs and schedules. The contractor or subcontractor shall also keep such full written financial records, as shall adequately establish compliance with the requirements of the applicable Acts and the terms and conditions of the contract or subcontract. Such records shall be preserved for at least 3 years after final payment under the contract or subcontract. (d) The Assistant 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, contractor, or subcontractor which are pertinent to assistance provided under the Public Works and Economic Development Act of 1965 and the Area Redevelopment Act.

[31 F.R. 16673, Dec. 30, 1966] § 301.55

Penalties.

(a) Whoever makes any statement knowing it to be false, or whoever willfully overvalues any security, for the purpose of obtaining for himself or for any applicant any financial assistance under the Act or any extension thereof by renewal, deferment of 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 Assistant Secretary or members of his staff, or for the purpose of obtaining money, property, or anything of value, under the Act, shall be punishable by a fine of not more than $10,000 or by imprisonment for not more than 5 years, or both.

(b) Whoever, being connected in any capacity with the Assistant 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 Assistant 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 Assistant Secretary, or without being duly authorized draws any order or issues, puts forth, or assigns any note, debenture, bond, or other obligation, or draft, bill of exchange, mort

gage, 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 Assistant Secretary, or (4) willfully gives any unauthorized information concerning any future action or plan of the Assistant 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 Assistant Secretary, shall be punished by a fine of not more than $10,000 or by imprisonment for not more than 5 years, or both.

[31 F.R. 11292, Aug. 26, 1966, as amended at 31 F.R. 16673, Dec. 30, 1966]

§ 301.56 Assignment or sale at public or private sale.

The Assistant Secretary may assign or sell at public or private sale, after acquiring an independent appraisal, or otherwise dispose of for cash or credit, in his discretion and upon such terms and conditions as he shall determine to be reasonable, any evidence of debt, contract, claim, person property, or security assigned to or held by him in connection with loans made or evidences of indebtedness purchased under the 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.

§ 301.57 Employment of expediters and administrative employees.

(a) As a condition to the extension of any financial assistance under the Act, any business enterprise making application will be required to:

(1) Certify to the Assistant 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 Assistant Secretary for assistance of any sort, under the Act, and 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 Assistant 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 of such assistance or any part thereof, or within 1 year prior thereto, has served as an officer, attorney, agent, or employee, occupying a position or engaging in activities which the Assistant Secretary has determined involve discretion with respect to the granting of assistance under the Act.

(b) Such positions include the Assistant Secretary, Deputy Assistant Secretaries for Economic Development, Policy Coordination, Economic Development Planning, and Economic Development Operations; Office Directors, Deputy Directors, and Division Chiefs in the Offices of Public Works, Business Development, and Technical Assistance; and Director and Deputy Director of the Offices of Economic Research, Regional Development Planning, and District and Area Planning. They also include Area Office Directors with respect to projects located in their areas. Clerical employees do not occupy positions involving discretion with respect to the granting of assistance under the Act. The discretionary nature of the positions and activities of other employees shall be determined by the Assistant Secretary at such time as the employee terminates his employment.

(c) For the purposes of this regulation, the term "business enterprise" includes all private applicants, both profit and nonprofit.

[31 F.R. 16674, Dec. 30, 1966]

§ 301.58 Employment of local labor.

(a) The maximum feasible employment of local labor shall be made in the construction of public works and development facility projects receiving direct Federal grants under § 305.3 of this chapter or Federal loans under § 305.17 of this chapter. Accordingly, every contractor and subcontractor undertaking to do work on any such project which is or reasonably may be done as on-site work, shall be required to employ in carrying out such contract work qualified persons who regularly reside in the designated area where such project is to be located, or in the case of economic development centers, qualified persons who regularly reside in the center or in the adjacent or nearby redevelopment areas within the economic development district, except:

(1) To the extent that qualified persons regularly residing in the designated area or economic development district are not available;

(2) For the reasonable needs of any such contractor or subcontractor to employ supervisory or specially experienced individuals necessary to assure an efficient execution of the contract;

(3) For the obligation of any such contractor or subcontractor to offer employment to present or former employees as the result of a lawful collective bargaining contract, provided that in no event shall the number of nonresident persons employed under this subparagraph exceed 20 percent of the total number of employees employed by such contractor and his subcontractors on such project.

(b) Every such contractor and subcontractor shall furnish the U.S. Employment Service office in the area in which the public works or development facility project is located with a list of all positions for which it may from time to time require laborers, mechanics, and other employees, the estimated numbers of employees required in each classification, and the estimated dates on which such employees will be required;

(c) The contractor shall give full consideration to all qualified job applicants referred by the local employment service, but is not required to employ any job applicants referred whom the contractor does not consider qualified to perform the classification of work required;

(d) The payrolls maintained by the contractor shall contain the following information: The employee's full name, address, and social security number and a notation indicating whether the employee does, or does not, normally reside in the area in which the project is located or, in the case of an economic development center, in such center or in an adjacent or nearby redevelopment area within the economic development district;

(e) The contractor shall include the provisions of this section in every subcontract for work which is, or reasonably may be, done as on-site work.

No financial assistance under the Act may be made directly or indirectly for sewer or other waste disposal facilities unless the Secretary of the Interior certifies to the Assistant 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, innterstate, or local water quality standards.

[31 F.R. 11292, Aug. 26, 1966, as amended at 31 F.R. 16674, Dec. 30, 1966]

§ 301.61 Preapproval construction.

It is the policy of the Administration to discourage the undertaking of any construction prior to the submission of an application for financial assistance. Commencement of a project prior to approval of the application for assistance is not prohibited but may jeopardize the favorable consideration of such application since, among other things, it raises a rebuttable presumption that funds necessary for the accomplishment of the project are otherwise available and that proper contracting procedures and labor standards have not been followed.

§ 301.62

Record of application.

The Assistant Secretary will maintain as a permanent part of the records of the Economic Development Administration a list of applications approved for financial assistance under Part 305 of the regulations in this chapter, which shall be kept available for public inspection during the regular business hours of the Department of Commerce. The following information will be posted in such list as soon as each application is approved: (a) The name of the applicant and, in the case of corporate applications, the names of the officers and directors thereof, (b) the amount and duration of the loan or grant for which application is made, (c) the purposes for which the proceeds of the loan or grant are to be used, and (d) a general description of the security offered in the case of a loan. § 301.63 Disclosure of information to the public.

(a) It is the policy of the Economic Development Administration to make information from its records available to the public to the full extent consistent with the rights of the individuals affected and with the national interest.

Therefore, information made available to EDA by applicants and others subsequent to January 1, 1967, will generally be subject to public disclosure, except for the following types of information:

(1) Proprietary commercial or financial information obtained from any person, including but not limited to trade secrets, processes, operation, income, profits, losses, or expenditures of any individual, firm, partnership, corporation, or association;

(2) Matters related solely to the internal personnel rules and practices of the Administration;

(3) Interagency and intraagency memoranda or letters which would not be available by law to a private party in litigation with the Administration;

(4) Personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy;

(5) Investigatory files compiled for law enforcement purposes except to the extent available by law to a private party; (6) Information specifically exempted from disclosure by statute.

(b) Doubtful or disputed cases involving any EDA office shall be referred to the Office of Chief Counsel, Washington, for decision.

[31 F.R. 16674, Dec. 30, 1966]

570; 40 U.S.C. App. A 214, 302, 42 U.S.C. 3211, Dept. Orders 4-A, 5, 30 F.R. 11399, 11892.

SOURCE: The provisions of this Part 302 appear at 31 F.R. 11294, Aug. 26, 1966; 31 F.R. 16674, Dec. 30, 1966, unless otherwise noted.

Subpart A-Standards for Designation of Redevelopment Areas Under Section 401(a) of the Act

§ 302.1 General standards for designation on the basis of unemployment. The Assistant Secretary shall designate as "redevelopment areas" those areas in which he determines, upon the basis of standards generally comparable with those set forth in paragraphs (a) and (b) of this section, that there has existed substantial and persistent unemployment for an extended period of time, including any area for which the Secretary of Labor finds:

(a) That the current rate of unemployment, as determined by appropriate annual statistics for the most recent available calendar year, is 6 percent or more and has averaged at least 6 percent for the qualifying time periods specified in paragraph (b) of this section; and

(b) That the annual average rate of unemployment has been at least

(i) 50 percent above the national average for 3 of the preceding 4 calendar years, or

(ii) 75 percent above the national average for 2 of the preceding 3 calendar years, or

(iii) 100 percent above the national average for 1 of the preceding 2 calendar years.

§ 302.2 Additional standards for designation.

The Assistant Secretary will also designate as redevelopment areas:

(a) Those additional areas which have suffered substantial loss of population due to lack of employment opportunities. Such additional areas shall be defined as those which suffered a 25-percent or more loss of population between 1950 and 1960, and which also have an annual median family income of not more than $2,830.00, as determined by the 1960 census;

(b) Those additional areas which have an annual median family income of not more than $2,264.00, as determined by the 1960 census;

(c) Those additional Federal or State Indian reservations or trust or restricted Indian-owned land areas which the Administrator, 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;

(d) Upon request of such areas, those additional areas in which the Assistant Secretary determines that the loss, removal, curtailment, or closing of a major source of employment has caused within 3 years prior to, or threatens to cause within 3 years after, the date of the request an unusual and abrupt rise in unemployment of such magnitude that the unemployment rate for the areas at the time of the request exceeds the national average, or can reasonably be expected to exceed the national average, by 50 percent or more unless assistance is provided;

(e) Within a State which otherwise has no qualifying areas, that area in such State which in his opinion most nearly qualifies under paragraphs (a) through (d) of this section.

Subpart B-Standards for Designation of Areas Under Section 102 of the Act

conditional designation, or within such additional period as the Assistant Secretary may grant for good cause;

(b) Any area which does not submit an acceptable OEDP within 6 months after notification of its eligibility for designation shall not thereafter be designated prior to the next annual review of eligibility; however, such period may be extended for good cause;

(c) No area will be designated which does not have a population of at least 1,500 persons, except for areas designated in accordance with § 302.2(c); and

(d) Except for areas designated in accordance with § 302.2 (c) and (d), no area will be designated which is smaller than a "labor area" (as defined by the Secretary of Labor), a county, or a municipality with a population of over 250,000 persons, whichever the Assistant Secretary deems appropriate.

(a) Prior to June 1 of each year, the Assistant Secretary will conduct a review of all areas designated pursuant to this part, which will be used as the basis for terminating, upon 30 days' notice and prior to June 30, those areas in which economic circumstances have so improved that the area no longer meets the standards for designation set forth in § 302.1, § 302.2, or § 302.10.

(b) The termination of an area's designated status will not:

(1) Affect the validity of any application filed, or contract or undertaking entered into, with respect to such area prior to such termination, so long as the applicant pursues such application diligently and submits promptly there