An Act to establish an effective program to alleviate conditions of substantial and persistent unemployment and underemployment in certain economically distressed areas.
PL 87-27 (S.1), enacted 05/01/1961

75 
S T A T . ] 
PUBLIC LAW 87-27-MAY 1, 1961 
47 
"(d) Eacli alternate member clesignated under subsection (c) of this 
section shall be designated to serve as such by and with the advice and 
consent of the Senate unless at the time of his designation he holds 
an office in the Federal Government to which he was appointed by and 
with the advice and consent of the Senate. 
"(e) It shall be the function of the Council to advise and assist the 
President, as he may request, with respect to the performance of func-
tions in the aeronautics and space field, including the following 
functions: 
"(1) survey all significant aeronautical and space activities, 
including the policies, plans, programs, and accomplishments of 
all departments and agencies of the United States engaged in such 
activities; 
"(2) develop a comprehensive program of aeronautical and 
space activities to be conducted by departments and agencies of the 
United States; 
"(3) designate and fix responsibility for the direction of major 
aeronautical and space activities; 
"(4) provide for effective cooperation among all departments 
and agencies of the United States engaged in aeronautical and 
space activities, and specify, in any case in which primary respon-
sibility for any category of aeronautical and space activities has 
been assigned to any department or agency, which of those 
activities may be carried on concurrently by other departments 
or agencies; and 
"(5) resolve ditferences 
arising 
among departments 
and 
agencies of the United States with respect to aeronautical and 
space activities under this Act, including differences as to whether 
a particular project is an aeronautical and space activity." 
(b) Subsection (g) of the said section 201 is hereby repealed. 
Approved April 25, 196L 
Fun<;:tions. 
Repeal, 
May 1, 1961 
[S. 1] 
Public Law 87-27 
AN ACT 
To establish an effective program to alleviate conditions of substantial and 
persistent unemployment and underemployment in certain economically 
disti'essed areas. 
Be it enacted hy the Senate amd House of Representatives 
of the 
United States of America in Congress assembled, That this Act may 
^^^ Redevelop-
be cited as the "Area Redevelopment Act". 
"**"* ^
*
=
*
-
DECLARATION 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 communities are suffering substantial and 
persistent unemployment and underemployment; that such unemploy-
ment and underemployment cause hardship to many individuals and 
their families and detract from the national welfare by wasting vital 
human resources; that to overcome this problem the Federal Govern-
ment, in cooperation with the States, should help areas of substantial 
and persistent unemployment and underemployment to take effective 
steps in planning and financing their economic redevelopment; that 
Federal assistance to communities, industries, enterprises, and indi-
viduals in areas needing redevelopment should enable such areas to 
48 
PUBLIC LAW 87.27-MAY 1, 1961 
[75 ST A T , 
achieve lasting improvement and enhance the domestic prosperity by 
the establishment of stable and diversified local economies and 
improved local living conditions; and that under the provisions of 
this Act new employment opportunities should be created by develop-
ing and expanding new and existing facilities and resources rather 
than by merely transferring jobs from one area of the United States 
to another. 
AREA REDEVELOPMENT 
ADMINISTRATOR 
SEC. 3. There shall be appointed by the President, by and with the 
advice and consent of the Senate, an Area Redevelopment Adminis-
trator in the Department of Commerce who shall receive compensa-
tion at a rate equal to that received by Assistant Secretaries of Com-
merce. The Administrator shall perform such duties in the execution 
of this Act as the Secretary of Commerce (hereinafter referred to as 
the "Secretary") may assign. 
National 
Public 
A d v i s o r y 
Com-
mittee on Area Re-
development. 
ADVISORY POLICY BOARD 
SEC. 4. (a) To advise the Secretary in the performance of func-
tions authorized by this Act, there is created an Area Redevelopment 
Advisory Policy Board (hereinafter referred to as the "Board"), 
which shall consist of the following members, all ex officio: the Secre-
tary as Chairman; the Secretaries of Agriculture; Health, Education, 
and Welfare; Interior; Labor; and Treasury; and the Administrators 
of the Housing and Home Finance Agency and the Small Business 
Administration. 
The Chairman may from time to time invite the 
participation of officials of other agencies of the executive branch 
interested in the functions herein authorized. 
Each member of the 
Board may designate an officer of his agency to act for him as a member 
of the Board with respect to any matter there considered. 
(b) The Secretary shall appoint a National Public Advisory Com-
mittee on Area Redevelopment which shall consist of twenty-five mem-
bers 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 sub-
committee 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. 
(c) The Secretary is authorized from time to time to call together 
and confer with any persons, including representatives of labor, man-
agement, agriculture, and government, who can assist in meeting the 
problems of unemployment or underemployment in the several areas 
designated by the Secretary as redevelopment areas. 
standards. 
REDEVELOPMENT AREAS 
SEC. 5. (a) The Secretary shall designate as "redevelopment areas" 
those areas within the United States in which he determines, upon 
the basis of standards generally comparable with those set forth in 
paragraphs (1) and (2), that there has existed substantial and per-
sistent unemployment for an extended period of time. 
There shall 
be included among the areas so designated any area— 
75 S T A T . ] 
PUBLIC LAW 87-27-MAY 1, 1961 
49 
(1) where the Secretary of Labor finds that the rate of unem-
ployment, excluding unemployment due primarily to temporary 
or seasonal factors, is currently 6 per centum or more and has 
averaged at least 6 per centum for the qualifying time periods 
specified in paragraph (2); and 
(2) where the Secretary of Labor finds that the annual average 
rate of unemployment has been at least— 
(A) 50 per centum above the national average for three 
of the preceding four calendar years, or 
(B) 75 per centum above the national average for two of 
the preceding three calendar years, or 
(C) 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. 
(b) The Secretary sliall also designate as "redevelopment areas" 
those areas (including Indian reservations) within the United States 
which do not meet the requirements set forth in subsection (a) but 
which he determines are among the highest in numbers and percentages 
of low-income families, and in which there exists a condition of sub-
stantial and persistent unemployment or underemployment. 
In 
making the designations under this subsection and before extending 
any financial assistance as the result of designations under this sub-
section, the Secretary shall, by regulation,.prescribe detailed standards 
upon which the designations under this subsection shall be based. 
In 
tlie formulation of such standards the Secretary shall consider, among 
other relevant factors, the number of low-income farm families in the 
various rural areas of the United States, the proportion that such low-
income families are of the total farm families of each of such areas, 
the relationship of the income levels of the families in each such area 
to the general levels of income in the United States, the extent to 
which "rural development" projects have previously been located in 
any such area under programs administered by the Department of 
Agriculture, the current and prospective employment opportunities 
in each such area, the availability of manpower in each such area for 
supplemental employment, the extent of migration out of the area, 
and the proportion of the population of each such area which has been 
receiving public assistance from the Federal Government or from tlie 
State or States in which such area is located or from any municipality 
therein. 
In making the designations under this subsection, the Sec-
retary shall endeavor to distribute the projects widely among the sev-
eral States, so far as is feasible and proper, in order that actual 
experience with this program may be had in as many States and in as 
many areas and under as many different circumstances as possible. 
In making these determinations the Secretary shall be guided, but 
studies, 
not conclusively governed, by pertinent studies made, and information 
and data collected or compiled, by (1) departments, agencies, and 
instrumentalities of the Federal Government, (2) State and local 
governments, (3) universities and land-grant colleges, and (4) private 
organizations. 
(c) Upon the recpiest of the Secretary, the Secretary of Labor, the 
Secretary of Agriculture, the Secretary of the Interior, and such other 
heads of agencies as may be appropriate are authorized to conduct 
50 
PUBLIC LAW 87-27-MAY 1, 1961 
[75 ST A T . 
"Redevelopment 
area." 
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 sub-
section (b) of this section. 
The Secretary shall reimburse when 
appropriate, out of any funds appropriated to carry out the purposes 
of this Act, the foregoing officers for any expenditures incurred by 
them under this section. 
(d) As used in this Act, the term "redevelopment area" refers to 
any area within the United States which has been designated by the 
Secretary as a redevelopment area. 
Limitations. 
LOANS AND PARTICIPATIONS 
SEC. 6. (a) The Secretary is authorized to purchase evidences 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, in cases of demonstrated need, machinery 
and equipment) for industrial or commercial usage, including the 
construction of new buildings, the rehabilitation of abandoned or unoc-
cupied buildings, and the alteration, conversion, or enlargement of 
existing buildings. Such financial assistance shall not be extended (1) 
for working capital, or (2) to assist establishments relocating from 
one area to another. The limitation set forth in clause (2) shall not 
be construed to prohibit assistance for the expansion of an existing 
business entity through the establishment of a new branch, affiliate, 
or subsidiary of such entity if the Secretary finds that the establish-
ment of such branch, affiliate, or subsidiary will not result in an 
increase in unemployment in the area of original location or in any 
othei' area where such entity conducts business operations, unless the 
Secretary has reason to believe that such branch, affiliate, or sub-
sidiary 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. 
(b) Financial assistance under this section shall be on such terms 
and conditions as the Secretary determines, subject, however, to 
the following restrictions and limitations: 
(1) The total amount of loans (including purchased evidences 
of indebtedness) outstanding at any one time under this sec-
tion (A) with respect to projects in redevelopment areas desig-
nated under section 5(a) shall not exceed $100,000,000 and (B) 
with respect to projects in redevelopment areas designated under 
section 5(b) shall not exceed $100,000,000. 
(2) Such assistance shall be extended only to applicants, both 
private and public (including Indian tribes), which have been 
approved for such assistance by an agency or instrumentality 
of the State or political subdivision thereof in which the proj-
ect 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 
75 S T A T . ] 
PUBLIC LAW 87.27-MAY 1, 1961 
51 
alleviation of unemployment or underemployment within the 
redevelopment area wherein it is, or will be, located. 
(4) No such assistance shall be extended hereunder unless 
the financial assistance applied for is not otherwise available 
from private lenders or other Federal agencies on reasonable 
terms. 
(5) The Secretary shall not make any loan without a par-
ticipation unless he determines that the loan cannot be made 
on a participation basis. 
(6) No evidences of indebtedness shall be purchased and no 
loans shall be made unless it is determined that there is a rea-
sonable assurance of repayment. 
(7) Subject to section 12(5) of this Act, no loan, including p^j^j ^™""' ^°^'' 
renewals or extension thereof, may be made hereunder for a period 
exceeding twenty-five years and no evidences of indebtedness 
maturing more than twenty-five years from date of purchase may 
be purchased hereunder: Provided, That the foregoing restric-
tions 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 equal to the rate 
of interest paid by the Secretary on funds obtained from the Sec-
retary of the Treasury as provided in section 9(a) of this Act, 
plus one-half of 1 per centum per annum to cover administrative 
expenses and to provide for losses on loans made and evidences 
of indebtedness purchased under this section. 
(9) Such assistance shall not exceed 65 per centum of the aggre-
gate cost to the applicant (excluding all other Federal aid in 
connection with the undertaking) of acquiring or developing 
land and facilities (including, in cases of demonstrated need, ma-
chinery and equipment), and of constructing, altering, convert-
ing, rehabilitating, or enlarging the building or buildings of the 
particular project, and sliall, among others, be on the condition 
that— 
(A) other funds are available in an amount wliich, together 
with the assistance provided hereunder, shall be sufficient to 
pay such aggregate cost; 
(B) not less than 10 per centum of such aggregate cost be 
supplied by the State or any agency, instrumentality, or 
political subdivision thereof, or by an Indian tribe or a com-
munity or area organization which is nongovernmental in 
character, as equity capital or as a loan repayable only after 
the Federal financial assistance extended under this section 
has been repaid in full according to the terms thereof and, 
if such a loan is secured, its security shall be subordinate and 
inferior to the lien or liens securing such Federal financial 
assistance; 
(C) in extending financial assistance under this section 
with respect to a redevelopment area, the Secretary sluiU 
require that not less than 5 per centum of the aggregate cost 
52 
PUBLIC LAW 87-27-MAY 1, 1961 
[75 ST A T , 
of the project for which such assistance is extended shall be 
supplied by nongovernmental sources as equity capital or as 
a loan repayable only after the Federal financial assistance 
extended under this section has been repaid in full according 
to the terms thereof and, if such a loan is secured, its security 
shall be subordinate and inferior to the lien or liens securing 
such Federal financial assistance; and 
(D) 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 otherAvise pro-
vided in subparagraphs (B) and (C), any Federal financial 
assistance extended under this section may be repayable only 
after other loans made in connection with such project have 
been repaid in full, and the security, if any, for such Federal 
financial assistance may be subordinate and inferior to the 
lien or liens securing other loans made in connection with the 
same project. 
(10) No such assistance shall be extended unless there shall be 
submitted to and apj>roved 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 subdivi-
sion thereof, that the project for which financial assistance is 
sought is consistent with such progiam: Provided^ That nothing 
in this Act shall authorize financial assistance for any pia^ect 
prohibited by laws of the State or local political subdivision in 
which the ])roject would be located. 
LOANS FOR rUBLIC 
rAClLITIES 
SEC. 7. (a) Upon tlie application of any State, or political subdivi-
sion thereof, Indian tribe, or private or public nonprofit organization 
or association representing any redevelopment area or part thereof, 
the Secretary is authorized to make loans to assist in financing the 
purchase or development of land for public facility usage, and the 
construction, rehabilitation, alteration, expansion, or improvement of 
public facilities, within a redevelopment area, if he finds that— 
(1) the project for which financial assistance is sought will 
tend to improve the opportunities, in the redevelopment area 
where such project is or will be located, for the successful estab-
lishment or expansion of industrial or conmiercial j)lants or 
facilities which will provide more than a temporary alleviation 
of unemployment or underemployment in such area; 
(2) the funds requested for such project are not otherwise 
available on reasonaule terms; 
(3) the amount of the loan plus the amount of other available 
funds for such project are adequate to insure the completion 
tliereof; 
(4) there is a reasonable expectation of repayment; and 
(5) such area has an approved economic development program 
as provided in section 6(b) (10) and the project for w'hich 
financial assistance is sought is consistent with such program. 
(b) Subject to section 12(5), the maturity date of any such loan 
shall be not later than forty years after the date such loan is made. 
Any such loan shall bear interest at a rate equal to the rate of interest 
[)aid by the Secretary on funds obtained from the Secretary of the 
Treasury as provided in section 9(a) of this Act, plus one-quarter of 
I per centum per annum. 
Limitation. 
(
^
^
.
^ 'pjjg, total amouut of loans outstanding at any one time under 
this section shall not exceed $100,000,000. 
Conditions 
for 
loans. 
76 S T A T . 1 
PUBLIC LAW 8T-27-MAY 1, 1961 
53 
(d) No financial assistance shall be extended under this section with 
respect to any public 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 regulatory body, 
unless the State regulatory body determines that in the area to be 
served by the public 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 future needs) which the existing 
public utility is not able to meet through its existing facilities or 
through an expansion Avhich it agrees to undertake. 
be 
GRANTS FOR PUBLIC FACILITIES 
SEC. 8. (a) Upon the application of any State, or political subdi-
vision thereof, Indian tribe, or private or public nonprofit organization 
or association representing any redevelopment area or part thereof, the 
Secretary is authorized to make grants for land acquisition or devel-
opment for public facility usage, and the construction, rehabilitation, 
alteration, expansion, or improvement of public facilities, within a 
redevelopment area, if he finds that— 
(1) the project for which financial assistance is sought will 
tend to improve the opportunities, in the redevelopment area 
where such project is or will be located, for the successful estab-
lishment or expansion of industrial or commercial plants or fa-
cilities which will provide more than a temporary alleviation of 
unemployment or underemployment in such area; 
(2) the entity requesting the grant proposes to contribute to 
the cost of the project for which such grant is requested in propor-
tion to its ability so to contribute; 
(3) the project for which a grant is requested will fulfill a 
)ressing need of the area, or part thereof, in which it is, or will 
)e, located, and there is little probability that such project can 
be undertaken without the assistance of a grant under this sec-
tion; and 
(4) the area for which a project is to be undertaken has an ap-
proved economic development program as provided in section 
6(b) (10) and such project is consistent with such program. 
The amount of any grant under this section for any such project 
shall not exceed the difference between the funds which can be practi-
cably obtained from other sources (including a loan under section 7 
of this Act) for such project, and the amount which is necessary to 
insure the completion thereof. 
(b) The Secretary shall by regulation provide for the supervision 
of projects with respect to which grants are made under this section 
so as to insure that Federal funds are not wasted or dissipated. 
(c) No financial assistance shall be extended under this section with 
respect to any public 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 regulatory body, unless the 
State regulatory body determines that in the area to be served by the 
public 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 future needs) which the existing public utility 
is not able to meet through its existing facilities or through an ex-
pansion which it agrees to undertake. 
(d) There is hereby authorized to be appropriated not to exceed 
$75,000,000 for the purpose of making grants under this section. 
Conditions 
f o r 
grants. 
Supervision. 
Appropriation. 
54 
PUBLIC LAW 87.27-MAY 1, 1961 
[75 ST A T , 
AREA REDEVELOPMENT FUND 
Interest rates. 
SEC. 9. (a) To obtain funds for the purpose of extending financial 
assistance under sections 6 and 7, the Secretary may, with the ap-
proval of the President, issue and have outstanding at any one 
time notes and obligations for purchase by the Secretary of the 
Treasury in an amount not to exceed $300,000,000. 
Such notes or 
other obligations shall be in such forms and denominations, have 
such maturities, and be subject to such terms and conditions as 
may be prescribed by the Secretary with the approval pf the Sec-
retary of the Treasury. Any such notes or other obligations which 
are issued by the Secretary to raise funds for financial assistance 
under section 6 shall bear interest at a rate determined by the Secre-
tary of the Treasury, but such rate shall not be greater than the 
current average yields on outstanding marketable obligations of 
the United States of comparable maturities as of the last day of the 
month preceding the issuance of such notes or other obligations. 
Any 
such notes or other obligations which are issued by the Secretary 
to raise funds for financial assistance under section 7 shall bear 
interest at a rate determined by the Secretary of the Treasury which 
shall be not more than the higher of (1) 21/^ per centum per annum, 
or (2) the average annual interest rate on all interest-bfearing obli-
gations of the United States then forming a part of the public debt 
as computed at the end of the fiscal year next preceding the issuance 
by the Secretary and adjusted to the nearest one-eighth of 1 per 
centum. The Secretary of the Treasury is authorized and directed 
to purchase any notes and other obligations issued under this section 
and for such purpose is authorized to use as a public debt transaction 
the proceeds from the sale of any securities issued under the Second 
31 use 7
^
7
*
/
* 
Liberty Bond Act, as amended, and the purposes for which securi-
ties may be issued under such Act are extended to include any purchase 
of such notes and other obligations. The Secretary of the Treasury 
may at any time sell any of the notes or other obligations acquired 
by him under this section. 
All redemptions, purchases, and sales 
by the Secretary of the Treasury of such notes or other obligations 
shall be treated in every respect as public debt transactions of the 
United States. 
(b) Funds obtained by the Secretary under subsection (a) shall 
be deposited in an area redevelopment 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 financial assistance under sections 6 and 7 and for 
the payment of all obligations and expenditures arising therefrom. 
Receipts arising from the programs of assistance under sections 6 
and 7 shall be credited to the fund. 
Any moneys in the fund deter-
mined by the Secretary to be in excess of current needs shall be paid 
into the Treasury as miscellaneous receipts, 
tirement^^an'd^dil- 
(c) The fuud shall coutribute to the civil service retirement and 
ability fund. 
disability fund a sum as provided by section 4(a) of the Civil Service 
70 Stat. 747. 
Retirement Act (5 U.S.C. 2254(a)), except that such sum shall be 
determined by applying to the total basic salaries (as defined in that 
Act) paid to employees performing activities authorized under sec-
tions 6 and 7 of this Act and covered by that Act the per centum rate 
determined annually by the Civil Service Commission to be the excess 
of the total normal cost per centum rate of the civil service retirement 
system over the employee deduction rate specified in such section 4(a). 
The fund shall also pay into the Treasury as miscellaneous receipts 
that portion of the cost of administration of the civil service retire-
ment and disability fund attributable to employees performing activi-
59 Stat. 598. 
31 u s e 847-849. 
75 S T A T . ] 
PUBLIC LAW 87-27-MAY 1, 1961 
^^ 
ties authorized under sections 6 and 7 of this Act, as determined by the 
Civil Service Commission. 
(d) In the performance of and with respect to the functions, 
powers, and duties vested in him by sections 6 and 7 of this Act, the 
Secretary shall— 
(1) prepare annually and submit a budget program in accord-
ance with the provisions of sections 102, 103, and 104 of the 
Government Corporation Control Act, as amended; and 
(2) determine the character of and the necessity for obliga-
tions and expenditures and the manner in which they shall be 
incurred, allowed, and paid, subject to provisions of law 
specifically applicable to Government corporations. 
INFORMATION 
SEC. 10. The Secretary shall aid redevelopment areas and other 
areas by furnishing to interested individuals, communities, industries, 
and enterprises within such areas any assistance, technical informa-
tion, market research, or other forms of assistance, information, or 
advice which are obtainable from the various departments, agencies, 
and instrumentalities of the Federal Government and which would be 
useful in alleviating or preventing conditions of excessive unemploy-
ment or underemployment within such areas. The Secretary shall 
furnish the procurement divisions of the various departments, agen-
cies, and other instrumentalities of the Federal Government with a 
list containing the names and addresses of business firms which are 
located in redevelopment areas and which are desirous of obtaining 
Government contracts for the furnishing of supplies or services, and 
designating the supplies and services such firms are engaged in 
providing. 
TECHNICAL ASSISTANCE 
SEC. 11. In carrying out his duties under this Act the Secretary is 
authorized to provide technical assistance which would be useful in 
alleviating or preventing conditions of excessive unemployment or 
underemployment (1) to areas which he has designated as redevelop-
ment areas under this Act, and (2) to other areas which he finds have 
substantial need for such assistance. 
Such assistance shall include 
studies evaluating the needs of, and developing potentialities for, 
economic growth of such areas. Such assistance may be provided by 
the Secretary through members of his staff or through the employment 
of private individuals, partnerships, firms, corporations, or suitable 
institutions, under contracts entered into for such purposes. Appro-
priations are hereby authorized for the purposes of this section in an 
Appropriations, 
amount not to exceed $4,500,000 annually. 
POWERS OF SECRETARY 
SEC. 12. In performing his duties under this Act, the Secretary is 
authorized to— 
(1) adopt, alter, and use a seal, which shall be judicially 
noticed; 
(2) hold such hearings, sit and act at such times and places, 
and take such testimony, as he may deem advisable; 
(3) request directly from any executive department, bureau, 
agency, board, commission, office, independent establishment, or 
instrumentality information, suggestions, estimates, and statistics 
needed to carry out the purposes of this Act; and each depart-
ment, bureau, agency, board, commission, office, establishment, or 
56 
PUBLIC LAW 87.27-MAY 1, 1961 
[75 ST AT 
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 other^yise dispose of for cash or credit, in his 
discretion and upon such terms and conditions and for such con-
sideration as he shall determine to be reasonable, any evidence of 
debt, contract, claim, personal property, or security assigned to 
or held by him in connection with loans made or evidences of 
indebtedness purchased under this Act, and collect or compromise 
all obligations assigned to or held by him in connection with such 
loans or evidences of indebtedness until such time as such obliga-
tions may be referred to the Attorney General for suit or 
collection; 
(5) further extend the maturity of or renew any loan made or 
evidence of indebtedness purchased under this Act, beyond the 
periods stated in such loan or evidence of indebtedness or in this 
Act, for additional periods not to exceed ten years, if such exten-
sion or renewal will aid in the orderly liquidation of such loan or 
evidence of indebtedness; 
(0) 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 indebted-
ness purchased under this Act; 
(7) pursue to final collection, by way of compromise or other 
administrative action, prior to reference to the xVttorney 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 judg-
ments or otherwise in the case of mortgages assigned to the Sec-
retary. 
Section 3709 of the Revised Statutes, as amended (41 
U.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 pro])erty obtained by the Secretary as a result of loans made 
"^r evidences of indebtedness purchased under this Act if the 
])remium therefor or the amount thereof does not exceed $1,000. 
The power to convey and to execute, in the name of the Secretary, 
deeds of conveyance, deeds of release, assignments and satisfac-
tions of mortgages, and any other written instrument relating to 
real or personal property or any interest therein acquired by the 
Secretary pursuant to the provisions of this Act may be exercised 
by the Secretary or by any officer or agent appointed by him for 
that purpose without the execution of any express delegation of 
power or power of attorney; 
(8) acquire, in anv 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 6 and 7 of this Act; 
(9) in addition to any powers, functions, privileges, and immu-
nities otherwise vested m him, take any and all actions, including 
the procurement of the services of attorneys by contract, deter-
mined by him to be necessary or desirable in making, purchasing, 
servicing, compromising, modifying, li(:]^uidating, or otherwise 
administratively dealing with or realizing on loans made or 
evidences of indebtedness purchased under this Act. 
(10) to such an extent as he finds necessary to carry out the 
provisions of this Act, procure the temporary (not in excess of 
six months) service of experts or consultants or organizations 
62 
S t a t . 
9 10, 
984. 
75 S T A T . ] 
PUBLIC LAW 87.27-MAY 1, 1961 
57 
thereof, includiii«i: stenographic reporting services, by contract 
or appointment, and in such cases such service shall be without 
regard to the civil service and classification laws, and, except in 
the case of stenographic reporting services by organizations, 
without regard to section 3709 of the Revised Statutes (41 U.S.C. 
5) ; any individual so employed may be compensated at a rate 
not in excess of $75 per diem, and, while such individual is away 
from his home or regular place of business, he may be allowed 
transportation and not to exceed $15 per diem in lieu of subsistence 
and other expenses; 
(11) sue and be sued in any court of record of a State having 
general jurisdiction or in any United States district court, and 
jurisdiction is conferred upon such district court to determine 
such controversies without regard to the amount in controversy; 
but no attachment, injunction, garnishment, or other similar 
process, mesne or final, shall be issued against the Secretary or 
his property. 
Nothing herein shall be construed to except the 
activities under this Act from the application of sections 507(b) 
and 2679 of title 28, United States Code, and of section 367 of 
the Revised Statutes (5 U.S.C. 316); and 
(12) establish such rules, regulations, and procedures as he f^^s^ a'nd^^"Jo' 
may deem appropriate in carrying out the provisions of this Act. ced>ies. 
TERMINATION OF ELIGIBILITY FOR FURTHER ASSISTANCE 
SEC. 13. Whenever the Secretary shall determine that employment 
conditions within any area previously designated by him as a redevel-
opment area have changed to such an extent that such area is no 
longer eligible for such designation under section 5 of this Act, no 
further assistance shall be granted under this xlct with respect to such 
area and, for the purposes of this Act, such area shall not be con-
sidered a redevelopment area: Provided^ That nothing contained 
herein shall (1) prevent any such area from again being designated 
a redevelopment area under section 5 of this Act if the Secretary 
determines it to be eligible under such section, or (2) affect the valid-
ity of any contracts or undertakings with respect to such area which 
were entered into pursuant to this Act prior to a determination by 
the Secretary that such area no longer qualifies as a redevelopment 
area. 
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 Avith respect to the desig-
nation of any area. 
URBAN RENEWAL 
SEC. 14. Title I of the Housing Act of 1949, as amended, is 
fa^ilc'^Mso. 
amended by adding at the end thereof the following new section: 
i463. 
" R E D E V E L O P M E N T AREAS UNDER T H E AREA REDEVELOPMENT ACT 
"SEC. 113. (a) Whenever the Secretary of Commerce certifies to 
the Administrator (1) that any county, city, or other municipality 
(in this section referred to as a 'municipality') is situated in an area 
designated under section 5 of the Area Redevelopment Act as a re-
development area, and (2) that there is a reasonable probability that 
with assistance provided under such Act and other undeitakings the 
area will be able to achieve more than temporary improvement in 
its economy, the Administrator is authorized to provide financial as-
sistance to a local public agency in any such municipality under this 
title and the provisions of this section. 
64207 0-62—7 
58 
PUBLIC LAW 87-27-MAY 1, 1961 
[75 STAT. 
"(b) Subject to the provisions of subsection (e) of this section, 
the Administrator may provide such financial assistance under this 
section without regard to the requirement or limitations of section 
42 vie U6o' 
110(c) that the project area be predominantly residential in character 
or be redeveloped for predominantly residential uses under the urban 
renewal plan, and without regard to any of the limitations of that 
section on the undertaking of projects for predominantly nonresiden-
tial uses. 
"(c) Notwithstanding any other provision of this title, a contract 
for financial assistance under this section may include provisions 
permitting the disposition of any land in the project area designated 
under the urban renewal plan for industrial or commercial uses to 
any public agency or nonprofit corporation for subsequent disposi-
tion as promptly as practicable by such public agency or corporation 
for the redevelopment of the land in accordance with the urban re-
newal plan: Provided, That any disposition of such land to such public 
agency or corporation under this section shall be made at its fair 
value for uses in accordance with the urban renewal plan: And pro-
vided further, That only the purchaser from or lessees of such public 
agency or corporation, and their assignees, shall be required to assume 
the obligations relating to the commencement of improvements im-
tlvscuii 
posed under section 105(b) hereof. 
"(d) Following the execution of any contract for financial assist-
ance under this section with respect to any project, the Administrator 
may exercise the authority vested in him under this section as well 
as other provisions of this title for the completion of such projects, 
notwithstanding any determination made after the execution of 
such contract that the area in which the project is located is no 
longer a redevelopment area under the Area Redevelopment Act. 
"(e) Not more than 10 per centum of the funds authorized for cap-
ital grants under section 103 after the date of the enactment of the 
42 use 1453. 
Area Redevelopment Act shall be used for the purpose of providing 
financial assistance under this section. Amounts used for such pur-
pose shall not be taken into account for the purpose of the limitation 
contained in the second proviso of the fifth sentence of section 
110(c)." 
URBAN PLANNING GRANTS 
SEC. 15. (a) Paragraph (3) of section 701(a) of the Housing Act 
40 u^c 4
^
6
^
f
' 
^^ 1954: is amended by inserting after "counties which" the following: 
"(A) are situated in areas designated by the Secretary of Commerce 
under section 5(a) of the Area Redevelopment Act as redevelopment 
areas or (B)". 
(b) Section 701(b) of such Act is amended by adding before the 
period at the end of the first sentence a colon and the following: "Pr-o-
vided, That a grant may be made under this section to a city, munici-
pality, or county described in clause (A) of subsection (a) (3), or to 
a State planning agency (as provided in clause (C) of subsection 
(a) (1)) for the provision of planning assistance to such a city, munici-
pality, or county, for not more than 75 per centum of such estimated 
cost". 
OCCUPATIONAL 
TRAINING 
SEC. 16. (a) The Secretary of Labor is authorized, upon request and 
whenever he determines such studies are needed, to undertake, or to 
provide assistance to others for, studies of the size, characteristics, 
skills, adaptability, occupational potentialities, and related aspects 
of the labor force of any redevelopment area. 
75 STAT.] 
PUBLIC LAW 87-27-MAY 1, 1961 
59 
(b) When a redevelopment area has an approved economic devel-
opment program as provided in section 6(b) (10), the Secretary of 
Labor, in consultation with the Secretary and the Secretary of Agri-
culture, shall determine the occupational training or retraining needs 
of unemployed and underemployed individuals residing in the rede-
velopment area. The Secretary of Labor shall notify the Secretary 
of Health, Education, and Welfare of the occupational training or 
retraining requirements of the area, and shall provide for the orderly 
selection and referral of those unemployed or underemployed indi-
viduals residing in the area who can reasonably be expected to obtain 
employment as a result of the skill they will acquire in the training 
which is to be made available. The Secretary of Labor shall cooperate 
with the Secretary of Health, Education, and Welfare and with exist-
ing State and local agencies and officials in charge of existing programs 
relating to vocational training and retraining for the purpose of 
assuring that the facilities and services of such agencies are made fully 
available to such individuals. 
(c) Whenever the Secretary of Labor finds that additional facili-
ties or services are needed in the area to meet the occupational train-
ing or retraining needs of such individuals, he shall so advise the 
Secretary of Health, Education, and Welfare. 
The Secretary of 
Health, Education, and Welfare shall provide assistance, including 
financial assistance when necessary, to the appropriate State voca-
tional educational agency in the provision of such additional facilities 
or services. If the Secretary of Health, PMucation, and Welfare finds 
that the State vocational educational agency is unable to provide the 
facilities and services needed, he may, after consultation with such 
agency, provide for the same by agreement or contract with public or 
private educational institutions. 
(d) The Secretary of Labor shall arrange to provide any necessary 
assistance for setting up apprenticeships, and to promote journeyman 
and other on-the-job training. 
(e) There are hereby authorized to be appropriated such sums, not 
Appropriation, 
in excess of $4,500,000 annually, as may be necessary to carry out the 
provisions of this section. 
(f) In providing assistance under this section with respect to unem-
ployed and underemployed individuals residing in redevelopment 
areas, the Secretary of Labor and the Secretary of Health, Education, 
and Welfare shall give consideration to the special needs of individ-
uals who are agricultural workers or are engaged in other seasonal 
occupations and who require occupational training in order to qualify 
them to engage in supplementary employment during the off season 
and during other periods of reduced activity in the field of their regu-
lar or primary occupations. 
EETRAINING SUBSISTENCE 
PAYMENTS 
SEC. 17. (a) The Secretary of Labor in consultation with the Secre-
tary and the Secretary of Agriculture may, on behalf of the United 
States, enter into agreements with States in which redevelopment 
areas are located, under which the Secretary of Labor shall make pay-
ments to such States either in advance or by way of reimbursement for 
tlie purpose of enabling such States, as agents of the United States, 
to make weekly retraining payments to unemployed or underemployed 
individuals residing within such redevelopment areas who are certified 
by the Secretary of Labor to be undergoing occupational training or 
retraining under section 16 of this Act. 
Such payments shall be made 
only for the period the individual is receiving occupational training 
or retraining under section 16 of this Act, but not in any event to exceed 
60 
PUBLIC LAW 87.27-MAY 1, 1961 
[75 ST AT 
68 Stat. 1130. 
42 u s e 
136 1-
1371. 
Rtiles and regu-
lations. 
Appropri ation. 
sixteen weeks, and the amount of any such payment for any week 
shall be equal to the amount of the average weekly unemployment 
compensation payment (including allowances for dependents when 
appropriate) payable for a week of total unemployment in the State 
mailing such payments. 
(b) No weekly retraining payment shall be made to any person 
otherwise eligible who, with respect to the week for which such pay-
ment would be made, has received or is seeking unemployment com-
pensation under title XV of the Social Security Act or any other Fed-
eral or any State unemployment compensation law, but if the appro-
{)riate State or Federal agency finally determines that a person denied 
)enefits for any week because of this subsection was not entitled to 
unemployment compensation under title XV of the Social Security 
Act or such Federal or State law with respect to such week, this sub-
section shall not apply with respect to such week. 
(c) Any agreement under this section may contain provisions 
(including, so far as may be appropriate, provisions authorized or 
made applicable with respect to agreements concluded by the Secre-
tary of Labor pursuant to title XV of the Social Security Act) as will 
promote effective administration, protect the United States against 
loss, and insure the proper application of payments made to the State 
under such agreement. 
Except as may be provided in such agree-
ments, or in the rules and regulations prescribed pursuant to sub-
section (d) of this section, determinations by any duly designated 
officer or agency as to the eligibility of individuals tor weekly retrain-
ing payments under this section shall be final and conclusive for any 
purposes and not subject to review by any court or any other officer. 
(d) The Secretary of Labor and the Secretary shall jointly pre-
scribe such rules and regulations as they may deem necessary to carry 
out the provisions of this section. 
(e) There are hereby authorized to be appropriated such sums, not 
in excess of $10,000,000 annually, as may be necessary to carry out the 
provisions of this section. 
PENALTIES 
SEC. 18. (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 section 6,7, or 8, 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 Secretary, or for the purpose of obtaining money, prop-
erty, or anything of value, under this Act, shall be punished by a fine 
of not more than $10,000 or by imprisonment for not more than five 
years, or both. 
(b) Whoever, being connected in any capacity with the Secretary, 
in the administration of this Act (1) embezzles, abstracts, purloins, 
or willfully misapplies any moneys, funds, securities, or other things of 
value, whether belonging to him or pledged or otherwise entrusted to 
him, or (2) with intent to defraud the Secretary or any other body 
politic or corporate, or any individual, or to deceive any officer, auditor, 
or examiner, makes any false entry in any book, report, or statement 
of or to the Secretary, or without being duly authorized draws any 
order or issues, puts forth, or assigns any note, debenture, bond, or 
other obligation, or draft, bill of exchange, mortgage, judgment, or de-
cree thereof, or (8) with intent to defraud participates or shares in or 
receives directly or indirectly any money, profit, property, or benefit 
through any transaction, loan, grant, commission, contract, or any 
other act of the Secretary, or (4) gives any unauthorized information 
75 S T A T . ] 
PUBLIC LAW 87.27-MAY 1, 1961 
61 
concerning any future action or plan of the Secretary which might 
aifect the vahie of securities, or having such knowledge invests or 
speculates, directly or indirectliy-, in the securities or property of any 
company or corporation receiving loans, grants, or other assistance 
from the Secretary, shall be punished by a fine of not more than 
$10,000 or by imprisonment for not more than five years, or both. 
EMPLOYMENT OE EXPEDITERS xVND ADMINISTRATIVE EMPLOYEES 
SEC. 19. No financial assistance shall be extended by the Secretary 
under section 6, 7, or 8 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 en-
gaged 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-
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. 
RECORD OF APPLICATIONS 
SEC. 20. The Secretary shall maintain as a permanent part of the ti^"^"*" in spec-
records of the Department of Commerce a list of applications 
approved for financial assistance under section 6, 7, or 8, which shall 
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 Avhich 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. 
PREVAILING RATE OF WAGE AND FORTY-HOUR W^EEK 
S E C 21. All laborers and mechanics employed by contractors or 
subcontractors on projects assisted by the Secretary under this Act 
and undertaken by public applicants 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), and every 
49 stat. ion. 
such employee shall receive compensation at a rate not less than one 
and one-half times his basic rate of pay for all hours worked in any 
workweek in excess of eight hours in any workday or forty hours in 
the Avoi'kweek, as the case may be. The Secretary shall not extend 
any financial assistance under section 6, 7, or 8 for such a project 
without first obtaining adequate assurance that these lal)or standards 
will be maintained upon the construction work. 
The Secretary of 
Labor shall have, with respect to the labor standards specified in this 
provision, the authority and functions set forth in Reorganization 
PUBLIC LAW 87-27-MAY 1, 1961 
[75 S T A T , 
48 Stat. 948. 
Report to Con-
gress. 
Plan Numbered 14 of 1950 (15 F.K. 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). 
ANNUAL RErORT 
SEC. 22. The Secretary shall make a comprehensive and detailed 
annual report to the Congress of his operations under this Act for 
each fiscal year beginning with the fiscal year ending June 30, 1962. 
Such report 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. 
Such report shall show, among 
other things, (1) the number and size of Government contracts for 
the furnishing of supplies and services placed with business enter-
prises located in redevelopment areas, and (2) the amount and dura-
tion of employment resulting from such contracts. 
Upon the re-
quest of the Secretary, the various departments and agencies of the 
Government engaged in the procurement of supplies and services shall 
furnish to the Secretary such information as may be necessary for the 
purposes of this section. 
APPROPRIATION 
SEC. 23. There are hereby authorized to be appropriated such 
sums as may be necessary to carry out the provisions of this Act. 
functions, etc. 
USE OF OTHER FACILITIES 
SEC. 24. (a) To the fullest extent practicable in carrying out the 
provisions of this Act the Secretary shall use the available services 
and facilities of other agencies and instrumentalities of the Federal 
Government, but only with their consent and on a reimbursable basis. 
The foregoing requirement shall be implemented by the Secretary in 
such a manner as to avoid the duplication of existing staffs and facili-
ties in any agency or instrumentality of the Federal Government. 
i^fiiL^'Vfi^" °' "^^^ Secretary is authorized to delegate to the heads of other depart-
ments and agencies of the Federal Government any of the Secretary's 
functions, powers, and duties under this Act as he may deem appro-
priate, and to authorize the redelegation of such functions, powers, 
and duties by the heads of su(-h 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. 
This Act shall be 
supplemental to any existing authority, and nothing herein shall be 
deemed to be restrictive of any existing powers, duties, and functions 
of any other department or agency of the Federal Government. 
(c) Funds authorized to be appropriated under this Act may be 
transferred, with the approval of the Director of the Bureau of the 
Budget, between departments and agencies of the Government, if 
such funds are used for the purposes for which they are specifically 
authorized and appropriated. 
(d) Subject to the standards and procedures prescribed by section 
505 of the Classification Act of 1949, as amended, the head of any 
agency, for the performance of functions under this Act, including 
functions delegated pursuant to subsection (a), may place positions 
in grades 16, 17, and 18 of the General Schedule established by such 
Act, and such positions shall be in addition to the number of such 
positions authorized by section 505 of the Classification Act of 1949, 
as amended, to be placed in such grades: Provided, That not to exceed 
a total of five such positions may be placed in such grades under this 
subsection, to be apportioned among the agencies by the Secretary, 
with the approval of the Director of the Bureau of the Budget. 
Tra n 8 f e 
funds. 
" Super-grade 
positions. 
69 Stat. 179. 
5 u s e 1105. 
75 S T A T . ] 
PUBLIC LAW 87-27-MAY 1, 1961 
63 
RECORDS AND AUDIT 
SEC. 25. (a) Each recipient of assistance under section 6, 7, or 8 
of this Act shall keep such records as the Secretary shall prescribe, 
including records which fully disclose the amount and the disposition 
by such recipient of the proceeds of such assistance, the total cost of 
the project or undertaking in connection with which such assistance 
is given or used, and the amount and nature of that portion of the cost 
of the project or undertaking supplied by other sources, and such other 
records as will facilitate an effective audit. 
(b) The Secretary and the Comptroller General of the United 
States, or any of their duly authorized representatives, shall have 
access for the purpose of audit and examination to any books, docu-
ments, papers, and records of the recipient that are pertinent to assist-
ance received under section 6,7, or 8 of this Act. 
LOANS TO LOCAL DEVELOPMENT COMPANIES 
SEC. 26. Section 502 of the Small Business Investment Act of 1958 
'2 st^. 697. 
is amended by striking out paragraph (6). 
^^^' 
RESEARCH 
SEC. 27. To assist in the long-range accomplishment of the pur-
poses of this Act, the Secretary, in cooperation with other agencies 
having similar functions, shall establish and conduct a continuing pro-
gram of study and research designed to assist in determining the 
causes of unemployment, underemployment, underdevelopment, and 
chronic depression in the various areas of the Nation and in the formu-
lation and implementation of national. State, and local programs 
which will raise income levels and otherwise produce solutions of the 
problems resulting from these conditions. The Secretary shall include 
in his annual report under section 22 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. 
APPLICATION OF ACT 
SEC. 28. As used .in this Act, the terms "State", "States", and 
"United States" include the several States, the District of Columbia, 
the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and 
American Samoa. 
TERMINATION OF AUTHORITY 
SEC. 29. (a) This Act and all authority conferred thereunder shall 
terminate at the close of June 30, 1965. 
(b) Notwithstanding tlie foregoing, effective on July 1, 1965, those 
assets, funds, contracts, loans, liabilities, commitments, authoriza-
tions, allocations, and records of the Secretary under this Act which 
the Director of the Bureau of the Budget shall determine are neces-
sary to the liquidation of the affairs and functions conducted under 
this Act, are transferred to the Secretary of the Treasury for purposes 
of liquidation. 
(c) The termination of this Act shall not affect the disbursement 
of funds under, or the carrying out of, any contract, commitment, or 
other obligation entered into pursuant to this Act prior to the date of 
such termination, or the taking of any action necessary to preserve or 
protect the interests of the United States in any amounts advanced or 
paid out in carrying on operations under this Act. 
Approved May 1, 1961.