An Act to provide grants for public works and development facilities, other financial assistance, and the planning and coordination needed to alleviate conditions of substantial and persistent unemployment and underemployment in economically distressed areas
PL 89-136 (S.1648), enacted 08/26/1965

552 
PUBLIC LAW 89-136-AUG. 26, 1965 
[79 STAT. 
Public Law 89-136 
August 26, 1965 
[S. 1648] 
Public Works 
and Economic De-
velopment Act of 
1965. 
AN ACT 
To provide grants for public works and development facilities, other financial 
assistance and the planning and coordination needed to alleviate conditions of 
substantial and persistent unemployment and underemployment in economically 
distressed areas and regions. 
Be it enacted hy the Senate and House of Rein-eHentat'tves of the 
United States of America in Congress assembled^ That this Act may 
be cited as the "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 and underemploy-
ment ; that such unemployment and underemployment 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 substan-
tial and persistent unemployment and underemployment to take effec-
tive 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. 
TITLE I—GRANTS FOR PUBLIC WORKS 
DEVELOPMENT FACILITIES 
AND 
SEC. 101. (a) Upon the application of any State, or political 
subdivision thereof, Indian tribe, or private or public nonprofit orga-
nization 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 worksj public service, or 
development facility usage, and the acquisition, construction, 
rehabilitation, alteration, expansion, or improvement of such fa-
cilities, 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 oppor-
tunities, 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 unem-
ployed and members of low-income families or otherwise 
et seq. 
79 STAT. ] 
PUBLIC LAW 89-136-AUG. 26, 1965 
553 
substantially further the objectives of the Economic Oppor-
tunity Act of 1964; 
78 Stat. sos. 
(B) the project for which a grant is requested will fulfill ^J^/^^^ ^
^
*
^
^ 
a pressing need of the area, or part thereof, in which it is, 
or will be, located; and 
(C) the area for which a project is to be undertaken has 
an approved overall economic development program as pro-
vided in section 202(b) (10) and such project is consistent 
with such program; 
(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 here-
inafter defined), direct grants-in-aid authorized under this sec-
tion, and Federal grant-in-aid programs authorized by the Water-
shed Protection and Flood Prevention Act (68 Stat. 666, as 
amended), and the eleven watersheds authorized by the Flood ^ote "^*^ ^°°^ 
(^ontrol Act of December 22,1944, as amended and supplemented 
(58 Stat. 887), for which they are eligible but for which, because ^^^s^^sc yoi-i 
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 j)ercentage 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. 
Sup-
])lementary grants shall be made by the Secretary, in accordance witli 
such regulations as he shall prescribe, by increasing the amounts of di-
rect 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. 
Notwithstand-
ing 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 redevelop-
ment areas under such programs abo\e the fixed maximum portion of 
tlie 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 pro-
grams 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 determniing 
the amount of any supplementary grant available to any project un-
der this section, the Secretary shall take into consideration the rela-
tive needs of the area, the nature of the project 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 seA'erity of the rates of unemployment 
in the eligible ai-eas and the duration of such unemployment and (2) 
49-850 0-66—38 
554 
PUBLIC LAW 89-136-AUG. 26, 1965 
[79 STAT. 
the income levels of families and the extent of mideremployment in 
eligible areas. 
(e) Except for projects specifically authorized by Congress, no 
financial assistance shall be extended under this section with respect to 
any public service or development facility which would compete with 
an existing privately owned public utility rendering a service to the 
public at rates or charges subject to regulation by a State or Federal 
regulatory body, unless the State or Federal regulatory body deter-
mines that in the area to be served by the facility for which the finan-
cial assistance is to be extended there is a need for an increase in such 
service (taking into consideration reasonably foreseeable 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. 
(f) The Secretary shall prescribe regulations which will assure that 
appropriate local governmental authorities have been given a reason-
able opportunity to review and comment upon proposed projects under 
this section. 
SEC. 102. (a) In addition to the assistance otherwise authorized, 
the Secretary is authorized to make grants in accordance with the pro-
visions of this title to those areas which the Secretary of Labor deter-
mines, on the basis of average annual available unemployment statis-
tics, were areas of substantial unemployment during the preceding 
calendar year. 
(b) Areas designated under the authority of this section shall be 
subject to an annual review of eligibility in accordance with section 
402, and to all of the rules, regulations, and procedures applicable to 
redevelopment areas except as the Secretary may otherwise prescribe 
by regulation. 
SEC. 103. Not more than 15 per centum of the appropriations made 
])ursuant to this title may be expended in any one State. 
SEC. 104. No part of any appropriations made pursuant to this title 
may be expended for any project in any area which is within the 
"Appalachian region" (as that term is defined in section 408 of the 
Ante, p. 21. 
Appalachian Kegional Development Act of 1965) which is approved 
for assistance under the Appalachian Regional I>evelopment Act of 
1965. 
Appropriation. 
^^^ J05 Xliere 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 the fiscal year ending 
June 30,1969. 
FINANCIAL ASSISTANCE FOR SEW^ER FACILITIES 
SEC. 106. Xo financial assistance, through grants, loans, guarantees, 
or otherwise, shall be made under this Act to be used directly or indi-
rectly 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 appli-
cable Federal, State, interstate, or local water quality standards. 
TITLE II—OTHER FINANCIAL ASSISTANCE 
P U B L I C W^ORKS A N D D E V E L O P M E N T FACILITY LOANS 
SEC. 201. (a) Upon the application of any State, or political subdi-
A'ision 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 
78 Stat. ;J08. 
4 2 u s e 2701 
79 STAT. ] 
PUBLIC LAW 89-136-AUG. 26, 1965 
555 
jind improvements for public ^yorks, public service, or development 
facility usage, including public works, public service, and development 
facility usage, to be provided by agencies of the Federal (xovernment 
pursuant to legislation requiring that non-Federal entities bear some 
part of the cost thereof, and the acquisition, construction, rehabilita-
tion, alteration, expansion, or improvement of such facilities, includ-
ing related machinery and equipment, within a redevelopment area, 
if he finds that— 
(1) the project for which financial assistance is 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 establish-
ment 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 note. 
available from private lenders or from other Federal agencies on 
terms which in the opinion of the Secretary will permit the accom-
plishment 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 sucli 
program. 
(b) Subject to section 701(5), no loan, including renewals or ex-
tensions thereof, shall be made under this section for a period exceed-
ing 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 obliga-
tions of the United States with remaining periods to maturity com-
parable to the average maturities of such loans, adjusted to the nearest 
one-eighth of 1 per centum, less not to exceed one-half of 1 per centum 
l)er annum. 
(c) There are hereby authorized to be appropriated such sums as 
Appropriation, 
may be necessary to carry out the provisions of this section and section 
202: Provided^ That annual appropriations for the purpose of pur-
chasing evidences of indebtedness, 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 30,1970. 
(d) Except for projects specifically authorized by Congress, no 
financial assistance shall be extended under this section with respect 
to any public service or deA'elopment facility which would compete 
with an existing privately owned public utility rendering a service 
to the public at rates or charges subject to regulation by a State or 
Federal regulatory body, unless the State or Federal regulatory body 
determines 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 foreseeable 
556 
PUBLIC LAW 89-136-AUG. 26, 1965 
[79 STAT. 
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. 
(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 proj-
ects under this section. 
LOANS AND 
GUARANTEES 
SEC. 202. (a) The Secretary is authorized (1) to purchase evi-
dences of indebtedness and to make loans (which for purposes of this 
section shall include participations in loans) to aid in financing any 
project within a redevelopment area for the purchase or development 
of land and facilities (including machinery and equipment) for in-
dustrial or commercial usage, including the construction of new build-
ings, the rehabilitation of abandoned or unoccupied buildings, and 
the alteration, conversion, or enlargement of existing buildings; and 
(2) to guarantee loans for working capital made to private borrowers 
by private lending institutions in connection with projects in redevel-
opment areas assisted under subsection (a) (1) hereof, upon applica-
tion of such institution and upon such terms and conditions as the 
Secretary may prescribe: Provided^ hovMver^ That no such guarantee 
shall at any time exceed 90 per centum of the amount of the outstand-
ing unpaid balance of such loan. 
(b) Financial assistance under this section shall be on such tenns 
and conditions as the Secretary determines, subject, however, to the 
following restrictions and limitations: 
(1) Such financial assistance shall not be extended to assist estab-
lishments relocating from one area to another or to assist subcontrac-
tors whose purpose is to divest, or whose economic success is dependent 
upon divesting, other contractors or subcontractors of contracts there-
tofore customarily performed by them: Provided^ however^ That such 
limitation shall not be construed to prohibit assistance for the expan-
sion 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 an increase in unemployment of the area of original location 
or in any other area where such entity conducts business operations, 
imless 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 pri-
vate 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. 
79 STAT. ] 
PUBLIC LAW 89-136-AUG. 26, 1965 
557 
(6) Xo evidences of indebtedness shall be piu'cliased and no loans 
shall be made or guaranteed unless it is determined that there is rea-
sonable assurance of repayment. 
(7) Subject to section 701(5) of this Act, no loan, including re-
newals 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 
hereunder: 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 of 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 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 oi 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, 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 
l)eriod 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 subor-
dinate and inferior to the lien or liens securing such Federal 
financial assistance: Provided^ hoicever^ That, except in projects 
iuA^olving 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 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 provi-
sion 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 m sub-
paragraph (B), any Federal financial assistance extended under 
this section may be repayable only after other loans made in con-
nection 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. 
42 u s e 2501 
note. 
558 
PUBLIC LAW 89-136-AUG. 26, 1965 
[79 STAT. 
(10) No such assistance shall be extended unless there shall be sub-
mitted to and approved by 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 pre-
viously approved overall economic development programs as he may 
deem appropriate. 
ECONOMIC DEVELOPMENT REVOLVING FUND 
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 (hereinafter 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 finan-
cial 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 redevelopment fund or may be received from obligations 
75 Stat. 47. 
outstaudiug under the Area Kedevelopment 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 June preceding the fiscal year in 
which the loans were made. 
TITLE III—TECHNICAL ASSISTANCE, RESEARCH, AND 
INFORMATION 
SEC. 301. (a) In carrying out his duties under this Act the Secre-
tary is authorized to provide technical assistance which would be use-
ful in alleviating or preventing conditions of excessive unemployment 
or underemployment (1) to areas which he has designated as redevel-
opment 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 developing poten-
tialities 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 pri-
vate individuals, partnerships, firms, corporations, or suitable institu-
tions, 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 sub-
79 STAT. ] 
PUBLIC LAW 89-136-AUG. 26, 1965 
559 
section (a) hereof. In determining the amount of the non-Federal 
share of such costs or expenses, the Secretary shall give due considera-
tion 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 
^^ ^t^*- 59o. 
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12 u s e 
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amended, and highway plannmg and research grants authorized under ^^^^ 
the Federal Aid Highway Act of 1962, to assure adequate and effective 
76 stat. i HS. 
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 solu-
tions to the problems resulting from these conditions, and (C) assist 
in providing the personnel needed to conduct such programs. 
The 
program of study, training, and research may be conducted by the 
Secretary through members of this staff, through payment of funds 
authorized for this section to other departments or agencies of the 
Federal Government, or through the employment of private indi-
viduals, 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 exces-
sive 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 busi-
ness firms which are located in redevelopment areas and which are 
desirous of obtaining Government contracts for 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 con-
sisting of governmental and nongovernmental 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 depart-
ment 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, cfn^reJs*" 
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. 
560 
PUBLIC LAW 89-136-AUG. 26, 1965 
[79 STAT. 
Appropriation. 
g^^ 3Q2 There is hereby authorized to be appropriated $25,000,000 
annually for the purposes of this title, for the fiscal year ending June 
30, 1966, and for each fiscal year thereafter through the fiscal year 
ending June 30,1970. 
TITLE IV—AREA AND DISTRICT ELIGIBILITY 
PART A—REDEVELOPMENT AREAS 
AREA ELIGIBILITY 
SEC. 401. (a) The Secretary shall designate as "redevelopment 
Rreas"— 
(1) those areas in which he determines, upon the basis of 
standards generally comparable with those set forth in para-
graphs (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 available calendar year, 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 40 per centum of the national median, as deter-
mined 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 Sec-
retary, after consultation with the* Secretary of the Interior 
or an appropriate State agency, determines manifest the great-
est degree of economic distress on the basis of unemployment 
and income statistics and other appropriate evidence of economic 
underdevelopment; 
(4) upon request of such areas, those additional areas in which 
the Secretary determines 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. 
Xotwithstanding any pro-
vision 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; 
79 STAT. ] 
PUBLIC LAW 89-136-AUG. 26, 1965 
561 
(5) notwithstanding any provision of this section to the con-
trary, those additional areas which were designated redevelop-
ment areas under the Area Redevelopment Act on or after 
J^ ^l^c *^ 
March 1,1965: Provided^ however, That the continued eligibility note. 
^ °^ 
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 the standards of eco-
nomic need set forth in subsections (a)(1) through (a) (4) of this 
section. 
(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 eco-
nomic development program in accordance with subsection 202 
(b)(10) of this Act within a reasonable time after notification 
of eligibility for designation, shall not thereafter be designated 
jjrior to the next annual review of eligibility in accordance with 
section 402 of this Act ; 
(3) no area shall be designated wliich does not have a popula-
tion of at least one thousand five hundred persons, except for areas 
designated under subsection 401(a) (3), which shall have a popu-
lation of not less than one thousand persons; and 
(4) except for areas designated under subsections (a) (3) and 
(a) (4) hereof, no area shall 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 two hundred and fifty 
thousand, whichever in the opinion of the Secretary is appropriate. 
(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 con-
duct 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 fore-
going officers for any expenditures incurred by them under this section. 
(d) If a State has no area designated under the preceding sub-
sections 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 accord-
ance 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 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 redevelop-
ment area if to do so would result in such State having no redevelop-
ment area. 
(e) As used in this Act, the term "redevelopment area" refers to ^^J^,!'^^''^^"^'"^"* 
any area within the Ignited States which has been designated by the ^^^^' 
Secretary as a redeveloiDment area. 
AXXtrAL RE^•IEW OF AREA 
ELIGIBILITY 
SEC. 402. Tlie Secretary shall conduct an annual review of all areas 
designated in accordance with section 401 of this Act, and on the 
basis thereof shall terminate or modify the designations of such areas 
in accordance Avith objective standards which he shall prescribe by 
562 
PUBLIC LAW 89-136-AUG. 26, 1965 
[79 STAT. 
regulation. 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) pre-
vent 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 desig-
nated 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 geographical 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 popula-
tion, and contains sufficient resources, to foster economic de-
velopment on a scale involving more than a single redevelop-
ment area; 
(B) the proposed district contains two or more redevelop-
ment areas; 
(C) the proposed district contains one or more redevelop-
ment 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 ac-
cordance 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 pro-
gram and recommended by the State or States affected for 
such special designation; 
(B) the proposed center is geographically and economi-
cally 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 dis-
trict; 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 cri-
teria of sections 101, 201, and 202 of this Act, except as may be 
79 STAT.] 
PUBLIC LAW 89-136-AUG. 26, 1965 
563 
herein otherwise provided, for projects in economic development 
centers designated 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 poten-
tial of the district or result in additional long-term employ-
ment 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 
jirescribe 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 cooi^erate with the several States— 
(A) in sponsoring and assisting district economic plan-
ning and development groups, and 
(B) in assisting such district groups to formulate district 
overall economic development programs; 
(8) to encourage participation oy appropriate local govern-
mental authorities in such economic develo]:)ment districts. 
(c) The Secretarj^ shall by regulation ])rescribe standards for the 
termination or modification of economic development districts and 
economic develo])ment 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" 
refei-s 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 l)een 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 polit-
ical 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 
"Economic de-
velopment dis-
trict,»» 
"Economic de-
velopment center.'* 
"Local govern-
ment." 
Appropriation. 
564 
PUBLIC LAW 89-136-AUG. 26, 1965 
[79 STAT. 
year thereafter through the fiscal year ending June 30,1970, for finan-
cial assistance extended under the provisions of subsection (a) (3) and 
(a) (4) hereof. 
Effective date. 
(j^^ jj^ ordcr to allow time for adequate and careful district plan-
ning, subsection (g) of this section shall not be effective until one year 
from the date of enactment. 
TITLE V—REGIONAL ACTION PLANNING COMMISSIONS 
ESTABLISHMENT OF REGIONS 
SEC. 501. The Secretary is authorized to designate appropriate 
"economic development regions" within the United States with the 
concurrence of the States in which such regions will be wholly or 
partially located if he finds (A) that there is a relationship between 
the areas within such region geographically, culturally, historically^, 
and economicallj, (B) that with the exception of Alaska and Hawaii, 
the region is within contiguous States, and (C) upon consideration 
of the following matters, among others, that the region has lagged 
behind the whole Nation in economic development: 
(1) the rate of unemployment is substantially above the na-
tional rate; 
(2) the median level of family income is significantly below 
the national median; 
(3) the level of housing, health, and educational facilities is 
substantially below the national level; 
(4) the economy of the area has traditionally been dominated 
by only one or two industries, which are in a state of long-term 
decline; 
(5) the rate of outmigration of labor or capital or both is 
substantial; 
(6) the area is adversely affected by changing industrial 
technology; 
(7) the area is adversely affected by changes in national de-
fense facilities or production; and 
(8) indices of regional production indicate a growth rate sub-
stantially below the national average. 
REGIONAL 
COMMISSIONS 
SEC. 502. (a) Upon designation of development regions, the Sec-
retary shall invite and encourage the States wholly or partially located 
within such regions to establish appropriate multistate regional 
commissions. 
Membership. 
(jj) Each such commissiou shall be composed of one Federal mem-
ber, 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 region. 
Each 
State member may be the Governor, or his designee, or such other 
person as may be provided by the law of the State which he represents. 
The State members of the commission shall elect a cochairman of the 
commission from among their number. 
(c) Decisions by a regional commission shall require the aifirmative 
vote of the Federal cochairman and of a majority, or at least one if 
only two, of the State members. 
In matters coming before a regional 
commission, the Federal cochairman shall, to the extent practicable, 
consult with the Federal departments and agencies having an interest 
in the subject matter. 
Alternates. 
^(j^ Each State member of a regional commission shall have an 
alternate, appointed by the Governor or as otherwise may be provided 
79 STAT. ] 
PUBLIC LAW 89-136-AUG. 26, 1965 
565 
by the law of the State which he represents. 
The President, by and 
with the advice and consent of the Senate, shall appoint an alternate 
for the Federal cochairman of each regional commission. 
An alter-
nate shall vote in the event of the absence, death, disability, removal, 
or resignation of the State of Federal cochairman for which he is an 
alternate. 
(e) The Federal cochairman to a regional commission fihall be com- 
compensation. 
l^ensated by the Federal Government from fmids authorized by this 
Act up to level IV of the Federal Executive Salary Schedule. His 
78^stat, 417. 
alternate shall be compensated by the Federal Government from funds 
authorized by this Act at not to exceed the maximum scheduled rate 
for grade GS-18 of the Classification Act of 1949, as amended, and 
^u'li^nla^^' 
Avhen not actively serving as an alternate for the Federal cochair-
man shall perform such functions and duties as are delegated to him 
by the Federal cochairman. Each State member and his alternate 
shall be compensated by the State which they represent at the rate 
established by the law of such State. 
(f) If the Secretary finds that the State of Alaska or the State of 
Hawaii meet the requirements for an economic development region, 
he may establish a Commission for either State in a manner agreeable 
to him and to the Governor of the affected State. 
FUNCTIONS 
OF 
COMMISSION 
SEC. 503. (a) In carrying out the purposes of this Act. each Com-
mission shall with respect to its region— 
(1) advise and assist the Secretary in the identification of 
optimum 
boundaries 
for 
multistate 
economic 
development 
regions; 
(2) initiate and coordinate the preparation of long-range over-
all economic development programs for such regions; 
(3) foster surveys and studies to provide data required for the 
preparation of specific plans and programs for the development 
of such regions; 
(4) advise and assist the Secretary and the States concerned 
in the initiation and coordination of economic development dis-
tricts, in order to promote maximum benefits from the expendi-
ture of Federal, State, and local funds; 
(5) promote increased private investment in such regions; 
(6) prepare legislative and other recommendations 
with 
respect to both short-range and long-range programs and projects 
for Federal, State, and local agencies; 
(7) develop, on a continuing basis, comprehensive and coordi-
nated plans and programs and establish priorities thereunder, 
giving due consideration to other Federal, State, and local plan-
ning m the region; 
(8) conduct and sponsor investigations, research, and studies, 
including an inventory and analysis of the resources of the region, 
and, in cooperation with Federal, State and local agencies, spon-
sor demonstration projects designed to foster regional produc-
tivity and growth; 
(9) review and study, in cooperation with the agency involved, 
Federal, State, and local public and private programs and, where 
appropriate, recommend modifications or additions which will 
increase their effectiveness in the region; 
(10) formulate and recommend, where appropriate, interstate 
compacts and other forms of interstate cooperation, and work 
with State and local agencies in developing appropriate model 
legislation; and 
566 
PUBLIC LAW 89-136-AUG. 26, 1965 
[79 STAT. 
(11) provide a forum for consideration of problems of the 
region and proposed solutions and establish and utilize, as appro-
priate, citizens and special advisory councils and 
public 
conferences. 
(b) The Secretary shall present such plans and proposals of the 
commissions as may be transmitted and recommended to him (but are 
not authorized by any other section of this Act) first for review by the 
Federal agencies primarily interested in such plans and proposals and 
then, together with the recommendations oi such agencies, to the 
President for such action as he may deem desirable. 
(c) The Secretary shall provide effective and continuing liaison 
between the Federal Government and each regional commission. 
(d) Each Federal agency shall, consonant with law and within 
the limits of available funds, cooperate with such commissions as may 
be established in order to assist them in carrying out their functions 
under this section. 
(e) Each regional commission may, from time to time, make addi-
tional recommendations to the Secretary and recommendations to the 
State Governors and appropriate local officials, with respect to— 
(1) the expenditure of funds by Federal, State, and local 
departments and agencies in its region in the fields of natural 
resources, agriculture, education, training, health and welfare, 
transportation, and other fields related to the purposes of this 
Act; and 
(2) such additional Federal, State, and local legislation or 
administrative actions as the commission deems necessary to 
further the purposes of this Act. 
PROGRAM DEVELOPMENT CRITERIA 
SEC. 504. In developing recommendations for programs and proj-
ects for future regional economic development, and in establishing 
within those recommendations a priority ranking for such programs 
and projects, the Secretary shall encourage each regional commission 
to 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; 
(2) the population and area to be served by the project or class 
of projects including the relative per capita income and the un-
employment rates in the area; 
(3) the relative financial resources available to the State or 
political subdivisions or instrumentalities thereof w^hich seek to 
undertake the project; 
(4) the importance of the project or class of projects in relation 
to other projects or classes of projects which may be in competi-
tion for the same funds; 
(5) the prospects that the project, on a continuing rather than 
a temporary basis, will improve the opportunities for employment, 
the average level of income, or the economic and social develop-
ment of the area served by the project. 
REGIONAL TECHNICAL AND P L A N N I N G ASSISTANCE 
SEC. 505. (a) The Secretary is authorized to provide to the com-
missions technical assistance which would be useful in aiding the 
commissions to carry out their functions under this Act and to develop 
recommendations and programs. 
Such assistance shall include studies 
and plans evaluating the needs of, and developing potentialities for. 
79 STAT. ] 
PUBLIC LAW 89-136-AUG. 26, 1965 
567 
economic growth of such region, and research on improving the con-
servation and utilization of the human and natural resources of the 
region. 
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 Govern-
ment, or 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 the commissions. 
The Secretary, in his discretion, may require the repayment of assist-
ance provided under this subsection and prescribe the terms and con-
ditions of such repayment. 
(b) For the period ending on June 80 of the second full Federal ^/^^^''^^ ^^^'^ 
Mscal year following the date of establisliment of a commission, the 
administrative expenses of each commission as approved by the Secre-
tary shall be paid by the Federal Government. 
Thereafter, not to 
exceed 50 per centum of such expenses may be paid by the Federal 
Government. 
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. 
(c) There is hereby authorized to be appropriated $15,000,000 for 
Appropriation. 
the fiscal year ending June 30, 1966, and for each fiscal year there-
after through the fiscal year ending June 80, 1970, for the purposes of 
this section. 
ADMINISrRATIVE POWERS OF REGIONAL 
COMMISSIONS 
SEC. 506. To carry out its duties under this Act, each regional 
commission is authorized to— 
(1) adojit, amend, and repeal bylaws, rules, and regulations 
governing the conduct of its business and the performance of its 
functions; 
(2) appoint and fix the compensation of an executive dii-ector 
and such other personnel as may be necessary to enable the com-
mission to carry out its functions, except that such compensation 
shall not exceed the salary of the alternate to the Federal cochair-
man on the commission and no member, alternate, officer, or 
employee of such commission, other than the Federal cochairman 
on the commission and his staff and his alternate, and Federal 
employees detailed to tlie commission under clause (8), shall be 
deemed a Federal employee for any purpose; 
(8) request the head of any Federal department or agency (who 
is hereby so authorized) to detail to temporary duty with the 
commission such personnel within his administrative jurisdiction 
as the commission may need for carrying out its functions, each 
such detail to be without loss of seniority, pay, or other employee 
status; 
(4) arrange for the services of personnel from any State or 
local government or any subdivision or agency thereof, or any 
intergovernmental agency; 
(5) make arrangements, including contracts, with any partici-
pating State government for inclusion in a suitable retirement 
and employee benefit system of such of its personnel as may not 
be eligible for, or continue in, another governmental retirement 
or employee benefit system, or otherwise provide for such cover-
age of its personnel, and the Civil Service Commission of the 
T^'nited States is authorized to contract Avith such commission for 
continued coverage of commission employees, who at date of 
568 
PUBLIC LAW 89-136-AUG. 26, 1965 
[79 STAT. 
commission employment are Federal employees, in the retirement 
program and other employee benefit programs of the Federal 
Government; 
(6) accept, use, and dispose of gifts or donations of services or 
property, real, personal, or mixed, tangible or intangible; 
(7) enter into and perform such contracts, leases, 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 or with any State, or any political subdivision, agency, or 
instrumentality thereof, or with any person, firm, association, or 
corporation; 
(8) maintain an office in the District of Columbia and establish 
field offices at such other places as it may deem appropriate; and 
(9) take such other actions and incur such other expenses as 
may be necessary or appropriate. 
INFORMATION 
SEC. 507. In order to obtain information needed to carry out its 
duties, each regional commission shall— 
(1) hold such hearings, sit and act at such times and places, 
take such testimony, receive such evidence, and print or otherwise 
reproduce and distribute so much of its proceedings and reports 
thereon as it may deem advisable, a cochairman of such commis-
sion, or any member of the commission designated by the commis-
sion for the purpose, being hereby authorized to administer oaths 
when it is determined by the commission that testimony shall be 
taken or evidence received under oath; 
(2) arrange for the head of any Federal, State, or local depart-
ment or agency (who is hereby so authorized, to the extent not 
otherwise prohibited by law) to furnish to such commission such 
information as may be available to or procurable by such depart-
ment or agency; and 
K«<=°''ds. 
(3) keep accurate and complete records of its doings and trans-
actions which shall be made available for public inspection. 
PERSONAL FINANCIAL INTERESTS 
SEC. 508. (a) Except as permitted by subsection (b) hereof, no 
State member or alternate and no officer or employee of a regional 
commission shall participate personally and substantially as member, 
alternate, officer, or employee, through decision, approval, disapproval, 
recommendation, the rendering of advice, investigation, or otherwise, 
in any proceeding, application, request for a ruling or other determi-
nation, contract, claim, controversy, or other particular matter in 
which, to his knowledge, he, his spouse, minor child, partner, orga-
nization (other than a State or political subdivision thereof) in which 
he is serving as officer, director, trustee, partner, or employee, or any 
person or organization with whom he is serving as officer, director, 
trustee, partner, or employee, or any person or organization with whom 
he is negotiating or has any arrangement concerning prospective 
Penalty. 
employment, has a financial interest. 
Any person who shall violate 
the provisions of this subsection shall be fined not more than $10,000, 
or imprisoned not more than two years, or both. 
(b) Subsection (a) hereof shall not apply if the State member, 
alternate, officer, or employee first advises the regional commission 
involved of the nature and circumstances of the proceeding, applica-
tion, request for a ruling or other determination, contract, claim, 
controversy, or other particular matter and makes full disclosure of 
79 STAT. ] 
PUBLIC LAW 89-136-AUG. 26, 1965 
569 
the financial interest and receives in advance a written determination 
made by such commission that the interest is not so substantial as to 
be deemed likely to affect the integrity of the services which the 
commission may expect from such State member, alternate, officer, 
or employee. 
(c) No State member of a regional commission, or his alternate, 
shall receive any salary, or any contribution to or supplementation 
of salary for his services on such commission from any source other 
than his State. 
No person detailed to serve a regional commission 
under authority of clause (4) of section 506 shall receive any salary 
or any contribution to or supplementation of salary for his services 
on such commission from any source other than the State, localj or 
intergovernmental department or agency from which he was detailed 
or from such commission. 
Any person who shall violate the provi-
sions of this subsection shall be fined not more than $5,000, or im-
prisoned not more than one year, or both. 
(d) NotAvithstanding any other subsection of this section, the Fed-
eral cochairman and his alternate on a regional commission and any 
Federal officers or employees detailed to duty with it pursuant to 
clause (3) of section 10 shall not be subject to any such subsection 
but shall remain subject to sections 202 through 209 of title 18, United 
States Code. 
(e) A regional commission may, in its discretion, declare void and 
rescind any contract or other agreement pursuant to the Act in relation 
to which it finds that there has been a violation of subsection (a) or 
(c) of this section, or any of the provisions of sections 202 through 209, 
title 18, United States Code. 
Penalty. 
Conflict-of-
interest. 
76 Stat. 1121. 
AXNUAL REPORTS 
SEC. 509. Each regional commission established pursuant to this 
Act shall make a comprehensive and detailed annual report each 
fiscal year to the Congress with resj^ect to such commission's activities 
and recommendations for programs. 
The first such report shall be 
made for the first fiscal year in which such commission is in existence 
for more than three months. Such reports shall be printed and trans-
mitted to the Congress not later than January 81 of the calendar 
year following the fiscal year Avith respect to which the report is made. 
TITLP: 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 
lieretofore or subsequent to this Act. 
The Assistant Secretary created 
by this section shall be apjpointed by the President by and with the 
advice and consent of the Senate and shall be compensated at the rate 
provided for level IV of the Federal Executive Salary Schedule. 
Such Assistant Secretary shall perform such functions as the Secre-
tarv may prescribe. There shall be appointed by the President, by 
and with the advice and consent of the Senate, an Administrator for 
Economic Develoj^ment who shall be compensated at the rate pro-
vided 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 308 of the Federal 
Executive Salary Act of 1964 is amended by striking out "(4)'' and 
inserting in lieu thereof "(5)". 
Assistant Secre-
tary of Commerce, 
appointment. 
78 Stat. 417. 
5 u s e 2211. 
Administrator 
for Economic 
Development,, 
appointment. 
49-850 0-66—39 
5 use 2211. 
570 
PUBLIC LAW 89-136-AUG. 26, 1965 
[79 STAT. 
(c) Subsection (e) of section 303 of the Federal Executive Salary 
^s^^stat^ 417. 
^(,^ Qf ^954. jg 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 under-
employment. 
(b) The Secretary may make provision 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. 
TITLE VII—MISCELLANEOT^S 
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 he 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 statis-
tics needed to carry out the purposes of this Act; and each depart-
ment, bureau, agency, board, commission, office, establishment or 
instrumentality is authorized to furnish such information, sug-
gestions, 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 dis-
cretion and upon such terms and conditions and for such consider-
ation 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 evi-
dences 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 
79 STAT. ] 
PUBLIC LAW 89-136-AUG. 26, 1965 
571 
Act, for additional periods not to exceed ten years, if sucli exten-
sion 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 8709 of the Revised Statutes, as amended (41 T'.S.C. 5), 
shall not apply to any contract of hazard insurance or to any 
purchase or contract for services or supplies on account of prop-
erty obtained by the Secretary as a result of loans made or evi-
dences of indebtedness purchased under this Act if the premium 
therefor or the amount thereof does not exceed $1,000. Tlie 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 
])ersonal property or any interest therein acquired by the Secre-
tary 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, per-
sonal, or mixed, tangible or intangible), whenever deemed neces-
sary 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 con-
tract, 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 
so stat. sio. 
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 subsist-
ence) as authorized by section 5 of such Act (5 U.S.C. 73li-2) for 75^staS39°3'4o. 
persons in the Government service employed intermittently, while 
so employed: Provided, hmrever, That contracts for such employ-
ment 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. 
75 Stat. 47. 
42 u s e 2501 
note. 
572 
PUBLIC LAW 89-136-AUG. 26, 1965 
[79 STAT. 
Nothing herein shall be construed to except the activities under 
this Act from the application of sections 507(b) and 2679 of title 
62 statg^ 910, 
28, United States Code, and of section 367 of the Revised Statutes 
539! 
' 
(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 of services or 
facilities, when there is not sufficient demand for such goods, mate-
rial, commodities, services, or facilities, to employ the efficient capacity 
of existing competitive commercial or industrial enterprises. 
SAVING PROVISIONS 
SEC. 703. (a) No suit, action, or other proceeding lawfully com-
menced by or against the Administrator or any other officer of the 
Area Redevelopment Administration in his official capacity or in rela-
tion to the discharge of his official duties under the Area Redevelop-
ment 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 ne-
cessity 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 against 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, dele-
gations, 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, authoriza-
tions, 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, 
42 use 2525. 
an(j authorities under section 29(c) of the Area Redevelopment Act 
are hereby vested in the Secretary. 
ist^ati"^ d^lT^"' 
(^) ^^^ President may designate a person to act as Administrator 
nation.' 
' ' 
uudcT this Act uutil 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, whichever shall first occur. While so acting such 
person shall receive compensation at the rate provided by this Act 
for such office. 
79 STAT. ] 
PUBLIC LAW 89-136-AUG. 26, 1965 
(c) Tlie provisions of tliis Act shall take eii'ect upon enactment 
unless herein explicitly 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 considera-
tion by the Secretary for such assistance under the provisions of this 
Act as he may determine to be appropriate. 
(e) Xo financial assistance authorized under this Act shall be used 
to finance the cost of facilities for the generation, transmission, oi 
distribution of electric energy, except on projects specifically author 
ized by the Congress, or to finance the cost of facilities for the produc-
tion or transmission of gas (natural, manufactured, or mixed). 
573 
Effective date. 
Pending project 
applications. 
SEPARABILITY 
SEC. 705. Xotwithstanding any other evidence of the intent of Con-
gress, 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 jurisdic-
tion to be invalid, such judgment shall not affect, impair, or invalidate 
the remainder of this Act or its application to other persons and cir-
cumstances, 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 
"L^nited States*' include the several States, the District of Columbia, 
the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and 
American Samoa. 
ANNUAL 
R E P O R T 
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 Avitli the fiscal year ending June 30, 1966. 
Such I'eport shall be printed and shall be transmitted to the Congress 
not later than January 3 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 under this Act as he may 
deem appropriate, and to authorize the redelegation of such func-
tions, 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 authorizeid 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 Avhich they are specifically 
authorized and appropriated. 
574 
PUBLIC LAW 89-136-AUG. 26, 1965 
[79 STAT. 
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. 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 willfully overvalues any security, for the purpose of ob-
taining for himself or for any applicant any financial assistance under 
section 101, 201, 202, or 403 or any extension thereof by renewal, 
deferment or action, or otherwise, or the acceptance, release, or substi-
tution 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 pun-
ished 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 order or issues, puts forth, or assigns any note, debenture, 
bond, or other obligation, or draft, bill of exchange, mortgage, judg-
ment, or decree thereof, or (3) with intent to defraud participates or 
shares in or receives directly or indirectly any money, profit, prop-
erty, or benefit through any transaction, loan, grant, commission, con-
tract, or any other act of the Secretary, or (4) gives any unauthor-
ized information concerning any future action or plan of the Secre-
tary which might affect the value of securities, or having such knowl-
edge 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. 
E M P L O Y M E N T O F EXPEDITERS A N D 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 ren-
79 STAT. ] 
PUBLIC LAW 89-136-AUG. 26, 1965 
575 
dered, 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 similar 
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 
49stat. loii; 
under section 101, 201, 202, or 403 for such a project without first 
obtaining adequate assurance that these labor standards will be main-
tained upon the construction work. 
The Secretary of Labor shall 
have, with respect to the labor standards specified in this provision, 
the authority and functions set forth in Reorganization Plan Num-
bered 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). 
" ^'^'- los. 
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 sliall 
be kept available for public inspection during the regular 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 applica-
tions, 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 the loan 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 
m connection with which such assistance is given or used, and the 
amount and nature of that portion of the cost of the project or under-
taking supplied by other sources, and such other records as will facil-
itate 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, docu-
ments, papers, and records of the recipient that are pertinent to assist-
ance received under this Act. 
CONFORMING 
AMENDMENT 
SEC. 715. All benefits heretofore specifically 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 Secretary as "redevelopment areas" under section 5 
of the Area Redevelopment Act, are hereby also extended, insofar as 
^^ ^*^*' "
*
^
-
r 
J 
J 
» 
42 u s e 2504. 
576 
PUBLIC LAW 89-137-AUG. 26, 1965 
[79 STAT. 
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. 
Approved August 26, 1965. 
August 26, 1965 
[H. R. 206] 
Public Law 89-137 
AN ACT 
To provide a realistic cost-of-living increase in rates of subsistence allowances 
paid to disabled veterans pvirsning vocational rehabilitation training. 
lowance, increase 
72 Stat. 1172. 
Be it enacted hy the Senate and Hou^ie of Representatives 
of the 
subsis"enci"a"' ^''^^t^^ Stutes of America In Congress assembled, That (a) section 
1504 of title 38, LTnited States Code, is amended by deleting subsec-
tion (c) thereof, redesignating subsection " ( d ) " as "(c)" and by 
amending subsection (b) to read as follows: 
"(b) The subsistence allowance of a veteran-trainee is to be deter-
mined in accordance with the following table, and shall be the monthly 
amount shown in column II, III, or TV (whichever is applicable as 
determined by the veteran's dependency status) opposite the appro-
priate type of training as specified in column I : 
72 Stat. 1121; 
74 Stat. 165. 
38 u s e 1501-
1510. 
Effective date. 
"Column I 
Type of training 
Institutional on-farm, apprentice or other on-job training 
Column II 
No 
dependents 
$110 
95 
Column III 
One 
dependent 
$150 
125 
Column IV 
Two 01 more 
dependents 
$175 
150 
Where any trainee has more than two dependents and is not eligible to 
receive additional compensation as provided by section 315 or section 
335 (whichever is applicable) of this title, the subsistence allowance 
prescribed in column IV of the foregoing table shall be increased by 
an additional $5 per month for each dependent in excess of two." 
(b) Section 315 of title 38, United States Code, is amended by 
deleting " ( a ) " and subsection (b) thereof. 
(c) Any veteran-trainee receiving subsistence allowance on the date 
of the enactment of this Act while pursuing a course of vocational 
rehabilitation authorized by chapter 31 of title 38, United States Code, 
shall not have such allowance reduced by reason of the amendments 
contained in such Act. 
S>:c. 2. The foregoing provisions of this Act shall become effective 
on the first day of the second calendar month which begins following 
the date of enactment of this Act. 
Approved August 26, 1965.