The opinion
DECISION AND ORDER (GRANTING DECLARATORY AND INJUNCTIVE RELIEF AGAINST “RACE QUOTA” SYSTEM FOR FEDERAL GRANTS TO LOCAL LOS ANGELES AGENCIES)
HAUK, District Judge.
This matter arises upon plaintiffs’ complaint for declaratory and injunctive relief based upon the alleged unconstitutionality of Section 103(f)(2) of the Public Works Employment Act of 1977, Pub.L.No.95-28, 91 Stat. 116 -121, 42 U.S.C. § 6705 (f)(2), which requires that 10 percent of the amount of each federal grant applied for under the Act be expended for “minority business enterprises.” 1 The Act has been implemented by rules and regulations 2 issued by the Secretary of Commerce under the authority given to him in the original Local Public Works Capital Development and Investment Act of 1976, 42 U.S.C. §§ 6701-6735 , which was amended by the Public Works Employment Act of 1977. Plaintiffs seek declaratory judgments that the Department of Commerce and Secretary of Commerce’s (Federal Defendants) enforcement of the minority business enterprises provisions of Pub.L.No.95-28 and the regulations promulgated thereunder, as well as the policies of the City and County of Los Angeles and their agencies named defendants (Local Defendants) of devising, approving, advertising, and awarding bids in accordance with the provision of the statute and regulations, violated and violate plaintiffs’ rights under the Fifth Amendment to the United States Constitution. Plaintiffs also sought injunctive relief, by way of a temporary restraining order, order to show cause why a preliminary injunction should not be granted, and a permanent injunction, restraining all defendants from enforcing and complying with the said minority business enterprises provisions.
After the October 6, 1977, initial hearing, this Court issued its temporary restraining order, extended it for an additional ten days, and set the hearing on the preliminary injunction for October 31, 1977. On October 21, 1977, the Federal Defendants filed a motion for summary judgment, for which motion an application shortening time to notice the motion to October 31, 1977, was properly made and approved. See Local Rules 3(e) and 3(f), Central District of California. The Local Defendants and the plaintiffs have orally made and *959 joined in the motion for summary judgment by their own motions and counter motions for summary judgment, whereupon the Court proceeded to hear and rule by consolidating the hearing on the preliminary injunction with the hearing on the merits on the permanent injunction, by way of hearing the motions and counter motions for summary judgment. Fed.R.Civ.P., Rule 65(a)(2).
I
STATUTORY BACKGROUND
The Local Public Works Capital Development and Investment Act of 1976, Pub.L.No.94-369 (July 22, 1976), 90 Stat. 999 -1012, 42 U.S.C. §§ 6701-6735 , with its authorization of $2 billion ( 42 U.S.C. § 6710 ) (hereinafter “LPW Act”), for the implementation of which Congress appropriated $2 billion in Pub.L.No.94-447 (Oct. 1,1976), was enacted for the purposes of alleviating the problem of nationwide unemployment and stimulating the national economy by assisting state and local governments to build badly needed public facilities. See H.R.Rep.No.94-1077 re Pub.L.No.94-369, 94th Cong., 2d Sess. (1976). 3 The program was to be administered by the Secretary of Commerce acting through the Economic Development Administration (hereinafter “EDA”), which distributed program funds for construction of public works projects to state and local government applicants. In order to expedite the initiation of construction projects contemplated by the LPW Act, Congress provided that the Secretary shall make a final determination upon each application within 60 days of receipt, with failure to take action within the prescribed period deemed to be approval [ 42 U.S.C. § 6706 ]; that the Secretary shall prescribe any rules and regulations deemed necessary to carry out the provisions of the LPW Act within 30 days of its enactment [ 42 U.S.C. § 6706 ]; and that on-site labor must begin within 90 days of project approval if funds are available [ 42 U.S.C. § 6705 (d)]. Between October 26, 1976, and February 9, 1977 (“Round I”), approximately 2000 projects were approved and the appropriate Federal grants made, exhausting the $2 billion originally authorized and appropriated.
On May 13, 1977, Congress enacted the Public Works Employment Act of 1977, 91 Stat. 116 -121, Pub.L.No.95-28 (hereinafter the “PWE Act”), 4 amending the LPW Act. The PWE Act (denoted “Round II”) was designed to correct certain inadequacies of Round I and to increase funding for public works projects. By the PWE Act of 1977, a total of $6 billion was authorized to be expended in carrying out Round I and Round II under the provisions of the PWE Act, Pub.L.No.95-28, § 109 (May 13, 1977), of which an additional $4 billion was appropriated by Congress, Pub.L.No.95-29, Chap. III (May 13, 1977). 5 Congress remained aware of the importance of the infusion of Federal funds into the depressed construction industry, H.R.Rep.No.95-20, 95th Cong., 1st Sess. 1-2 (1977), 6 and, seeking to avoid any unnecessary delay in the implementation of the PWE Act, added the provision in the PWE Act that the Secretary shall not consider any application submitted subsequent to December 23,1976, Pub.L.No. 95-28, § 107(h)(1) (May 13, 1977), in addition to retaining those deadlines originally set forth in 42 U.S.C. §§ 6705 (d), 6706.
Included in the PWE Act was the following provision:
“(2) Except to the extent that the Secretary determines otherwise, no grant shall be made under this Act for any local public works project unless the applicant *960 gives satisfactory assurance to the Secretary that at least 10 per centum of the amount of each grant shall be expended for minority business enterprises. For purposes of this paragraph, the term ‘minority business enterprise’ means a business at least 50 per centum of which is owned by minority group members or, in case of a publicly owned business, at least 51 per centum of the stock of which is owned by minority group members. For the purposes of the preceding sentence, minority group members are citizens of the United States who are Negroes, Spanish-speaking, Orientals, Indians, Eskimos, and Aleuts.” Pub.L.No.95-28, 91 Stat. 117 , Sec. 103(f)(2). 7
This Minority Business Enterprises (“MBE”) provision was introduced on the House floor during debate and was intended ostensibly to remedy the situation in which “The average percentage of minority contracts, of all Government contracts, in any given fiscal year is 1 percent — 1 percent.” 123 Cong.Rec. p. H-1437-8 (daily ed. February 24, 1977). 8 Economic Development Administration Guidelines for implementation of the MBE provision indicate that “[w]hen prime contractors are selected through competitive bidding, the Grantee [state or local government] must require that each bid include a commitment to use at least 10 percent of the contract funds for MBEs . . . . In the case of projects involving more than one contract . some of the contractors may themselves be MBEs . . .” MBE Guidelines, 9 pp. 8, 9.
Among the rules and regulations promulgated by the Secretary pursuant to his authority to prescribe necessary regulations [ 42 U.S.C. § 6706 ] is the provision that the MBE requirement may be waived as to any grant for which the Assistant Secretary determines that the ten percent set-aside cannot be filled by minority businesses located within a reasonable trade area. Reg. 317.19(b)(2), 42 Fed.Reg. 27432, 27434-5 (May 27, 1977. 10 And the EDA Guidelines elaborate to some extent:
“The Grantee must demonstrate that there are not sufficient, relevant, qualified minority business enterprises whose market areas include the project location to justify a waiver. The Grantee must detail in its waiver request the efforts the Grantee and potential contractors have exerted to locate and enlist MBEs. The request must indicate the specific MBEs which were contacted and the reason each MBE was not used. EDA will consider the degree to which the Grantee and potential contractors have used available referral sources and related assistance in evaluating waiver requests.” MBE Guidelines, pp. 13, 14. 11
II
STATEMENT OF FACTS
Under Round II, and by September 30, 1977, the Secretary of Commerce had granted and obligated the entire $4 billion PWE Act authorization and the appropriation by *961 Public Law 95-29 12 including $29,782,108 for Los Angeles City projects, and $28,109,-085 for Los Angeles County projects. Bid openings for these projects were to commence on October 7, 1977; however, because of the issuance of the temporary restraining order, no contracts have been awarded under Round II.
Plaintiffs are four nonprofit incorporated contractors’ associations and five businesses engaged in general contracting work. The associations allege that a substantial number of their members desire to bid on contracts to be funded under the PWE Act, and on behalf of these members, allege that the MBE provision in Pub.L.No.95-28 and the rules and regulations thereunder issued constitute discrimination on the bases of race in the awarding of public funds in violation of the Fifth Amendment to the United States Constitution. The individual contractors allege that sufficient qualified 13 minority contractors do not exist to enable compliance with the MBE provision, and that the MBE provision increases the bid price which such contractors must submit. There is no allegation that any plaintiff has requested the Local Defendants to seek a “waiver” of the MBE provisions of Sec. 317.19(b)(1) of the rules and regulations pursuant to § 317.19(b)(2) thereof. 42 Fed.Reg. 27432 at 27435 (May 27, 1977.) 14
III
ADMINISTRATIVE REMEDY
Defendants’ initial contention is that the waiver procedure authorized in § 317.-19(b)(2) of the rules and regulations, and set forth in the MBE Guidelines, affords an , administrative remedy which renders unmeritorious plaintiffs’ allegation that there is an insufficient number of qualified MBEs in the Los Angeles area. 15
While the Court recognizes the conflict in authorities dealing with the question of exhaustion of administrative remedies when a constitutional claim is at issue [K. Davis, Administrative Law of the Seventies (1976), § 20.04], it is apparent that the seeking of a waiver of the applicability of the MBE provision would result simply in circumvention of the issue which plaintiffs seek to have resolved. Plaintiffs complain of injury under an allegedly unconstitutional statute, and “[adjudication of the constitutionality of congressional enactments has generally been thought beyond the jurisdiction of administrative agencies.” Oestereich v. Selective Service Board, 393 U.S. 233, 242 , 89 S.Ct. 414, 419 , 21 L.Ed.2d 402 (1968) (citations omitted). The purposes of the exhaustion doctrine, avoidance of interruption of the agency’s duty to apply a statute in the first instance, development of the factual background upon which decisions should be based, and deference to the agency’s discretion and expertise, McKart v. United States, 395 U.S. 185, 193-94 , 89 S.Ct. 1657 , 23 L.Ed.2d 194 (1969), are not served by requiring constitutional issues to be argued before an administrative agency.
No further development of the facts is necessary in this case; no administrative discretion is involved; no determination of the applicability of the MBE provisions to plaintiffs is needed. Unlike the claim in Montana Chapter of Association of Civilian Technicians, Inc. v. Young, 514 F.2d 1165 (9th Cir. 1975), plaintiffs’ primary claim before this Court is the infringement upon their Constitutional rights. In Young, su *962 pra, the claim was for a declaration that certain issues upon which defendant refused to negotiate were in fact the proper subject for negotiation pursuant to an Executive Order. Thus, “[t]he necessity of deciding the constitutional issues may well . [have been] avoided by the grant of alternative administrative relief,” 16 because the Constitutional issue would never arise if the agency determined that the issues were negotiable. In the case here before us, the Constitutional issue has arisen, but it may never be decided if it is insisted that plaintiffs go before an administrator and ask him to rule upon something which he has no authority to decide. See also Public Utilities Commission v. United States, 355 U.S. 534, 539-40 , 78 S.Ct. 446, 451 , 2 L.Ed.2d 470 (1958) (United States not required to exhaust state administrative remedy; “an administrative proceeding might leave no remnant of the constitutional question .... [b]ut where the only question is whether it is constitutional to fasten the administrative procedure onto the litigant, the administrative agency may be defied and judicial relief sought as the only effective way of protecting the asserted constitutional right.”)
Further, the administrative remedy to be pursued here belongs to the Local Defendants, not to plaintiffs: the MBE Guidelines state that “[o]nly the Grantee can request a waiver.” MBE Guidelines, p. 14. Thus, while plaintiffs may ask the Local Defendants to request a waiver, this possibility obviously allows plaintiffs no control over either the decision to seek a waiver or its presentation to the Secretary. Such a procedure hardly affords any administrative remedy which could preclude judicial determination of plaintiffs’ claim.
In addition to arguing that the exhaustion doctrine precludes standing, defendants contend that plaintiffs have suffered no injury at this point in the administration of Round II. With respect to associational standing, the Supreme Court said in Warth v. Seldin, 422 U.S. 490, 511 , 95 S.Ct. 2197, 2211 , 45 L.Ed.2d 343 (1975),
“[e]ven in the absence of injury to itself, an association may have standing solely as the representative of its members. E. g., National Motor Freight Assn. v. United States, 372 U.S. 246 , [ 83 S.Ct. 688 , 9 L.Ed.2d 709 ] (1963). . . . The association must allege that its members, or any one of them, are suffering immediate or threatened injury as a result of the challenged action of the sort that would make out a justiciable case had the members themselves brought suit, [citation omitted] So long as this can be established, and so long as the nature of the claim and of the relief sought does not make the individual participation of each injured party indispensable to proper resolution of the cause, the association may be an appropriate representative of its members, entitled to invoke the court’s jurisdiction.”
Plaintiff contractors, and contractors represented by associations, which are before this Court are clearly suffering the immediate, threatened injury of bidding on construction contracts on terms with which they are unfamiliar, of distinguishing between subcontractors on grounds allegedly unrelated to the characteristics upon which contractors normally employ subcontractors, and submitting bids higher than they otherwise might expect to submit. Plaintiff subcontractor, and subcontractors represented by associations, are threatened with being denied a prescribed percentage of the construction dollar in Los Angeles County due to the application of the MBE provisions.
In Warth v. Seldin, supra, the Supreme Court held that an association of firms engaged in residential construction lacked standing to challenge the constitutionality of a city ordinance which allegedly precluded persons of low and moderate income from residing in the city. The Court ruled *963 that, because the association sought damages rather than declaratory or injunctive relief, any injury was peculiar to the individual member, and would necessitate individual proof. The Court also held that there had been no averment that the ordinance had been responsible for the denial of a building permit for any specific project contemplated by the association. In the case before this Court, however, plaintiffs seek injunctive and declaratory relief from a provision which allegedly removes them from consideration for an identified percentage of construction funds targeted for specific, planned projects. Thus, injury to plaintiffs is clear, and they have standing to bring this action.
Moreover, this case presents “a real and substantial controversy admitting of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.” Aetna Life Insurance Co. v. Haworth, 300 U.S. 227, 241 , 57 S.Ct. 461, 464 , 81 L.Ed. 617 (1937). This Court rejects Federal Defendants’ argument that facial constitutional invalidity can never be asserted where there is a waiver provision. Accordingly, there is a justiciable controversy between plaintiffs and defendants which is appropriate for. judicial determination.
The Court also notes that laches is inapplicable to this case. Plaintiffs brought this action five days after the. September 30, 1977, deadline for obligating the entire $4 billion in PWE Act funds appropriated by Congress. Any earlier action by plaintiffs would not have defined a concrete controversy, since additional projects might have been approved by the Secretary until September 30. The test of laches is prejudice to the opposing party. Gutierrez v. Waterman Steamship Corp., 373 U.S. 206, 215 , 83 S.Ct. 1185 , 10 L.Ed.2d 297 (1963). Federal Defendants are not prejudiced in this case because they have fully performed their function of granting and obligating the funds appropriated and approving the necessary projects. Local Defendants offer no indication of prejudice flowing from the timing of the filing of this action, as opposed to prejudice flowing simply from the filing of the action.
IV
CONSTITUTIONAL DUE PROCESS AND EQUAL PROTECTION
The gravamen of plaintiffs’ complaint is that the MBE provisions infringe upon their rights to due process of law, by creating a classification which denies the granting of Federal construction funds solely on the basis of race. Although the Fifth Amendment to the United States Constitution does not contain an equal protection clause, discrimination which contravenes the Equal Protection Clause of the Fourteenth Amendment violates the due process clause of the Fifth Amendment. Johnson v. Robison, 415 U.S. 361, 364, n.4 , 94 S.Ct. 1160 , 39 L.Ed.2d 389 (1974); Bolling v. Sharpe, 347 U.S. 497, 499 , 74 S.Ct. 693 , 98 L.Ed. 884 (1954).
The initial question confronting this Court is whether the MBE provisions in fact create a “classification” or whether they constitute a “remedy” for past discrimination. Programs which eliminate discrimination are clearly necessary, and have been judicially decreed or approved to dismantle dual school systems which impermissibly perpetuate separation of the races in public schools. Swann v. Charlotte-Mecklenburg Board of Education, 402 U.S. 1 , 91 S.Ct. 1267 , 28 L.Ed.2d 554 (1971). Further, Title VII of the Civil Rights Act of 1964 17 has been held to mandate the award of retroactive seniority to victims of discrimination in hiring on the basis of race, Franks v. Bowman Transportation Co., 424 U.S. 747 , 96 S.Ct. 1251 , 47 L.Ed.2d 444 (1976), and a state redistricting plan, which was drawn with racial considerations aimed at correcting past discrimination, has been upheld under the Voting Rights Act of 1965 and found not to contravene the Fourteenth Amendment. United Jewish Organizations, Inc. v. Carey, 430 U.S. 144 , 97 S.Ct. 996 , 51 L.Ed.2d 229 (1977). Thus, it is clear that, *964 “[j]ust as . race . . . must be considered in determining whether a constitutional violation has occurred, so also must race be considered in formulating a remedy.” North Carolina State Board of Education v. Swann, 402 U.S. 43, 46 , 91 S.Ct. 1284, 1286 , 28 L.Ed.2d 586 (1971).
However, it is also clear that a generalized assertion of “remedy” cannot exempt a racial classification from careful judicial examination, lest such an assertion be invoked as justification for obviously invidious discrimination. In fashioning a remedy for racial discrimination, there must be no discrimination against innocent non-minorities. In United Jewish Organizations, Inc. v. Carey, 430 U.S. 144, 165 , 97 S.Ct. 996, 1009 , 51 L.Ed.2d 229 (1977), Justice White, with Justices Stevens and Rehnquist concurring, stated:
“There is no doubt that in preparing the 1974 legislation, the State deliberately used race in a purposeful manner. But its plan represented no racial slur or stigma with respect to whites or any other race, and we discern no discrimination violative of the Fourteenth Amendment
In the case before this Court, there is no doubt that nonminority contractors and subcontractors are denied a specified percentage of Federal funds solely on the basis of their race. In addition to depriving these plaintiffs of equal treatment under the PWE Act, the MBE provisions, as a result of their asserted role in remedying “past discrimination,” indicate that plaintiffs are members of an industry guilty of a history of discrimination against minorities, a contention which has not been substantiated in this case.
Moreover, at least in the area of desegregation, the Supreme Court has suggested that the school desegregation remedies there discussed may be limited to the specific context of achieving unitary public school systems:
“It would not serve the important objective of Brown I [Brown v. Board of Education, 347 U.S. 483 [ 74 S.Ct. 686 , 98 L.Ed. 873 ] (1954)] to seek to use school desegregation cases for purposes beyond their scope, although desegregation of schools ultimately will have impact on other forms of discrimination.” Swann v. Charlotte-Mecklenburg Board of Education, supra, 402 U.S. at 22-23, 91 S.Ct. at 1279 .
The remedies discussed in the above-mentioned cases also appear to be directed only at eliminating the racial injustice practiced, rather than at attempting to establish an arbitrary level of compensation which will counterbalance prior wrongs. In this respect, Kahn v. Shevin, 416 U.S. 351 , 94 S.Ct. 1734 , 40 L.Ed.2d 189 (1974), and Califano v. Webster, 430 U.S. 313 , 97 S.Ct. 1192 , 51 L.Ed.2d 360 (1977), are inapposite, since they deal with classification on the basis of gender, rather than race. Hence, this Court concludes that the MBE provisions constitute a purely racial classification and must be examined as such.
It should also be noted at this point that, while the Supreme Court has recognized that the Fourteenth Amendment was precipitated by discrimination against Blacks [Strauder v. West Virginia, 100 U.S. 303, 306 , 25 L.Ed. 664 (1879); Slaughter-House Cases, 83 U.S. (16 Wall.) 36, 71-72 , 21 L.Ed. 394 (1873)], its protection extends to all races, including whites. Shelley v. Kraemer, 334 U.S. 1, 22 , 68 S.Ct. 836 , 92 L.Ed. 1161 (1948); Yick Wo v. Hopkins, 118 U.S. 356, 369 , 6 S.Ct. 1064 , 30 L.Ed. 220 (1886); Slaughter-House Cases, 83 U.S. (16 Wall.) 36, 72 , 21 L.Ed. 394 (1873). See also United Jewish Organizations, Inc. v. Carey, supra, 430 U.S. at 165, 97 S.Ct. 996 ; Bakke v. Regents of the University of California, 18 Cal.3d 34, 51 , 132 Cal.Rptr. 680 , 553 P.2d 1152 (1976), outlawing a race quota in medical school, and McDonald v. Santa Fe Trail Transportation Co., 427 U.S. 273 , 96 S.Ct. 2574 , 49 L.Ed.2d 493 (1976), holding that 42 U.S.C. § 1981 prohibits private employment discrimination against whites as well as nonwhites.
Classifications based solely upon race must be subjected to the most rigid *965 judicial scrutiny. Loving v. Virginia, 388 U.S. 1, 11 , 87 S.Ct. 1817 , 18 L.Ed.2d 1010 (1967); Bolling v. Sharpe, supra, 347 U.S. 497, 499 , 74 S.Ct. 693 , 98 L.Ed. 884 (1954); Korematsu v. United States, 323 U.S. 214, 216 , 65 S.Ct. 193 , 89 L.Ed. 194 (1944); Hirabayashi v. United States, 320 U.S. 81, 100 , 63 S.Ct. 1375 , 87 L.Ed. 1774 (1943). In related circumstances, this scrutiny has been held to require that the government must establish a compelling governmental interest for the classification, which interest is unrelated to race, and show that there are no alternative means to advance that interest which would impose a lesser burden on the group disadvantaged. Loving v. Virginia, 388 U.S. 1, 11 , 87 S.Ct. 1817 , 18 L.Ed.2d 1010 (1967); Dunn v. Blumstein, 405 U.S. 330, 337 , 92 S.Ct. 995 , 31 L.Ed.2d 274 (1972); Constructors Association of Western Pennsylvania v. Kreps, 441 F.Supp. 936 (W.D.Pa., 1977); Bakke v. Regents of the University of California, supra, 18 Cal.3d at 49 , 132 Cal.Rptr. 680 , 553 P.2d 1152 .
The legislative history of the PWE Act indicates that it was intended “to help revitalize the Nation’s financially-pressed communities and reactivate the distressed construction industry with its hundreds of thousands of jobless workers . . . .” H.R.Rep.No.95-20, 95th Cong., 1st Sess. 1 (1977). 18
While the legislative history includes no mention of the MBE provisions, Federal Defendants cite the Court to the remarks of Representative Mitchell, sponsor of the MBE amendment on the floor of the House of Representatives, which indicate a desire to correct the situation in which minority businesses are given only 1 percent of all government contracts in any fiscal year. 123 Cong.Rec.H. 1436-1437. 19 Congress apparently became concerned with unemployment in minority communities and the rate of dissolution of minority businesses, mainly by the persuasive rhetoric of Congressman Mitchell, but no study was made and there is no legislative history of this Mitchell Amendment.
The Court recognizes the laudable goal of directing aid to that portion of the community which is suffering from severe unemployment. However, the MBE provision does not advance a governmental purpose unrelated to race. In fact, it is based on race alone — an invidious race quota. It is not contended here that minority business enterprises are more capable than nonminority businesses. No .racially neutral justification is offered for the MBE provisions. Indeed, the specific objective asserted for this classification is the preference of one group of races over another. It is not a permissible governmental objective to direct financial assistance to segments of the community which are classified solely on the basis of race to the exclusion of other segments.
Moreover, the “remedy” versus “classification” distinction is inapplicable in this situation, where no discrimination against the minority business enterprises sought to be assisted by this legislation has been alleged. Federal Defendants have contended that a Congressional desire to remedy prior discrimination is “implicit” in Congressman Mitchell’s remarks, but no specific evidence of such discrimination was shown by him, nor has any such evidence been offered by Federal Defendants, or any parties to this lawsuit.
Further, the MBE provisions fail the second part of the compelling governmental interest test, since underemployed minorities in the construction industry could be aided by racially neutral legislation having less of a detrimental impact upon nonminority contractors. For example, the 10 percent set-aside could be directed at those businesses which have experienced a low prescribed level of unemployment or income within the preceding year, and the Department of Commerce could take affirmative *966 steps to ensure that businesses in geographical areas of high unemployment become particularly aware of Federally funded projects which were being planned and to familiarize such businesses with the larger general contractors which customarily bid on Federally funded projects.
Prior to and at the hearing on Summary Judgment, Federal Defendants supplied the Court with an Opinion and Order of the Honorable Daniel J. Snyder, Jr., United States District Judge, 441 F.Supp. 936 (W.D.Pa. No. 77-1035, 1977), in the case of Constructors Association of Western Pennsylvania v. Kreps, a case with issues identical to ours. In that Opinion and Order, Judge Snyder denied a preliminary injunction on the grounds that while the same 10% racial quota for subcontractors deserved the strictest scrutiny of the Court since it is inherently constitutionally suspect, id. at 950 , nevertheless, and while viewing the lack of legislative history as “troublesome,” he concluded that the 10% quota based on race alone “is the only effective way to crack the competitive barriers and end the cycle which continually excludes minority businesses from proportionate participation.” Id. at 953, 945, 942-944 . To this conclusion, I take exception and therefore, with his Opinion and Order I disagree, with all due respect and humility. Perhaps the Bakke case now before the Supreme Court on certiorari will settle the matter for both Judge Snyder and this Court. Bakke v. Regents of the University of California, 18 Cal.3d 34 , 132 Cal.Rptr. 680 , 553 P.2d 1152 (1976), cert. granted, 429 U.S. 1090 , 97 S.Ct. 1098 , 51 L.Ed.2d 535 (1977), argued before the United States Supreme Court, 1977. - U.S. -, 98 S.Ct. 46 , 54 L.Ed.2d 67 .
Quotas are absolutely invidious and unconstitutional. Whether used to exclude minorities as in the old collegiate 10% quota system, or used to include minorities under this new public works subcontractors 10% quota system, as here, every quota based on race or national origin alone is constitutionally invalid and impermissible. In this situation the “10% quota-ed” persons are the stigmatized, and the remaining “non quota-ed” persons are the illegitimatized, whether hurt or helped. All discrimination solely on the basis of race or national origin, direct or reverse, converse or inverse, is invidious and unconstitutional.
Affirmative action and goals are permissible; race quotas are not. It is simple as that, but even worse and inevitably, race quotas do not achieve or even approach the goals desired — personal, familial, economic, educational, recreational and all kinds of human equality, regardless of race or national origin.
Equal protection and non-discrimination in every phase and activity of human life is mandated by equal protection to all persons guaranteed in the Federal Constitution. Race quotas necessarily run counter to this Constitutional mandate and must be struck down if this Court, and indeed all of us, are to live under and abide by the United States Constitution.
V
THE APPLICABILITY OF TITLE VI OF THE CIVIL RIGHTS ACT OF 1964, SECTIONS 601 AND 602, 42 U.S.C. §§ 2000d and 2000d-l
Title VI of the Civil Rights Act of 1964, Sec. 601,42 U.S.C. § 2000d 20 provides that no *967 person in the United States shall on the ground of race, color, or national origin be excluded from, denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. This unequivocal statutory statement by Congress of the Constitutional guarantee of equal protection and non-discrimination solely on the basis of race, color, or national origin is specifically directed to be enforced by every Federal department or agency rendering Federal assistance to any program or activity. 42 U.S.C. § 2000d-1. 21 A plain uncomplicated reading of these two statutes would clearly invalidate the 10% “race quota” system set forth in the “race quota” law here in question, Public Law No. 95-28, Sec. 103 (f)(2), 42 U.S.C. § 6705 (f)(2), 22 and the rules and regulations issued by the Commerce Department thereunder especially Sec. 317.17(b), 42 Fed.Reg. 27432 at 274S4-5. 23 But let us consider these statutes in the light of appropriate statutory construction.
The Court is aware of the general rules of statutory construction, which are hornbook law, and which are ordinarily controlling in a problem involving conflicting statutes:
(1) Where there is no clear intention to the contrary, a specific statute will not be controlled or nullified by a general one, irrespective of the priority of enactment. 24
*968 (2) In resolving irreconcilable conflicts between successive statutory enactments, the later enactment should be given “primary consideration” over the prior. 25
But the Court is compelled to go beyond the hornbook and must ascertain the purposes underlying any such conflicting enactments, and may not dispose of the problem solely by using such mechanical judicial slide-rules. Fanning v. United Fruit Co., 355 F.2d 147, 149 (4th Cir. 1966). The two hornbook principles are not to be applied when the results are “extraordinary,” 26 or when the results do not reflect the true “presumed intention of the law making body.” 27 It follows that when an overriding public interest is demonstrably clear, in that the prior general statute sets forth the true Constitutional mandate, and the later specific statute is less conducive to the public welfare, then the public good controls and the general statute will invalidate the specific statute. So also will the prior invalidate the subsequent.
In our case here, where the prior statutes, 42 U.S.C. § 2000d and § 2000d-1, set forth in clear and unmistakable terms the overriding mandate of the Federal Constitution for equal protection and non-discrimination, they obviously express the true policy of the United States, the true intent of Congress, and the true Constitutional mandate. Any attempt to invalidate them by the “race quota” statute and rules and regulations thereunder would give us, indeed, extraordinary results. Thus, even though they are general and not specific and even though they are prior in time, the Court must necessarily uphold these general and prior statutes and decree the invalidity of the “race quota” system contained in the specific and subsequent 10% “race quota” law and regulations.
The legislative history of Title VI of the Civil Rights Act of 1964, and more particularly Sections 601 and 602, thereof, 42 U.S.C. §§ 2000d 28 and 2000d-l, 29 unmistakably and in the plainest of language, sets forth the Congressional mandate in enacting these two statutes. They codify into statutory formula the equal protection and nondiscrimination guarantees of the Federal Constitution.
For instance, House Report No. 914, 88th Congress, 2d Session, in reporting H.R. 7152, later amended and then enacted as 42 U.S.C. § 2000d (Sec. 601 of Title VI of the Civil'Rights Act of 1964) to the floor, printed out as “Purpose and Content,” that Title VI “prohibits discrimination in any Federal financial assistance program.” 30 And in the Sectional Analysis portion, the House Report emphatically proclaims as to Title Vi:
“This title declares it to be the policy of the United States that discrimination on the ground of race, color, or national origin shall not occur in connection with programs and activities receiving Federal financial assistance and authorizes and directs the appropriate Federal departments and agencies to carry out this policy.” 31
*969 In stark contrast, the “race quota” provisions in Pub.L.No.95-28, Sec. 103(f)(2), 42 U.S.C. § 6705 (f)(2) have absolutely no legislative history. 32 The most that the defendants can dredge up are the remarks of the Hon. Parren J. Mitchell (D.Md.), United States Congressman from Maryland, who for the first time on the floor of the House at the time of the debate upon Pub.L.No. 95-28, introduced the 10% “race quota” amendment which, after slight modification, has become Section 103(f)(2) of Pub.L.No. 95-28, 42 U.S.C. § 6705 (f)(2). But, of course, this is not legislative history. It is only the debate rhetoric of a partisan who sponsored the amendment.
This is not astounding, because, as defendants admit, and as the legislative history of Pub.L.No.95-28 demonstrates, the amendment sponsored by Congressman Mitchell was never considered by the House or by the Judiciary Committee, and is not mentioned anywhere in House Report No. 914, which reported the Bill to the House Floor without Mitchell’s amendment.
The “race quota” provisions in Pub.L.No. 95-28, Sec. 103(f)(2), 42 U.S.C. § 6705 (f)(2), the specific and subsequent law, and in the regulations issued pursuant to it cannot be held to invalidate by any kind of theory or implication the overriding Congressional, National, and Constitutional policy in 42 U.S.C. § 2000d and d-1, mandating the Federal Constitutional guarantees of equal protection and non-discrimination, even though the “race quota” ostensibly is claimed to benefit minorities, which of course, it does not in reality do. On the contrary) it is a glaring and flagrant violation of both the Congressional intent and National policy, as well as the Constitutional mandate.
It follows that this Court is obliged to declare the “race quota” provision of Pub.L. No.95-28, Sec. 103 (f)(2), 42 U.S.C. § 6705 (f) (2), and the rules and regulations issued thereunder, especially Section 317.19, 42 Fed. Reg. 27432 at 27434-5, invalid and illegal under and by virtue of Title VI of the Civil Rights Act of 1964, Sections 601 and 602, 42 U.S.C. §2000d and d-1.
*970 VI
PROPRIETY OF THE REMEDIES SOUGHT
(a) Declaratory Judgment
The Federal Judicial Code has since 1948, as amended in 1976, provided that “[i]n a case of actual controversy within its jurisdiction . . . any Court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.” 28 U.S.C. § 2201 .
This statutory determination of the availability of declaratory relief “in a case of actual controversy” is, under Rule 57, Fed.R.Civ.P., available in accordance with all of the Federal Rules of Civil Procedure, including the Rule governing the entry of Summary Judgments, Rule 56, Fed.R.Civ.P. And the remedy of Declaratory Judgment is available “whether or not further relief is or could be sought.” 28 U.S.C. § 2201 .
As we have demonstrated heretofore, the case before us is a “justiciable controversy.” See in this connection, 6A Moore’s Federal Practice, Paragraph 57.-18[2] (2d ed. 1974, as kept up to date by the 1976-77 Cumulative Supplement) “Constitutionality of Public Acts,” and cases there cited. The case before us concerns “the rights and other legal relations” of the plaintiffs under the unconstitutional provisions of Pub.L.No.95-28, Sec. 103(f)(2), 42 U.S.C. § 6705 (f)(2). Not only have these unconstitutional 10% “race quota” provisions been applied, but they are clearly threatened to be applied in the future, and since the plaintiffs have standing, declaratory relief is properly, factually, and legally invoked here and should be issued, not only with regard to the unconstitutionality of Pub.L.No.95-28, Sec. 103(f)(2), 42 U.S.C. § 6705 (f)(2), but also with respect to the relevant rules and regulations issued thereunder by the Federal Defendants, especially Section 317.19(b), 42 Fed.Reg. 27432, 27434-5. Based on race alone they are unconstitutional on their face and as applied; and we might add, since they are threatened to be applied in this situation, a declaratory judgment is obligatory.
Since we have also found that Title VI of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000d and d-1 are applicable to invalidate Pub.L.No. 95-28, Sec. 103(f)(2), 42 U.S.C. § 6705 (f)(2), declaratory relief should also be granted to plaintiffs upon this ground.
(b) Injunctive Relief
While the basic elements of injunctive relief are present here where we have an unconstitutional and illegal “10% race quota” system, the Affidavit of Arthur J. Sulvetta, Attachment N to Federal Defendants’ Motion for Summary Judgment, makes it clear that any restraint retroactively or retrospectively applied would work a serious and irreparable injury upon the Local Defendants and upon the people and economy of Los Angeles County and Los Angeles City.
As Sulvetta, who is Chief, Program Analysis Division, Economic Development Administration, U.S. Department of Commerce and an apparently extremely well qualified economist, under oath declares, a nationwide total of $4 billion out of the $6 billion appropriated to date have been granted, including more than $57 million for the Local Defendants: $29,782,108 for the City of Los Angeles and its departments, offices and projects; and $28,109,085 for the County of Los Angeles, and its departments, offices and projects.
Moreover, Sulvetta estimates that those projects will generate approximately 5,613 to 6,068 person-years of jobs, involving 1,910,901 hours of employment, the equivalent of a full year of employment for 1,517 construction workers, translated into 12,265 workers to be employed on these local projects. He further estimates 489 person-years in indirect jobs associated with *971 the construction industry here on these projects in Los Angeles City and County.
Finally, Sulvetta estimates that a one-year delay in project construction activities would increase costs an additional $7.6 million over and above the $59 million for the Local Defendants; and a two-year delay would result in $16.1 million increase in costs.
Founded as they are on reliable studies by the Rand Corporation and other equally reliable studies and statistics, Sulvetta’s Affidavit convinces the Court that retroactive or retrospective application of injunctive relief would be in essence a financial, economic, and fiscal disaster for the Local Defendants, their residents, and their economies.
And, of course, Sulvetta’s estimates are substantiated in every material respect by the affidavits submitted by the Local Defendants, specifying in some detail the public injury that would result if projects were held up for any length of time, consisting as they do of police facilities, schools, recreation centers, senior citizen facilities, storm drains, sewerage facilities, flood control projects, hospital additions, medical and surgical augmentations, fuel storage facilities, landscaping, and numerous other public works.
We are thus fully aware of the tremendous detriment and harm that necessarily would befall the defendants if any injunctive relief were to be made retroactive, as so clearly demonstrated by the most recent affidavits of the defendants and the acts of the plaintiffs themselves by their undue delay and even fault in filing their action and in failing and refusing to bid, even though they were under the clear threat of the defendants to deny awards to any such bids. This awareness obliges this Court to apply any injunctive relief solely and only in the future and prospectively. This is not to say that the statute is not unconstitutional for we have already held that it is. But the Court does have equitable discretion to consider all of the circumstances in determining how far reaching and in what time frame restraint should be ordered. The Court finds and concludes that it should operate only in the future, balancing as it must the needs of and detriment that might be suffered on both sides, depending on the prospective or retroactive thrust of injunctive relief.
It is abundantly clear, therefore, that the injunctive relief in the Judgment should be fashioned so as to apply only prospectively in accordance with the principles laid down by the Supreme Court in Linkletter v. Walker, 381 U.S. 618, 627-29 , 85 S.Ct. 1731 , 14 L.Ed.2d 601 (1965), and Chicot County District v. Bank, 308 U.S. 371, 374 , 60 S.Ct. 317 , 84 L.Ed. 329 (1940). In fashioning this prospective injunctive application we should keep in mind two dates today, October 31, 1977, with respect to the Federal Defendants, and December 31, 1977, with respect to the Local Defendants.
And just as absolutely clear from the Sulvetta Affidavit it is that no injunctive relief should be issued, applied, or even contemplated with respect to Federal grants made to local agencies throughout the United States, other than the Local Defendants. To do so would be to pass judgment on some $4-billion worth of projects and controversies throughout the nation with totally unacceptable and undoubtedly baleful consequences. It is wholly repugnant to this Court, and, of course, will not be ordered.
VII
ORDER
By reason of the foregoing Decision, Findings of Fact and Conclusions of Law it is hereby ordered that judgment be entered for plaintiffs and against defendants for declaratory relief and permanent injunction in accordance herewith.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Appendices to follow.
*972 APPENDIX A
PUBLIC LAW 95-28 [H.R. 11]; May 13, 1977
LOCAL PUBLIC WORKS CAPITAL DEVELOPMENT AND INVESTMENT ACT OF 1976
For Legislative History of Act, see p. 716
An Act to increase the authorization for the Local Public Works Capital Development and Investment Act of 1976.
Be it enacted by the. Senate and House of Representatives of the United States of America in Congress assembled,
Local Public Works Capital Development and Investment Act of 1976, authorization increase. Public Works Employment Act of 1977. 42 USC 6701 note. 42 USC 6701. Public works project.
TITLE I
Section 101. This title may be cited as the “Public Works Employment Act of 1977”.
Sec. 102. (a) Paragraph (2) of section 102 of the Local Public Works Capital Development and Investment Act of 1976 is amended by striking out “and American Samoa.” and inserting in lieu thereof the following: “American Samoa, and the Trust Territory of the Pacific Islands.”.
(b) Section 102 of such Act is amended by adding at the end thereof the following:
“(4) 'public works project’ includes a project for the transportation and provision of water to a drought-stricken area.”.
Grants and contracts, requirements. 42 USC 6705. Competitive bidding.
Sec. 103. Section 106 of the Local Public Works Capital Development and Investment Act of 1976 is amended by adding at the end thereof the following new subsections:
“(e) (1) No part of the construction (including demolition and other site preparation activities), renovation, repair, or other improvement of any public works project for which a grant is made under this Act alter the date of enactment, of this subsection shall be performed directly by any department, agency, or instrumentality of any State or local government. Construction of each such project shall be performed by contract awarded by competitive bidding, unless the Secretary shall affirmatively find that, under the circumstances relating to such project, some other method is in the public interest. Contracts for the construction of each project shall be awarded only on the basis of the lowest responsive bid submitted by a bidder meeting established criteria of responsibility. No requirement or obligation shall be imposed as a condition precedent to the award of a contract to such bidder for a project, or to the Secretary’s concurrence in the award of a contract to such bidder, unless such requirement or obligation is otherwise lawful and is specifically set forth in the advertised specifications.
Illegal aliens.
“(2) No grant shall be made under this Act for any local public works project unless the State or local government applying for such grant submits with its application a certification acceptable to the Secretary that no contract will be awarded in connection with such project to any bidder who will employ on such project any alien in the United States in violation of the Immigration and Nationality Act or any other law, convention, or treaty of the United States relating to the immigration, exclusion, deportation, or explusion of aliens.
8 USC 1101 note.
U.S.-made products.
“(f) (1) (A) Notwithstanding any other provision of law, no grant shall be made under this Act for any local public works project unless only such unmanufactured articles, materials, and supplies as have been mined or produced in the United States, and only such manu *973 factured articles, materials, and supplies as have been manufactured in the United States substantially all from articles, materials, and supplies mined, produced, or manufactured, as the case may be, in the United States, will be used in such project.
“(B) Subparagraph (A) of this paragraph shall not apply in any case where the Secretary determines it to be inconsistent with the public interest, or the cost to be unreasonable, or if articles, materials, or supplies of the class or kind to be used or the articles, materials, or supplies from which they are manufactured are not mined, produced, or manufactured, as the case may be, in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality.
“(2) Except to the extent that the Secretary determines otherwise, no grant shall be made under this Act for any local public works project unless the applicant gives satisfactory assurance to the Secretary that at least 10 per centum of the amount of each grant shall be expended for minority business enterprises. For purposes of this paragraph, the term ‘minority business enterprise’ means a business at least 50 per centum of which is owned by minority group members or, in case of a publicly owned business, at least 51 per centum of the stock of which is owned by minority group members. For the purposes of the preceding sentence, minority group members are citizens of the United States who are Negroes, Spanish-speaking, Orientals, Indians, Eskimos, and Aleuts.
Grant allocation requirements.
“Minority business enterprise.”
Minority group members.
“(g) No grant shall be made under this Act for any project for which the applicant does not give assurances satisfactory to the Secretary that the project will be designed and constructed in accordance with the standards for accessibility for public buildings and facilities to the handicapped and elderly under the Act entitled ‘An Act to insure that certain buildings financed with Federal funds are so designed and constructed as to be accessible to the physically handicapped’, approved August 12, 1968 (42 U.S.C. 4151 et seq.). The Architectural and Transportation Barriers Compliance Board established by the Rehabilitation Act of 1973 (P.L. 93-112) is authorized to insure that any construction and renovation done pursuant to any grant made under this Act complies with the accessibility standards for public bunldings and facilities issued under the Act of August 12, 1968.”.
Accessibility standards for handicapped and elderly.
29 USC 701 note.
Sec. 104. Section 107 of the Local Public Works Capital Development and Investment Act of 1976 is amended by inserting after the third sentence thereof the following new sentence.^ “The Secretary, in consultation with the Secretary of Labor, and consistent with existing applicable collective bargaining agreements and practices, shall promulgate regulations to assure special consideration to the employment in projects under this Act of qualified disabled veterans (as defined in section 2011(1) of title 38, United States Code) and qualified Vietnam-era veterans (as defined in section 2011 (2) (A) of such title 38).”.
Employment of disabled veterans, regulations. 42 USC 6706.
Sec. 105. Subsection (a) of section 108 of the Local Public Works Capital Development and Investment Act of 1976 is amended to read as follows: .
Funds, allocation. 42 USC 6707.
“(a) The Secretary shall allocate funds appropriated after the date of enactment of the Public Works Employment Act of 1977 under section 111 of this Act as follows:
Post, p. 119.
“(1) 21/2 per centum of such funds shall be set aside and shall be expended only for grants for public works projects under this Act to Indian tribes and Alaska Native villages. None of the *974 remainder of such funds shall be expended for such grants to such tribes and villages.
“(2) After the set aside required by paragraph (1) of this subsection, $70,000,000 shall be set aside and expended oxdy for grants for any public works project the application for a grant for which was made under this Act after the date of enactment of this Act and before December 24,1976, and which application was not received, was not considered, or was rejected solely because of an error by an officer or employee of the United States. Any allocation made to an applicant pursuant to regulation shall be reduced by the amount of any grant made to such applicant under this paragraph.
“(3) After the set asides required by paragraphs (1) and (2) of this subsection, 65 per centum of such funds shall be allocated among the States on the basis of the ratio that the number of unemployed persons in each State bears to the total number of unemployed persons in all the States and 35 per centum of such funds shall be allocated among those States with an average unemployment rate for the preceding twelve-month period in excess of 6.5 per centum on the basis of the relative severity of unemployment in each such State, except that (A) no State shall be allocated less than three-quarters of one per centum or more than 121/2 per centum of such funds for local public works projects within such State, except that in the case of Guam, the Virgin Islands, American Samoa, and the Trust Territory of the Pacific Islands, not less than one-half of one per centum in the aggregate shall be granted for such projects in all four of these jurisdictions, and (B) no State whose unemployment data was converted for the first time in 1976 to the benchmark data of the current population survey annual average compiled by the Bureau of Labor Statistics shall receive a percentage of such funds less than the percentage of funds allocated to such State under this Act from funds appropriated to carry out this Act prior to the date of enactment of the Public Works Employment Ant of 1977.”.
42 USC 6707.
Sec. 106. Subsection (b) of section 108 of the Local Public Works Capital Development and Investment Act of 1976 is amended by—
(1) inserting “(1)” immediately after “(b)”; and
(2) adding at the end thereof the following new paragraphs:
“(2) In making grants for projects for construction, renovation, repair, or other improvement of buildings, the Secretary shall also give consideration as between such building projects to those projects which will result in conserving energy, including, but not limited to, projects to redesign 'and retrofit existing public facilities for energy conservation purposes, and projects using alternative energy systems.
“ (3) In making grants under this Act, the Secretary shall also give priority and preference to any public works project requested by a State or by a special purpose unit of local government which is endorsed by a general purpose local government within such State.
“ (4) A project requested by a school district shall be accorded the full priority and preference to public works projects of local governments provided in section 108(b) of this Act.”.
Sec. 107. (a) The first sentence of subsection (c) of section 108 of the Local Public Works Capital Development and Investment Act of 1976 is amended by striking out “three most recent consecutive months” each place it appears and inserting in lieu thereof at each such place “twelve most recent consecutive months”.
Waiver.
(b) Subsection (c) of section 108 of such Act is amended by adding *975 at the end thereof the following new sentence: “The Secretary may waive the application of the first sentence of this subsection to any State which receives a minimum allocation pursuant to paragraph (3) of subsection (a) of this section.”
42 USC 6707.
(c) Subsection (d) of section 108 of such Act is amended to read as follows:
“(d) Whenever a State or local government submits applications for grants under this Act for two or more projects, such State or local government shall submit as part of such applications its priority for each such project.”.
(d) Subsection (e) of section 108 of such Act is amended by striking out “of direct benefit to,” and all that follows down through and including the period at the end of the sentence and inserting in lieu thereof: “to be constructed in Such community or neighborhood.”.
Repeal.
(e) Subsection (f) of section 108 of such Act is hereby repealed.
(f) Section 108 of such Act is amended by adding at the end thereof the following new subsections:
“(h) (1) Except as provided in paragraph (2) of this subsection, the Secretary shall not consider or approve or make a grant for any project for which any application was not submitted for a grant under this Act on or before December 23,1976.
“ (2) The Secretary may receive applications for grants for projects under this Act—
“(A) from the Trust Territory of the Pacific Islands;
“(B) from Indian tribes and Alaska Native villages;
“(C) from any applicant to use any allocation which may be made pursuant to regulation, to the extent necessary to expend such allocation, if a sufficient number of applications were not submitted on or before December 23,1976, to use such allocation.
“(i) The Secretary may allow any applicant which has received a grant for a project under this Act to substitute one or more projects for such project if in the judgment of the Secretary (1) the Federal cost in the aggregate of such substituted project or projects does not exceed such grant, (2) such substituted project or projects comply with section 106(d) of this Act, and (3) such substituted project or projects will in fact aid in alleviating drought or other emergency or disaster-related conditions or damage. Section 106(a) of this Act shall not apply to projects substituted under this subsection.
Ante, p. 118.
“(j) Notwithstanding subsection (h)(1) of this section, grants may be made from appropriations made under section 111 of this Act after September 30,1977, to States or local governments for projects for the construction, renovation, repair, or other improvements of health care or rehabilitation facilities owned and operated by private nonprofit entities.”.
Post, p. 120.
Sec. 108. The first sentence of section 109 of the Local Public Works Capital Development and Investment Act of 1976 is amended by striking out “by contractors or subcontractors”.
42 USC 6708.
Sec, 109. Section 111 of the Local Public Works Capital Development and Investment Act of 1976 is amended by striking out “$2,000,000,000 for the period ending September 30,1977,” and inserting in lieu thereof “$6,000,000,000 for the period ending December 81, 1978.”.
42 USC 6710.
Sec. 110. (a) The Secretary of Commerce is authorized and directed to study public works investment in the United States and the implications for the future of recent trends in such investment.
Public works investment, °'U1 note-
(b) The study authorized by this section shall include, but not be limited to, the following:
*976 (1) The historical scope and nature of public works investment, including—
(A) shifts in the types of public facilities constructed over the last thirty years and the implications of such shifts;
(B) the patterns of regional distribution of investment;
(C) the role of the Federal Government, States, and local communities in funding public facilities;
(D) the impact upon unemployment in minority groups.
(2) The proportion of the gross national product devoted to public works investment over the last thirty years.
(3) Methods by which the aggregate need for public works can be determined.
(4) How public works are financed and how financing arrangements affect the pattern and type of investment.
(5) The level of maintenance or renovation of existing public facilities needed, compared to that provided.
Report to Congress.
(c) The Secretary of Commerce shall submit to Congress a report with respect to its findings and recommendations no later than eighteen months after the date of enactment of this section. A preliminary report putting forth the study design shall be submitted to Congress within four months after the date of enactment of this section.
42 USC 6710 note.
Sec. 111. The Secretary of Agriculture and the Secretary of the Interior shall immediately initiate the construction of those Federal public works projects (A) which are the responsibility of their respective departments, (B) which have been authorized, and (C) which can be commenced within 60 days of the date of enactment of this section and completed no later than the 180th day after commencement of construction. No funds authorized by section 111 of the Local Public Works Capital Development and Investment Act of 1976 (Public Law 9T-369) may be used to carry out this section.
Funds, prohibition. 42 USC 6710.
TITLE II — FEDERAL PUBLIC WORKS PROJECTS CONTINUATION
Sec. 201. The Congress hereby finds and declares that:
90 Stat. 889 .
90 Stat. 851 .
(A) the construction projects listed in Public Law 94-355, the Public Works for Water and Power Development and Energy Research Appropriations Act, 1977, and in Public Law 94-351, the Agriculture and Related Agencies Programs Appropriations Act, 1977, represent the foundation of our national public works activity. Such projects are essential to the reduction of unemployment;
(B) such projects provide long-term benefits to communities, to States, and to the entire Nation in terms of water management, flood control, navigation, recreation, and enhanced economic activity; and
(C) such projects have been authorized by the Congress after protracted hearings and consideration extended over many years. Appropriations have been made and are being made pursuant thereto. It is the judgment of Congress that such projects should not be discontinued except by following the legislative process provided by the Constitution of the United States and the provisions of Public Law 93-344, the Congressional Budget and Impoundment Control Act of 1974.
31 USC 1301 note.
Budget deferrals and rescissions, exception.
Sec. 202. Notwithstanding the deferral and rescission provisions of Public Law 93-344, all appropriations provided in Public Laws 94-355 and 94-351 for construction projects or for investigation, plan *977 ning, or design related to construction projects shall be made available for obligation by the President and expended for the purposes for which the appropriations are made, with the exception of those appropriations or expenditures relating to the Meramec Park Lake project in Missouri.
Sec. 203. With the exception noted relating to the Meramec Park Lake project in Missouri, section 202 of' this Act shall be equivalent to and have the legal effect of a resolution disapproving any deferral of budget authority previously provided for construction projects in Public Law 93-355 or in any prior law appropriating funds for the United States Army Corps of Engineers or the Department of the Interior Bureau of Reclamation, or for construction projects in Public Law 94-351 or any prior law appropriating funds for construction projects in the Department of Agriculture as provided for in section 1013(b) of Public Law 93-344, the Congressional Budget and Impoundment Control Act of 1974. With the exception noted relating to the Meramec Park Lake project in Missouri, section 202 is also equivalent to a congressional statement of intent not to uphold any rescission of budget authority with regard to funds appropriated for construction projects in Public Law 94-355 or Public Law 94 — 351 or for construction projects in any prior law appropriating funds for the United States Army Corps of Engineers, the Department of the Interior Bureau of Reclamation, or the Department of Agriculture, as provided for in section 1012(b) of Public Law 93-344.
90 Stat. 889.
90 Stat. 851 .
31 USC 1403. Ante, p. 120.
Sec. 204. It is hereby reiterated that the interest rates or rates of discount to be used to assess the return on the Federal Government’s investment in projects of the United States Army Corps of Engineers or the Department of the Interior Bureau of Reclamation, shall be those interest rates or rates of discount established by Public Law 93-251, the Water Resources Development Act of 1974, or by any prior law authorizing projects of the United States Army Corps of Engineers or the Department of the Interior Bureau of Reclamation.
31 USC 1402. Intrerest rates and rates of discount.
42 USC 1962d-17 note.
88 Stat. 12 .
Approved May 13, 1977.
LEGISLATIVE HISTORY:
HOUSE REPORTS: No. 95-20 (Comm, on Public Works and Transportation) and No. 95-230 (Comm, of Conference).
SENATE REPORTS: No. 95-38 accompanying S. 427 (Comm, on Environment and Public Works) and No. 95-110 (Comm, of Conference).
CONGRESSIONAL RECORD, Vol. 123 (1977):
Feb. 24, considered and passed House.
Mar. 10, considered and passed Senate, amended, in lieu of S. 427.
Apr. 5, House concurred in Senate amendment with an amendment.
Apr. 28, 29, Senate agreed to conference report.
May 3, House agreed to conference report.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 13, No. 20:
May 13, Presidential statement.
*978 APPROPRIATIONS — ECONOMIC STIMULUS, ETC.
•An Act making economic stimulus appropriations for the fiscal year ending September 30, 1977, and for other purposes.
Economic stimulus appropriations, 1977.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the following sums are appropriated, out of any money in the Treasury not otherwise appropriated, for economic stimulus appropriations for the fiscal year ending September 30, 1977, and for other purposes, namely:
TITLE I
CHAPTER I
DEPARTMENT OF THE TREASURY
PAYMENTS TO STATE AND LOCAL GOVERNMENT FISCAL ASSISTANCE TRUST FUND
For payments to the State and Local Government Fiscal Assistance Trust Fund, as authorized by the State and Local Fiscal Assistance Act of 1972, as amended (31 U.S.C. 1221-1263), $4,991,085,000.
ANTIRECESSION FINANCIAL ASSISTANCE FUND
For an additional amount for the “Antirecession Financial Assistance Fund”, $632,500,000, to remain available until September 30,1978.
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
RESEARCH AND DEVELOPMENT
For an additional amount for “Research and development”, $95,000,000, to remain available until expended.
ENVIRONMENTAL PROTECTION AGENCY
CONSTRUCTION GRANTS
33 USC 1286.
For payment of reimbursement claims pursuant to section 206(a) of the Federal Water Pollution Control Act, as amended, $300,000,000, to remain available until expended.
*979 CHAPTER II
DEPARTMENT OF LABOR
Employment and Training Administration
PROGRAM ADMINISTRATION
For an additional amount for “Program administration”, $4,397,000, together with not to exceed $100,000 which may be expended from the Employment Security Administration account in the Unemployment Trust Fund.
EMPLOYMENT AND TRAINING ASSISTANCE
For an additional amount for “Employment and training assistance”, $2,578,000,000, to remain available until September 30, 1978.
TEMPORARY EMPLOYMENT ASSISTANCE
For financial assistance as authorized by Title VI of the Comprehensive Employment and Training Act of 1973, as amended, $6,847,000,000, to remain available until September 30, 1978.
29 USC 961.
COMMUNITY SERVICE EMPLOYMENT FOR OLDER AMERICANS
For an additional amount for “Community service employment for older Americans”, $59,400,000, of which $44,500,000 is to carry out section 906(a) (1) of the Older Americans Act.
42 USC 3056d.
Bureau of Labor Statistics
SALARIES AND EXPENSES
For an additional amount for “Salaries and expenses”, $500,000.
Departmental Management
SALARIES AND EXPENSES
For an additional amount for “Salaries and expenses”, $602,000.
CHAPTER III
DEPARTMENT OF COMMERCE
Economic Development Administration
DROUGHT ASSISTANCE PROGRAM
For expenses necessary to carry out a community emergency drought assistance program, $175,000,000: Provided, That this appropriation shall be available only upon enactment into law of authorizing legislation.
LOCAL PUBLIC WORKS PROGRAM
For an additional amount for “Local public works program”, $4,000,000,000: Provided, That not to exceed $15,000,000, to remain available until September 30,1979, may be used for necessary admin *980 istrative expenses, including expenses for program evaluation by the Secretary of Commerce.
CHAPTER IV
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
GRANTS-IN-AID FOR AIRPORTS (AIRPORT AND AIRWAY TRUST FUND)
90 Stat. 1184 .
Section 302 of the Department of Transportation and Related Agencies Appropriation Act, 1977 (Public Law 9-U387) is amended by striking out “$510,000,000” and inserting in lieu thereof: “$545,000,000”.
Federal Highway Administration
OFF-SYSTEM RAILWAY-HIGHWAY CROSSINGS
23 USC 130 note.
For necessary expenses for the elimination of hazards of railway-highway crossings on roads other than those on any Federal-aid system in accordance with the provisions of. section 203 of the “Highway Safety Act of 1976”, to remain available until September 30, 1980; $75,000,000.
SAFER OFF-SYSTEM ROADS
For necessary expenses to carry out the provisions of 23 U.S.C. 219; $200,000,000, to remain available until September 30, 1980.
TRAFFIC CONTROL SIGNALIZATTON DEMONSTRATION PROJECTS
23 USC 135 note.
For necessary expenses to carry out the provisions of section 146 of the “Federal-Aid Highway Act of 1976”; $10,000,000, to be derived from the Highway Trust Fund and to remain available until September 30, 1980.
HIGHWAYS CROSSING FEDERAL PROJECTS
For an additional amount for “Highways crossing Federal projects” authorized by 23 U.S.C. 156; $15,000,000, to remain available until September 30, 1979.
RAILROAD-HIGHWAY CROSSINGS DEMONSTRATION PROJECTS
23 USC 130 note. 49 USC 1605 note.
For necessary expenses of railroad-highway crossings demonstration projects, as authorized by section 163 of the Federal-Aid Highway Act of 1973, as amended, and title III of the National Mass Transportation Assistance Act of 1974, to remain available until expended, $16,000,000 of which $10,666,667 shall be derived from the Highway Trust Fund.
Federal Railroad Administration
NORTHEAST CORRIDOR IMPROVEMENT PROGRAM
For an additional amount for the Northeast Corridor improvement program, $50,000,000, to remain available until expended.
*981 RAILROAD REHABILITATION AND IMPROVEMENT FINANCING FUNDS
For an additional amount pursuant to sections 502, 505-507, and 509 of the Railroad Revitalization and Regulatory Reform Act of 1976 ( Public Law 94-210 ) as amended, $50,000,000, to remain available until September 30,1978.
45 USC 822, 825-827, 82<
DEPARTMENT OF THE TREASURY
Office of the Secretary
INVESTMENT IN FUND ANTICIPATION NOTES
For an additional amount for investment in fund anticipation notes, $50,000,000, to remain available until September 30, 1978.
CHAPTER V
DEPARTMENT OF THE TREASURY
Internal Revenue Service
ACCOUNTS, COLLECTION AND TAXPAYER SERVICE
For an additional amount for “Accounts, collection and taxpayer service”, $2,000,000.
TITLE II
GENERAL PROVISIONS
Sec. 201. No part of any appropriation contained in this Act shall remain available for obligation beyond the current fiscal year unless expressly so provided herein.
Approved May 13, 1977.
LEGISLATIVE HISTORY:
HOUSE REPORTS: No. 95-66, No. 95-66, pt. II (Comm, on Appropriations) and No. 95-238 (Comm, of Conference).
SENATE REPORT No. 95-58 (Comm, on Appropriations).
CONGRESSIONAL RECORD, Vol. 123 (1977):
Mar. 15, considered and passed House.
May 2, considered and passed Senate, amended.
May 4, House agreed to conference; receded and concurred in certain Senate amendments with amendments.
May 5, Senate agreed to conference report; concurred in House amendments to Senate amendments.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 13, No. 20:
May 13, Presidential statement.
*982 RULES AND REGULATIONS
Title 13 — Business Credit and Assistance
CHAPTER III — ECONOMIC DEVELOPMENT ADMINISTRATION, DEPARTMENT OF COMMERCE
PART 317 — ROUND II OF THE LOCAL PUBLIC WORKS CAPITAL DEVELOPMENT AND INVESTMENT PROGRAM Grants of Assistance
AGENCY: Economic Development Administration, Department of Commerce.
ACTION: Final rule.
SUMMARY: These regulations contain the requirements and procedures governing the grant of assistance under round n of the Local Public Works program. They implement the amendments made to the Local Public Works Capital Development and Investment Act of 1976 by the Public Works Employment Act of 3977, Pub. L. 95-28, and administrative decisions regarding the grant of assistance under that Act.
DATES: Effective date: May 27, 1977. Comments by: June 27. 1977.
.ADDRESS: Send comments to: Assistant Secretary for Economic Development, U.S. Department of Commerce, Room 7800B, Washington, D.C. 20230. FOR FURTHER INFORMATION CONTACT:
James F. Marten, U.S. Department of Commerce, Room 7009, Washington, D.C. 20230 (202-377-5441).
SUPPLEMENTARY INFORMATION:
Statement of Program Objectives The national economy and the economies of many areas and regions in this country continue to exhibit levels of distress that are excessive and, consequently, incompatible with our goals as a nation. This distress is reflected in a variety of ways, including high unemployment and inadequate public capital stock. The purpose of this program is to address such problems by providing for the expeditious construction of useful public works and development facilities m these areas.
Previous experience has demonstrated that local and State governments in every section of the country possess the capability to undertake public works projects within a very short time span. Experience has further proven that such projects furnish needed public facilities as well as generate employment. In many cases, this stimulus and the employment generated continue beyond the period of project construction and contribute to the area’s long-term development.
On the basis of our knowledge about public works expenditures and the needs of economically disadvantaged areas and regions, round II of this program has been developed to authorize the immediate funding of local and State government public works facilities in accordance with the following objectives.
To target projects, to the greatest degree possible, to those areas- of greatest unemployment.
To reduce previous funding inequities among different areas and governmental units.
To place maximum emphasis on local decision-making in establishing priorities and the selection of projects.
To increase the program’s efficiency decision-making in establishing priorities and the selection of projects.
To increase the programs’ efficiency while reducing the administrative workload.
To make the program more predictable so that participants and the general public can assess it more readily.
Because these regulations relate to an EDA grant program, they are exempted from the procedures described in section 553 of the Administrative Procedure Act (5 U.S.C. 553). However, in the spirit of public policy set forth in that Act, interested persons may submit written suggestions regarding these regulations to the Assistant Secretary for Economic Development at the above address.
Consideration has been given as to whether matters set forth in these regulations constitute a major proposal with an inflationary impact within the meaning of OMB Circular A-107 and the interpretative guidelines as issued by the Department of Commerce. A determination has been made that these regulations do not extend beyond the statute, and therefore there is no inflationary impact of these regulations beyond the statute.
Accordingly, 13 CFR Chapter ni is amended by adding a new Part 317 to read as follows:
Subpart A — Introduction
Sec.
317.1 Purpose.
3X7.2 Definitions.
Subpart B — Eligibility Criteria
317.10 Eligible applicants.
317.11 Eligible areas.
317.12 Eligible applications ior round n funding.
317.13 Types of grants.
317.14 Eligible projects.
317.15 ineligible projects.
317.16 Projects ineligible unless accompanied by unusual circumstances.
817.17 Project costs.
317.18 Ineligible project costs.
317.19 Construction requirements.
317.20 Maximum project cost.
*983 Subpart C — Application Procedure
Sec.
317.30 Revival of applications currently on file.
317.31 New applications.
317.32 Acceptance of revived and new applications.
317.33 Project areas.
317.34 Determination of unemployment data.
317.35 Certifications.
317.36 False or Inaccurate statements.
317.37 Applicant’s priority rating of projects.
317.38 Amendment of existing applications.
Subpart D — Allocation of Program Funds
317.40 Allocation of'funds to the States.
317.41 Statutory minimum and maximum State allocations.
317.42 Indian tribe set-aside.
317.43 Procedural errors set-aside.
Subpart E — Planning Targets
317.50 General considerations.
317.51 State planning target.
317.52 Sub-State area planning targets.
817.53 Sub-State applicant planning targets.
Subpart F — Project Selection Procedure
317.60 Conserving energy.
317.61 Projects selected from national set-asides.
317.62 Projects selected from State-wide planning targets.
317.63 Projects selected from sub-State planning targets.
317.64 Undue concentration.
317.65 Similar applications.
Subpart G — General Requirements
317.70 Environmental considerations.
317.71 Compliance with other Federal requirements.
317.72 Transfer of grant awards to drought-related projects.
317.73 Lease of project facilities.
317.74 Final determination.
317.75 Suspension and termination.
Subpart H — Eligibility of Non-Profit Entities
317.80 Grants for non-profit entities.
Authority: Section 701, Pub. L. 89-136, 79 Stat. 570 (42 U.S.C. 3211); Pub. L. 94-369, 90 Stat. 999 (42 U.S.C. 6701);. Pub. L. 95-28, 91 Stat. 116; Department of Commerce Organization Order 10-4 (September 30, 1975), as amended ( 40 FR 66702 as amended at 40 FR 58878 and 41 FR 35548 ).
Subpart A — Introduction
§ 317.1 Purpose.
The purpose of this part Is to set forth the requirements and procedures pursuant to which eligible applicants may receive grants under the “local Public Works Capital Development and Investment Act of 1976," as amended by the “Public Works Employment Act of 1977," Pub. L. 95-28.
§ 317.2 Definitions.
“Assistant Secretary” means the Assistant Secretary of Commerce for Economic Development or his delegate.
“Endorsement” means the process by which an applicant can select a project, which was originally submitted by another applicant, for consideration for funding from its planning target.
“General purpose unit of local government” means any city, county, town, parish, Indian tribe, or any other “unit of general local government” as included within the definition of that term by section 104 of the Intergovernmental Cooperation Act of 1968 (42 U.S.C. 4201 et seq.).
“Indian tribe” means the governing body of a -tribe, nonprofit Indian corporation (restricted to Indians), Indian authority, or other tribal organization, or entity, or Alaskan native village.
“Initiation of construction” means that notice to proceed or its equivalent has been Issued or on-site labor has begun, except where on-site labor has commenced on the project hut the project was abandoned due to lack of funds or where the project Is to expand or modify a completed facility which has integrity in and of itself.
“Local Public Works Act” means the “Local Public Works Capital Development and Investment Act of 1976,” as
amended by the “Public Works Employment Act of 1977,” Pub. L. 95-28.
“LocaJ government” means any city, county, town, parish, or other political subdivision of a State (including local ,school districts), and any Indian tribe.
“Maintenance costs” means costs that are incurred for any necessary repairs or upkeep of property which neither add to the permanent value of the property nor appreciably prolong its intended life, but rather keep it in an efficient operating condition.
‘‘Minority business enterprise” means a business at least fifty percent of which is owned by minority group members or, in the case of a publicly owned business, at least fifty-one percent of the stock of which is owned by minority group members.
“Minority group member” means a citizen of the United States who is Negro-Spanish-speaking, Oriental, Indian, Eskimo, or Aleut.
“Non-primary city” means any city, township, or village with a population less than 50,000 persons.
“Pocket of poverty” means a project area with a population of 4,000 or more *984 persons and an unemployment rate of at least 8.5 percent which becomes qualified for assistance using the procedures contained in section 108(e) of the Local Public Works Act. A pocket of poverty must be located within a primary city which did not receive a planning target.
“Political subdivision of a State” means the agencies, instrumentalities and authorities established or authorized by State law including, but not limited to, special districts and regional authorities formed by local governments.
“Project area” means a primary city; the balance of a county in which a primary city is located; a county without a primary city; a pocket of poverty; or an Indian reservation or tribal land (trust and/or restricted land), as appropriate under the provisions of § 317.-33.
“Primary city” means any city or township (which performs the same services as a city) with a population of 50,000 or more persons, as determined by the Bureau oí the Census 1973 estimates.
“Renovation, repair, or other improvements” means only those activities which either substantially or appreciably increase the value or prolong the life of a public facility and excludes those activities which keep the public facility in ordinary efficient operating condition during its probable useful life.
“Round I” of funding under the local Public Works program refers to the funding of projects with money appropriated by Pub. L. 94-447.
“Round II” of funding under the Local Public Works program refers to the funding of projects with money appropriated by Pub. L. 95-29.
“State” includes the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Trust Territory of the Pacific Islands.
Subpart B — Eligibility Criteria
§ 317.10 Eligible applicants.
A State or a local government, as defined in § 317.2, is eligible for assistance under this part if it is located in an area described in § 317.11.
§ 317.11 Eligible areas.
(a) Subject to the provisions of subsection (b) of this section, assistance under this part may only be extended to eligible applicants located in project areas, as defined in § 317.2, for which planning targets have been established. Planning targets have been established in the following manner, subject to the provisions of § 317.42 and Subpart E of this part.
(1) Where the State average unem-' ployment rate is 6.5 percent or higher, planning targets have been established for project areas with unemployment rates of at least 6.5 percent.
(2) Where the State average unemployment rate is less than 6.5 percent, planning targets have been established for project areas with unemployment rates of at least the State average unemployment rate.
(3) Notwithstanding the provisions of paragraphs (1) and (2) of this subsection, planning targets have been established for pocket of poverty project areas only where such areas have unemployment rates of at least 8.5 percent.
(b) In States which are receiving the statutory minimum allocation of Local Public Works funds and for which the Assistant Secretary has waived the priority ranking of applicants required by section 108(c) of the Local Public Works Act, assistance under this part may be extended to eligible applicants in project areas as necessary to expend the statutory minimum allocation.
§ 317.12 Eligible applications for round II funding.
The following applications shall be eligible for consideration for funding under round n of the Local Public Works program;
(a) Applications for Local Public Works projects submitted by eligible applicants located in eligible areas, as defined in § 317.11, which were received by EDA before December 24, 1976, including applications originally filed before that date which were returned for deficiencies; and
(b) New applications from eligible applicants located in eligible areas subject to the requirements of § 317.31.
§ 317.13 Types of grants.
(a) Direct grants. (1) The Assistant Secretary may make direct grants to any State or local government for construction (including demolition and other site preparation activities), renovation, repair, or other improvement of local public works projects, including those for which Federal financial assistance is authorized under provisions of law other than the Local Public Works Act. Such grants may include funds for the completion of plans, specifications and estimates where additional architectural and engineering work or related planning is required to permit construction of the project under this section.
*985 (2) Applications under this section will be approved only if the applicant submits with its application, if applicable and required by EDA, a written certification from the other Federal agency/ agencies primarily concerned with projects of the type involved in the application that the project meets all applicable Federal statutory and regulatory requirements to the extent necessary to assure the utilization of the project for the services intended.
(3) The Federal share of any project for which a grant is made under this subsection shall be 100 percent of the cost of the project exclusive of any funds budgeted and available or otherwise specifically committed for the project by the applicant.
(b) Supplemental grants. (1) The As- . sistant Secretary may make supplemental grants for the purpose of increasing the Federal contribution to 100 percent of the project cost for any Federally assisted public works project authorized by any Federal law other than the Local Public Works Act.
(i) Ordinarily, the Assistant Secretary will award supplemental grants increasing the Federal contribution to 100 percent of the project cost exclusive of any funds budgeted and available or otherwise specifically committed for the proj - ect by the applicant.
(A) For the funding of revived applications during round U, the Assistant Secretary may waive the requirement of paragraph (b) (i) of this section where:
(1) The applicant had provided the assurance that no funds were budgeted and available or otherwise specifically committed for the project in round I; and
(2) The applicant demonstrates that local funds apparently available were diverted from some other use solely to meet the additional requirements of other Federal programs caused by the delay in funding between rounds I and II.
(ii) The applicant shall submit with its application a written certification that actual construction of the project has not yet been initiated because of lack of funding for the non-Federal share.
(A) The Assistant Secretary may waive this requirement where he finds that construction was initiated after filing of the application under round I due to the requirements of the other Federal program.
(iii) The applicant shall submit written certification obtained from the other Federal agencies involved in the project that:
(A) Federal financial assistance for the project has been aDproved and the funds are immediately available for the project; and
(B) the project meets all applicable Federal statutory and relevant related requirements.
(2) The Assistant Secretary also may make grants in an amount necessary to provide all or part of the required State or local share (but not both shares) of the cost of any public works project for which financial assistance is authorized by State or local law'requiring such contribution if the applicant submits with its application a written certification from the appropriate authority that:
(i) The share of financial assistance not applied for has been properly approved and is immediately available for the project;
(ii) The project meets all applicable statutory and other relevant requirements of the law; and
(iii) Construction of the project has not yet been initiated.
<3) Grants under this subsection may include funds for the completion of plans, specifications, and estimates where additional architectural and engineering ' work or related planning is required to permit construction of the project under this section.
§ 317.14 Eligible projects.
Eligible projects include projects for the construction of public works facilities, including but not limited to municipal offices, courthouses, libraries, schools, police and fire stations, detention facilities, water and sewer lines, streets and roads (including curbs), sidewalks, lighting, recreational facilities, convention centers, civic centers, museums, other public facilities, and the transportation of and providing of water to drought-stricken areas as designated by the Federal Disaster Assistance Administration or other Federal agency or department authorized to designate drought-stricken areas.
§ 317.15 Ineligible projects.
The following projects shall be ineligible for funding under this part:
(a) Canals and watercourses. Unless the requirements of § 317.72 are met, no grant shall be made under this part for any project having as its principal purpose and permanent effect:
(1) The channelization, damming, diversion, or dredging of any natural watercourse, or
(2) The construction or enlargement of any canal except a canal or raceway designated for maintenance as a historic site.
*986 (b) Projects on which construction has been initiated. (1) For projects seeking a supplemental grant under § 317.13 (b) (1), the project will be eligible where construction has been initiated if the Assistant Secretary determines that construction was initiated after filing the application under round I due to the requirements of the other Federal program.
(c) Projects on which on-site labor cannot begin within 90 days after receipt of notification of project approval.
(d) Projects with extremely high ratios of labor costs to total project costs (greater than 80 percent) and projects with extremely low ratios of labor costs to total project costs (less than 10 percent) .
(e) Projects whose costs exceed the planning targets established by subpart E.
§ 317.16 Projects ineligible unless accompanied by unusual circumstances.
Projects will not normally be approved where any of the following conditions exist.
(a) The applicant has not obtained rights to the project site, including easements and rights-of-way, in one of the following ways:
(1) The eligible applicant owns the project facility and/or site clear of any encumbrances;
(2) The eligible applicant holds a noncancellable long-term lease on the project facility and/or site which is defined as 20 years or the useful life of the facility, whichever is longer; or
(3) The eligible applicant holds a clearly enforceable option through time of grant approval to purchase the proj- . ect facility and/or site and demonstrates that it has sufficient funds available to complete the purchase.
(b) The project request is for a grant supplemental to another Federal, State or local grant which has not been approved by the applicable grant agency.
(c) The project’s construction will involve the use of . raw materials not mined or produced in the United States, or United States manufactured articles not substantially made from raw materials mined or produced in the United States, or manufactures not manufactured in the United States. ,
(1) The restriction; contained in paragraph (c) of this section will not apply to any project for which the Assistant Secretary makes one of the following determinations:
(i) The restriction is not in the public interest; or
(ii) The restriction would cause unreasonable project costs; or
(iii) Materials or articles, either raw or manufactured, needed in the construction of the project are not available in the United States in reasonable and sufficient commercial quantity and satisfactory quality.
§ 317.17 Eligible project costs.
(а) The following types of project costs are eligible for funding under this part.
(1) Construction and facility improvement costs;
(2) Eligible expenses and payments under Titles H and HI of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 ( Pub. L. 91-646 );
(3) Costs for capital equipment not included in the construction contract;
(4) Costs for completing and updating plans, specifications, and estimates— where either architectural design/preliminary engineering or related planning has already been undertaken, and where, additional architectural and engineering work or related planning is required to permit construction of the project;
(5) Other A/E costs such as inspection fees and test borings;
(б) Administrative costs including legal and audit costs; and
(7) Other costs not inconsistent with the Local Public Works Act and allowed by Federal Management Circular No. 74-4.
§ 317.18 Ineligible project costs.
(a) Real property. No part of any grant made under this part may be used for the acquisition of any interest in real property.
(b) Maintenance. No part of any grant made under this part may be used for the payment of maintenance costs in connection with a project constructed (in whole of in part) with Federal financial assistance under the Local Public Works Act.
(c) Cost overruns. No part of any grant made under this Act may be used for cost overruns for public works projects previously funded under this Act.
(d) Prior expenses. No part of any grant made under this part may be used for project costs for administration, plans, specifications, estimates or other A/E costs, which have been incurred prior to the date of original application.
(e) Construction by State or local governments or Indian tribes. No part of any grant made under this part may be used for the payment of construction activ *987 itles directly performed by any department, agency or Instrumentality of any State or local government or any Indian tribe.
(f) Interest. No part of any grant made under this part may be used for interest on interim construction financing except for supplemental grants where authorized by other program legislation.
§ 317.19 Construction requirements.
(a) Competitive bidding. (1) Construction of each project funded under this part shall be performed by contract awarded by competitive bidding, unless
(1) The Assistant Secretary makes a determination that, under circumstances relating to that project, a method of contract award other than competitive bidding is in the public interest.
(2) If the Assistant Secretary does not waive the competitive bidding requirement, the following procedures apply.
(1) Contracts for the construction of such projects shall be awarded on the basis of the lowest responsive bid submitted by a bidder meeting established criteria of responsibility.
(ii) The award of a contract for the construction of a project funded under this part may be subject to review by the Assistant Secretary. The Assistant Secretary may withhold his concurrence from the award of a contract for good cause.
(iii) No requirements or obligations shall be imposed as conditions precedent to the award of a contract or to the Assistant Secretary’s concurrence in the award unless such requirements or obligations are lawful and set forth in the advertised specifications.
(b) Minority business enterprise. (1) No grant shall be made under this part for any project unless at least ten percent of the amount of such grant will be expended for contracts with and/or supplies from minority business enterprises.
(2) The restriction contained in paragraph (1) of this subsection will not apply to any grant for which the Assistant Secretary makes a determination that the ten percent set-aside cannot be filled by minority businesses located within a reasonable trade area determined in relation to the nature of the services or suppplies intended to be procured.
§ 317.20 Maximum project cost.
The maximum amount of financial assistance made available under this part should not exceed $5 million for each project; however, the Assistant Secretary may, in his discretion, waive this policy for good cause.
Subpart C — Applicatior. Procedure
§ 317.30 Revival of applications currently op file.
(a) Unfunded applications meeting the criteria described at § 317.12(a), with the exception of applications described in subsection (b) of this section, will be revived if the project area in which such applicants are located receives a planning target or set-aside. EDA will revive, these applications for consideration under the second round of funding of the Local Public Works program in the following manner.
(1) EDA will revise and update these applications to bring them into conformance with the new program requirements and procedures as described in these regulations.
(2) The applicant will provide EDA with such additional information and certifications, including revised project cost estimates, as required to bring the application into conformance with the legislative and administrative changes to the Local Public Works program.
(i) The information and certifications described in paragraph (21 of this subsection will be provided to EDA on such forms and in such mann'er as the Assistant Secretary directs.
(b) Pocket of poverty applications currently on file and non-pocket of poverty applications currently on file for which applicants request consideration as pocket of poverty applications will be revived for consideration under round II of the Local Public Works program in the following manner.
(1) Where an applicant requests use of the pocket of poverty criteria in determining its project area, that request will be granted only if the applicant meets the requirements of 5 317.51(a) «).
(2) All projects using the pocket of poverty criteria must be located in the community or neighborhood proposed as the project area. Where necessary, applicants will revise their applications to locate the projects within the community or neighborhood proposed: as the pocket of poverty area.
(3) Pocket of poverty applicants will provide EDA with the following information:
(i) An exact description of the community or neighborhood proposed as the project area;
(ii) The appropriate unemployment data for the project area obtained from Ihe State Employment Security Agency; and
*988 (ill) Such additional information and certifications, including revised project cost estimates, as required to bring the application into conformance with the legislative and administrative changes to the Local Public Works program.
(c) Applications currently on file will be deemed revived by EDA when all relevant and necessary materials for the reevaluation of the application are received in the proper form and manner from the applicant.
§ 317.31 New applications.
(a) Subject to the provisions of 5 317.53(c)(2),- new applications shall be received where necessary to use a State’s allocation or an applicant’s planning target or an Indian tribe set-aside.
(b) Any new application under this part must be properly prepared on appropriate forms, as prescribed by the Assistant Secretary, and must contain all the information and certifications required by this part.
(c) New applications shall only be submitted to the appropriate EDA Regional Office as provided in 13 CPR 301.31.
(d) New applications shall be recorded and deemed received upon their arrival at the appropriate EDA Regional Office.
§ 317.32 Acceptance of revived and new applications.
EDA shall endeavor, within five working days from the date a new or revived application is actually received by the appropriate Regional Office, to determine if the application has been completely and properly prepared. An application may be rejected (denied) unless it contains full and accurate information as required by this part. The Regional Director should notify the applicant if the application contains deficiencies and state what is needed to properly complete the application. EDA reserves the right during the 60 day period after receipt of an application to reject an application for substantially being incomplete, improperly prepared, or otherwise failing to meet the requirements of this part.
§ 317.33 Project areas.
The project area of eligible applicants shall conform to the following requirements:
(a) Counties with no primary cities. The project area shall be the county for all applicants.
(b) Counties with one or more primary cities.
(1) Projects located in the primary city: the project area shall be the city.
(2) Projects located outside primary cities: the project area shall be the balance of the county excluding the primary. cities.
(c) Pocket of poverty applicants. The project area shall be the community or neighborhood of the primary city, as described in 5 317.51(a)(1), in which the project is located.
(d) Indian tribe applicants. The project area shall be the reservation or tribal land on which the project will be located.
§ 317.34 Determination of unemployment data.
(a) In considering applications during the round II of funding, EDA shall utilize the following data:
(1) The average number of unemployed persons in the applicant’s project area during the twelve most recent consecutive months available; and
(2) The average unemployment rate of the applicant’s project area for the twelve most recent consecutive months available.
(b) Unemployment data for project areas of applications currently on file and new applications will be determined as follows:
(1) Primary city applicants. EDA shall utilize the appropriate data for the city from the Bureau of Labor Statistics of the Department of Labor.
(2) Balance of county and county without primary city applicants. EDA shall utilize the appropriate data iron? the Bureau of Labor Statistics of the Department of Labor.
(3) Pocket of poverty applicants. Tire applicant shall define the exact location of the community or neighborhood in which the project will be located. Unemployment data will be obtained from the State Employment Security Agency for that common!ty or neighborhood.
(4) Indian tribe applications. The Assistant Secretary may use population data as a proxy for unemployment data EDA shall utilize the appropriate data from the Bureau of Indian Affairs.
§ 317.35 Certifications.
An application shall be rejected unless it includes all the following materials:
(a) It contains adequate certification by the applicant and by any “other parties” as defined in 15 CPR Subtitle A, Part 8, that no person shall, on the grounds of race, color, sex (as required by section 110 of Pub. L. 94-369 ), or national origin, be excluded from participation in, be denied the benefit of, or be subjected to discrimination under the proposed project.
*989 (1) The application shall also contain an assurance that the applicant is not involved in any civil rights litigation; or, if it is involved in a lawsuit or Federal administrative action alleging discrimination, the applicant shall provide a brief narrative description of the action alleging discrimination and its outcome.
(2) The application shall also contain assurances of compliance with: Title VI of the Civil Rights Act of 1964; 28 CFR Part 42, Subpart F to the extent set forth in EDA’s policies and guidelines; and Executive Order 11246 “Equal Employment Opportunities.”
tfb) It contains a certification by the applicant that construction on the project has not yet been Initiated unless the provisions of 5 317.15(b)(1) or §317.43 (b) (3) sire met.
(c) It contains a certification, satisfactory to the Assistant Secretary, that on-site labor can begin within ninety days of project approval.
(d) Where applicable, it contains a certification that the applicant hEis related the proposed project to existing approved plans and programs of a local community development or regional development nature so as to avoid harmful or costly inconsistencies or contradictions.
(e) Where appropriate, it contains certification and evidence that the proposed project will promote or advance longer range plans and programs.
(f) It contains certification, by the properly authorized official of the Federal agency or State or local government, that no funds budgeted and available or otherwise specifically committed for the project applied for in its application shall be reduced, diminished, or replaced by funds requested under this part.
(1) With respect to supplemental grants under 5 317.13(b)(1), this certification is not necessary if the applicant heis obtained a waiver from the Assistant Secretary under 5 317.13(b) (1) (i) (A).
(g) It contains adequate assurances that all laborers and mechanics employed on the proposed project will 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).
(h) It contains a certification by the applicant that no contract for the project will be awarded to a bidder who will employ illegal aliens.
(i) It contains adequate Eissurances that the project will be constructed from raw materials mined or produced in the United States and from United States manufacturers substantially made from materials mined, produced or manufactured in the United States, unless the Assistant Secretary has made a determination under § 317.16(c) (1) that this requirement is not applicable to the applicant’s project.
(j‘) Unless the Assistant Secretary has made a determination of inapplicability under 5 317.19(b)(2), it contains certification satisfactory to the Assistant Secretary that at least ten percent of the amount of the grant will be expended for contracts with and/or supplies from minority business enterprises.
(k) It contains certification satisfactory to the Assistant Secretary that the project will be designed and constructed in accordance with the requirements for providing access to the physically handicapped and elderly as contained at 42 U.S.C. 4151 et seq.
<1) The Architectural and Transportation Barriers Compliance Board, established by the Rehabilitation Act of 1973, is authorized to insure that any construction and renovation done pursuant to any grant made under the Local Public Works Act complies with the accessibility standards for public buildings and facilities issued under the Act of August 12.1968.
(l) Where sm application uses the pocket of poverty project area, it contains certification satisfactory to the Assistant Secretary that employment engendered .by the project will be offered preferentially to the residents of the neighborhood or community which defines the project area.
(m) Where an application involves a project normally funded by another Federal agency, it contains certification as required in §317.13 (a)(2) and (b).
(n) It contains certification that special consideration shall be given to the employment on the project of qualified veterans who:
(1) Have a disability rating of 30 percent or more, or
(2) Served on active service for more than 180 days in Vietnam and were discharged or released from service — other than dishonorably — within 48 months.
§ 317.36 False or inaccurate statements.
(a) An application shall be rejected unless it is, in the opinion of the Assistant Secretary, accurate and complete.,
(b) Applicants should be advised that false representations and/or certifications in connection with applications for assistance under this part may be the basis for criminal liability under title 18 of the United States Code.
*990 § 317.37 Applicant’s priority rating of projects.
(a) An applicant who has more than one application eligible for funding under the second round of the Local Public Works program shall submit as part of each such application its priority rating for each project for which it has applied.
(b) State governments, county governments, primary city governments, and any general purpose unit of local government may endorse a project of another applicant. If such a project is funded, it will apply against the planning target of the endorsing applicant but not the planning target of the receiving applicant.
§ 317.38 Amendment of existing applications*
Applications on file from round I may be amended to modify or change the project when, in the opinion of the Assistant Secretary, a compelling reason for such modification or change exists. Subpart D — Allocation of Program Funds
§ 317.40 Allocation of funds to tlie States.
(a) Subject to program administrative costs, statutory minimum and maximum allocation requirements and statutory set-asides, 65 percent of the amounts appropriated for round H of the Local Public Works program will be allocated to each State based on its share of the total number of unemployed persons in all the States; the remaining 35 percent of the amounts appropriated for round II of the Local Public Works program will be allocated to those States with an average unemployment rate for the preceding twelve month period in excess of six and one-half percent (6y2 percent) on the basis of the relative severity of unemployment in such States.
(b) Amounts allocated to the States according to this formula constitute State planning targets.
§ 317.41 Statutory minimum and maximum State allocations.
(a) The minimum allocation to each State of all amounts appropriated after the date of enactment of the Public Works Employment Act of 1977 to carry out this part shall be determined as follows:
(1) Subject to the provisions of paragraph (2) of this subsection, each State will receive at least three-quarters of one percent of such amounts appropriated to carry out this part.
(2) Guam, the Virgin Islands, American Samoa, and the Trust Territory of the Pacific Islands, in the aggregate, shall receive not less than one-half of one percent of such amounts appropriated to carry out this part.
(i) Population and other factors, as may be determined by the Assistant Secretary, will be used to establish planning targets for these territories.
(b) States whose unemployment data was converted for the first time under a new methodology to the benchmark-data of the current population survey annual average compiled by the Bureau of Labor Statistics shall receive a percentage of funds under round n at least as great as the percentage of funds allocated to that State under round I prior to January 1, 1977.
(c) The maximum allocation for any State of all amounts appropriated after the date of enactment of the Public Works Employment Act of 1977 to carry out this part shall be twelve and one-half percent of such appropriation.
§ 317.42 Indian tribe set aside.
(a) The maximum allocation of all amounts appropriated after the date of enactment of the Public Works Employment Act of 1977 for projects sponsored by Indian tribes shall be two and one-half percent of such appropriation.
(b) All projects applied for by Indian tribes will be funded from this allocation, with the exception of those projects which qualify for funding under § 317.43.
(c) Each Indian tribe will receive a planning target determined in the follow - .ing manner.
(1) Subject to the provisions of paragraph (c) (2) of this section, each Indian tribe’s planning target will be based on population data, as determined by the Assistant Secretary.
(2) No Indian tribe will receive a planning target exceeding twelve and one-half percent (12 V2 percent) of the amount determined by subsection (a) of this section plus the amount of round I funds expended on Indian applications.
(d) In the event applications have not been filed to exhaust the planning targets established under this section by September 1,1977, such planning targets may be administratively reapportioned by the Assistant Secretary.
§■ 317.43 Procedural errors set aside.
(a) An applicant who made an application before December 24, 1976 and whose application was not received, was not considered, or was rejected solely because of an error by an officer or employee of the United States may petition the Assistant Secretary to reconsider his *991 application, subject to the provisions of § 317.61(b).
(b) In order to be funded from this set-aside, a project must meet all of the following requirements:
(1) The project would have been selected for funding under round I of the Local Public Works program but for the error described in subsection (a) of this section;
(2) The project has been identified by EDA as eligible for funding from the procedural error set-aside; and
(3) The project met all the requirements of the Local Public Works. Act as in effect at the time of the error.
(c) Not to exceed seventy (70) million dollars may be used to fund projects under the authority of this section.
Subpart E — Planning Targets
§ 317.50 General considerations.
In order to insure an equitable geographic distribution of funds, EDA has established planning targets for States, sub-State areas and sub-State applicants.
(a) Sub-State area planning targets are computed for project areas which have unemployment rates equalling or exceeding the lower of 6.5 percent or the State average unemployment rate.
(1) Within each'State, these planning targets will be ranked and projects will be selected from high ranking areas until the amount of planning target is expended.
(2) Sub-State area planning targets and sub-State applicant planning targets will reflect the total six (6) billion dollar Local Public Works program authorization, constructively following the sub-State 65/35 formula, as set forth in 1317.52(a), for round I funds. Projects which were selected for funding during the round I of the program will be deducted from the sub-State area planning targets and sub-State applicant planning target.
(3) Certain eligible sub-State areas and sub-State applicants will not receive planning targets due to the procedure described in paragraphs (a) (1) and (2) of this section which will result in insufficient funds.
(4) A minimum planning target level of 75,000 dollars will be set in order to carry out the public works aspect of this program. In the case of areas which would receive a planning target below this minimum, no planning target would be established.
(i) Planning target funds below the 75,000 dollar minimum will be administratively reapportioned to the county government.
(b) Funds requested for projects may not exceed the appropriate planning targets.
(c) EDA will use sub-State area and applicant planning targets as aids in the distribution of funds under this part. These planning targets do not, however, constitute entitlements. The Assistant Secretary reserves the right to adjust these planning targets as necessary to assure that each eligible area and applicant receives a planning target commensurate with its distress. If an eligible area or applicant does not receive a planning target which reflects its level of distress due to miscalculation, the Assistant Secretary may re-adjust other sub-State planning targets to rectify the miscalculation.
§ 317.51 State planning target.
Each State’s overall planning target was established pursuant to the allocation formulae described in §§ 317.40 and 317.41, as appropriate. From each State’s planning target, the following Statewide planning targets will be deducted.
(a) Pocket of poverty planning target. An amount, determined by multiplying the number of primary cities as described in paragraph (1) of this subsection by one (1) million dollars, will be deducted to fund applications from pocket of poverty areas. However, not more than twenty million dollars shall be available in any one State to fund these projects.
(1) Projects to be funded from this deduction must be located in a city which did not receive a planning target.
(2) Each pocket of poverty area must have a population of 4,000 or more persons and an unemployment rate of at least 8.5 percent for the most recent twelve months. A pocket of poverty must be a contiguous area and separate and distinct from other pocket of poverty areas. A pocket of poverty area may not be subdivided.
(3) Applicants with planning targets may fund projects in pocket of poverty areas from their planning targets.
(b) State government planning target. Except as the Assistant Secretary determines for the Commonwealth of Puerto Rico, State governments will be given a planning target which will be eight (8) percent of the total State allocation. The amount of this planning target is based on the approximate proportion of the dollar value of State government applications on file to the dollar value of the total number of applications from all States on file from round L
(c) In the event applications have not been filed to exhaust the planning *992 targets established under this section by_ September 1, 1977, such planning targets" will be administratively reapportioned within the State by the Assistant Secretary.
§ 317.52 Sub-Stale area planning targets.
The amount of each State’s allocation available for sub-State area planning targets will consist of the State’s statutory allocation less the amount of the planning targets described in $ 317.51.
(a) EDA has established planning targets for eligible sub-State areas, subject to the provisions of § 317.50(a), based on the sub-State 65/35 formula, which is the relative need of an area as determined by its number of unemployed persons compared to the number of unemployed persons in all eligible areas of the State and its unemployment rate compared to the lower of 6.5 percent or the State unemployment rate. Planning targets have been stablished in this manner for the following types of areas:
(i) Primary city?
(ii) Balance of county;
(iii) County with no primary cities.
(b) The sub-State areas described in subsection- (3) of this section will be ranked according to their respective planning targets which will reflect the relative distress in each of the areas.
§ 317.53 Sub-State applicant planning targets.
EDA has divided the sub-State area planning targets into sub-State applicant planning targets. Subject to the provisions of § 317.50, EDA has established these applicant planning targets for the following types of applicants.
(a) County government. This planning target will be determined for each State, based on the relative activity of county governments as determined by the dollar value of county government applications filed with EDA during round' I compared to the total dollar value of applications filed by all applicants, with the exception of Indian tribes, in that State during round I. Subject to the joint priority agreement with the school district set forth in paragraph (d) of this section, this planning target shall be available for funding projects of the county government.
(b) Primary city government. Subject to the joint priority agreement with the school district set forth in paragraph (d) of this section and subject to any incorporated area in the city which will share in the planning target, this planning target shall be available for funding projects of the city government.
(c) Non-primary cities/townships located in balance of county and county without primary city areas. The funds allocated to the balance of county and county without primary city have been further distributed to non-primary cities and townships within these areas as applicant planning targets.
(1) These applicant planning targets are based on the unemployment data of the non-primary city or township, calculated by EDA according to the census share method and according to the sub-State 65/35 formula.
(2) Normally, EDA has established these planning targets only for non-primary city/township applicants which had submitted applications in round I. Provided, however, whan an area’s planning target funds exceed existing applications on file by 25 percent or $200,-000, whichever is greater, the excess funds in the planning target will be made available for new applications to be filed by applicants in the area. Provided further, however, that in accepting applications from these applicants, EDA will allow only that applicant(s) with the highest distress factors to file such application.
(3) Subject to the joint priority agreement set forth in paragraph (d) of this section, these applicant planning targets shall be available for projects of the non-primary city or township.
(d) School districts. School districts will share in the applicant planning targets established for primary cities and non-primary cities and townships. School districts will also share in the county government planning target if the school district serves the whole county or a major region. By joint agreement between the school district and the above applicants, these applicants will submit the priority ratings of their projects as required by § 317.37.
(1) In order to share in the planning target of these applicants, the school district must have authority under local law to file an application.
(2) In order to share in the applicant planning target of a primary city or non-primary city/township, the school district project must serve the residents of the primary city or non-primary city/township.
(3) In order to share in the county government planning target the school district project must serve the population of the whole county or major region,
(4) Should the school district and the applicant whose planning target it shares fail to come to an agreement with respect to prioritizing their proj *993 ects, EDA will select their projects according to factors which include but are not limited to:
(i) Job creating potentials;
(ii) Time necessary to complete the project;
(iii) Energy conservation;
(iv) Long-term economic benefits;
(v) Critical local needs.
(e) In the event applications have not been filed to exhaust the planning targets established under this section by September 1, 1977, such planning target funds will be administratively reapportioned by the Assistant Secretary.
Subpart F — Project Selection Procedure
§ 317.60 Conserving energy.
(a) In making grants for projects for construction, renovation, repair or other improvement of buildings, EDA shall also give consideration as between such building projects to those projects which will result in conserving energy. Such projects include, but are not limited to, projects to redesign existing public facilities for energy conservation purposes and projects using alternative energy systems.
(b) In giving such consideration EDA will permit increased funding for projects which meet the provisions of this section subject to the requirements of 5 317.50(b).
§ 317.61 Project- selected from national set-asides.
(a) Indian set-aside. Each Indian reservation or tribal land has a planning target.
(1) In approving projects under this set-aside, EDA will take Into consideration the number and dollar amount of projects approved under round I.
(b) Procedural error set-aside. (1) In order to be funded from this set-aside, a project must meet all the following conditions.
(1) The project must be eligible under § 317.43.
(ii) The project is located in an area which does not have a planning target.
(iii) The project met the requirements of the Local Public Works Capital Development and Investment Act of 1976, as enacted on July 22, 1976.
(2) Error projects located in eligible areas which receive planning targets will be funded from State and sub-State planning targets, but only if chosen by their applicants as priority projects.
(i) In the event the applicant’s planning target is insufficient to fund the error project completely, the applicant may request the Assistant Secretary to fund the remainder from the error set-aside.
(ii) Projects funded in this manner , will be counted against the appropriate area and applicant planning targets or set-asides as calculated on the basis of the total Local Public Works Act authorization.
(3) In exercising its privilege of prioritizing projects, an applicant shall be under no obligation to request priority for any project which may have been previously denied in error, but such choice of another or other projects shall be deemed a waiver of any claim of entitlement or priority for funding of any such project which may have been previously denied as a result of error.
(4) Projects eligible for funding under this subsection must have met all the requirements of the Local Public Works Act as in effect at the time of the error.
§317.62 Projects selected from Statewide planning targets.
(a) Pocket of poverty planning target. Each primary city eligible for funding under § 317.51(a) will submit to EDA a description of its pocket of poverty area, setting forth the numbers and rates of unemployment and total population for that area. Such figures must be certified by the State. Employment Security Agency. EDA will then assign a planning target to each pocket of poverty based on its relative needs as measured by its number and rate of unemployment.
(b) State government planning target. The Governor shall submit a priority ranking of State government projects up to the amount of the State government planning target, provided such projects are located in areas with unemployment rates equally or exceeding the State’s average unemployment rate or 6.5 percent, whichever is lower unless the State receives the statutory minimum allocation.
(1) EDA will select projects in accordance with the Governor’s priorities up to an amount as close as is administratively feasible to the amount of the Slate government planning target,
§ 317.63 Projects selected from sub-State applicant planning targets.
(a) County government, primary city government, and primary city school district projects. County governments, primary city governments, and primary school district applicants which submitted one or more applications shall submit priority rankings of their projects in accordance with §§ 317.37 and 317.53 (a), (b) and (d). EDA will select projects in accordance with § 317.50 and local *994 priorities up to the amount of county government’s/school district’s planning target and primary city government's/ primary city school district’s planning target.
(b) City/township projects in balance of county or counties without primary cities. (1) Non-primary city/township and school district applicants which.have planning targets and which submitted one or more applications shall submit a priority ranking of their projects in accordance with §§ 317.37 and 317.53 <c> and (d). EDA will select projects in accordance with § 317.50 and local priorities up to the amount of their planning targets.
(2) If a town has already exceeded its planning target in round I, it would receive no further projects. Similarly, once a town has reached its planning target with a round H project, no further projects would be selected.
(3) If all local (general purpose and school) projects have been funded or there are no projects available for funding after following the procedures of § 317.53(c) (2), any surplus funds will be administratively reapportioned by the Assistant Secretary.
§317.64 Undue concentration.
The Assistant Secretary reserves the right to vary the selection procedure as necessary to avoid undue concentration of funds in any geographic region of a State receiving the minimum statutory allocation and as necessary to comply with the objectives of the Act.
§ 317.65 Similar applications.
Any application for a project which serves similar needs, in the same general area, as an existing project or application under the Local Public Works program or any other program administered by the Economic Development Administration ■ may be denied by the Assistant Secretary for that reason.
Subpart G — General Requirements
§ 317.70 Environmental considerations.
(a) The National Environmental Policy Act. (1) The Local Public Works Act requires applications to be processed within 60 days of their acceptance. EDA will not be able to prepare environmental impact statements for those projects which may significantly affect the quality of the human environment. However, to the fullest extent possible within this time period, EDA will analyze a project’s potential environmental impacts and give appropriate consideration to environmental impacts In making its final decisions.
(2) In order that EDA may conduct its environmental analysis of proposed projects, applicants shall include the following materials with their application:
(i) A description of those elements of the proposed project which will have an impact on the environment, the nature of the environment which will be affected, and data on the expected environmental impact;
(ii) Alternatives to the proposed project;
(iii) Any environmental analysis previously conducted by local, State, Federal agencies; and
(iv) Evidence of public reaction to the project, such as transcripts of local public hearings held on the proposal.
If the materials required by paragraphs (a) (2) (iii) and (iv) of this section are not available, the applicant must so certify in the application.
(3) EDA will independently review and analyze environmental information submitted by applicants.
(i) Where appropriate, EDA, within the 60 day limit, may seek the views of other government agencies which have jurisdiction by law or special expertise with respect to any environmental impact involved.
(ii) If a project appears to be highly controversial for environmental reasons and there is a need to further understand the basis of the controversy, EDA may, within the 60 day limit, request the views of concerned residents through a newspaper notification or a public information meeting held near the project site.
(4) EDA shall deny an application if, after consideration of the benefits of a project against any environmental costs, it concludes that the environmental costs exceed the benefits. EDA may deny any application solely on the basis that its environmental impact analysis discloses that unacceptable adverse impacts will or are likely to result. EDA, where necessary, may condition approval of a project upon the adoption of specified measures designed to mitigate any adverse environmental impacts.
(b) The National Historic Preservation Act. (1) Applicants shall include with their applications either a statement of their State Historic Preservation Officer’s views of the proposed project or shall e'ertify that their State Historic Preservation Officer was provided with a detailed project description and request for comments prior to the application’s submission to EDA. Such description shall include:
(i) A narrative of the elements of the project and its location;
*995 (ii) A map of the project site and surrounding area indicating the specific location of the project site in relation to adjacent streets and other identifiable objects;
(iii) Line drawings or sketches of the project; and,
(iv) If the building demolition or renovation is involved, photographs of the affected properties.
(2) If necessary, EDA will attempt to complete the coordination of proposed projects with the Advisory Council on Historic Preservation. EDA will use the results of this coordination process, even though completion of this process may not be possible, as a factor in making a final decision on the project.
§ 317.71 Compliance with other Federal requirements.
Each applicant shall, as a condition to its receipt of a grant under this part, comply with the following relevant Federal requirements.
(a) All labor standards including those relating to the payment of wages, working conditions, anti-kickback prohibitions and equal employment as provided 13 CFR 309.6.
(b) Those requirements concerning relocation and related payments to all persons displaced as a result of the development of a public works project with funds received under this part, as provided for in the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, 42 U.S.C. 4601 et seq., and .13 CFR Part 310.
(c) If a project involves the construction of a detention facility, the applicant must certify that the project complies with those sections of Part E of the Omnibus Crime Control and Safe Streets Act of 1968, as amended, found at 42 U.S.C. 3750(b) (1) and (4)-(9).
(d) The provisions of OMB Circular A-95, with the following modification.
(1) Applicants must submit their full applications or notifications of intent to apply to the appropriate clearinghouse as early as possible.
(2) Upon submission of an application to EDA, the application must certify that he has submitted the full application to the appropriate clearinghouse.
(3) EDA may begin processing the application upon its receipt but will make no final approval of an application until 30 days after its receipt unless clearinghouse response is received before 30 days have elapsed.
(4) Applications received by EDA need not have State application identifier numbers.
(5) Clearinghouse comments will be sumitted directly to EDA; EDA will consider such comments until it has finished processing the application.
(e) All environmental requirements, to the maximum extent possible, as determined by the Assistant Secretary, including, but not limited to:
(1) The National Environmental Policy Act of 1969; as amended (42 U.S.C. 4321 et seq.) and EDA’s requirements found in § 317.70;
(2) The Clean Air Act, as amended (42 U.S.C. 1857-1858a);
(3) The Federal Water Pollution Control Act, as amended (33 U.S.C. 1251— 1376);
(4) The National Historic Preservation Act of 1966 (16 U.S.C. 470 et seq.) and EDA’s requirements found in § 317.-70;
(5) The Wild and Scenic Rivers Act (16 U.S.C. 1271-1287);
(6) The Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.);
(7) The Historical and Archeological Data Preservation Act, as amended (16 U.S.C. 469 et seq.); and
(8) The Safe Drinking Water Act (42 U.S.C. 300f-j9).
(f) 13 CFR 309.9, entitled “Records and audit.”
(g) 13 CFR 309.27, entitled “Land use near Federal airfields.”
(h) 13 CFR 309.26, entitled “Project modification.”
(i) 13 CFR Part 314, entitled “Property management standards” except 13 CFR 314.6(a), 13 CFR 314.6(b), and 13 CFR 314.50.
(j) The National Flood Insurance Program and EDA’s requirements regarding flood hazards found at 13 CFR 309.15.
(k) Other laws affecting this program.
§ 317.72 Transfer of grant awards to drought-related projects.
(a) Subject to the Assistant Secretary’s approval, applicants who have been awarded a grant, or who have so prioritized a project as to be tantamount to a grant award by EDA, may request EDA to transfer the funds from the project listed on their application to one or more other projects intended to alleviate drought or other emergency or disaster related conditions or damage.
(b) The Assistant Secretary may approve such a transfer after making the following determinations;
(l) The Federal cost in the aggregate of such project or projects will not be increased beyond the cost of the original award;
(2) Construction on the project or projects proposed for substitution can begin within ninety days; and
*996 (3) The project or projects proposed for substitution will in fact aid in alleviating drought or other emergency or disaster related conditions or damage.
(c) Section 106(a) of the Local Public Works Act and § 317.15(a) will not apply to projects substituted under the authority of this section.
§ 317.73 Lease of project facilities.
Normally, public works projects constructed with funds under this part must retain their public character. The project facility may be leased under the following conditions.
(a) The project facility may be leased by the grantee to a non-profit operator providing the applicant maintains a continuing significant economic interest in the project and is not acting simply in a passive role for a prospective lessee, and such facility is used for the purpose of the grant.
(b) The project facility may be leased by the grantee to a profit making operator provided all of the following conditions are met:
(1) The lease is incidental to the project and not its principal purpose;
(2) The lease does not change the public nature or character or the purpose of the project as a whole; and
(3) The applicant maintains a continuing significant economic interest in the project and is not acting simply in a passive role as applicant for a prospective lessee.
§ 317.74 Final determination.
(a) All applications for assistance under this part shall be processed by the appropriate EDA Regional Office.
(b) The Regional Director shall notify the applicant, in writing, when its application has been rejected and state the reasons therefor.
(c) The Regional Director shall forward to the Assistant Secretary in Washington, D.C., all applications which he deems are properly completed and eligible for assistance under'this part.
(d) The Assistant Secretary shall review all applications received from the Regional Directors and make the final determination.
(e) If no determination has been made by the end of the sixtieth day after the application was received, the application will be deemed to be approved.
§ 317.75 Suspension and termination.
(a) Suspension or termination for cause. EDÁ may initiate a suspension or termination of a project approved under this part for failure by the grantee to adhere to the requirements of the grant. EDA shall promptly notify the grantee in writing of the suspension or termination, specifying the reasons for the action and its effective date. Payments made to the grantee or recoveries by EDA under grants suspended or terminated for cause shall be in accord with the legal rights and liabilities of the parties.
(b) Suspension or termination for convenience. EDA or the grantee may initiate a suspension or termination of a project approved under this part when both parties agree that the continuation of the project would not produce beneficial results commensurate with the further expenditure of funds. The two parties shall agree upon the conditions of the action, including the effective date, and in the case of partial suspension or termination, the portion to be suspended or terminated. The grantee shall not incur new obligations for the suspended or terminated portion, after the effective date, and shall cancel as many outstanding obligations as possible. EDA shall allow full credit to the grantee for the Federal share of the non-cancellable obligations which were properly incurred by the grantee prior to suspension or termination.
Subpart H — Eligibility of Non-Profit Entities
§ 317.80 Grants for non-profit entities.
After September 30, 1977, grants may be made from appropriations under the Local Public Works Act to States or local governments for projects for the construction, renovation, repair, or other improvements of health care or rehabilitation facilities owned and operated by private non-profit entities.
(a) In the even that EDA has obligated all funds appropriated under this Act prior to or on September 30, 1977, this section will not take effect.
(Section 701, Pub.L. 89-136, 79 Stat. 570 (42 U.S.C. 3211); Pub.L. 94-369, 90 Stat. 999 (42 U.S.C. 6701); Pub.L. 95-28, 91 Stat. 116; Department of Commerce Organization Order 10-4 (September 30, 1975), as amended ( 40 FR 56702 as amended at 40 FR 58878 and 41 FR 35548 ).)
Dated: May 24, 1977. .
Robert T. Hall, Assistant Secretary for Economic Development.
[FR Doc. 77-15266 Filed 5-26-77;8:45 am]
*997 APPENDIX C
CONGRESSIONAL RECORD — HOUSE February 24, 1977
AMENDMENT OFFERED BY MR. MITCHELL OF MARYLAND
Mr. MITCHELL of Maryland. Madam Chairman, I offer an amendment.
The Clerk read as follows:
Amendment offered by Mr. Mitchell of Maryland: Page 2, line 23, insert “(1)” immediately before “Notwithstanding.”
Page 3, line 7, strike out the quotation marks and the period immediately following the quotation marks.
Page 3, immediately after line 7, add the following:
“(2) Notwithstanding any other provision of law, no grant shall be made under this Act for any local public works project unless at least 10 per centum of the dollar volume of each contract shall be set aside for minority business enterprise and, or, unless at least 10 per centum of the articles, materials, and supplies which will be used in such project are procured from minority business enterprises. For purposes of this paragraph, the term ‘minority business enterprise’ means a business at least 50 percent of which is owned by minority group members or, in case of publicly owned businesses, at least 51 percent of the stock of which is owned by minority group members. For the purposes of the preceding sentence, minority group members are citizens of the United States who are Negroes, Spanish-speaking, Orientals, Indians, Eskimos, and Aleuts.”
Mr. MITCHELL OF Maryland (during the reading). Madam Chairman, I ask unanimous consent that the amendment be considered as read and printed in the Record.
The CHAIRMAN. Is there objection to the request of the gentleman from Maryland?
There was no objection.
Mr. MITCHELL of Maryland. Madam Chairman, the minority and the majority side have been provided with a revised copy of the amendment. I ask unanimous consent to merely insert the words “10 per centum of the dollar volume of each contract shall be set aside for minority business enterprise.”
Madam Chairman, I am merely asking unanimous consent to modify the amendment at this point to include that phrase. That is in the revised amendment that is before the Chair.
The CHAIRMAN. The Chair will advise the gentleman from Maryland (Mr. Mitchell) that if that language is in the revised language at the desk, his unanimous consent request is not necessary.
Mr. MITCHELL of Maryland. Madam Chairman, it is in the revised language at the desk, and it is in the copies provided the minority side and the majority side.
The CHAIRMAN. Then the request of the gentleman would not be necessary.
Mr. HARSHA. Madam Chairman, if the gentleman will yield, would the gentleman care to tell us where this language that he would like to insert would appear.
Mr. MITCHELL of Maryland. The language referred to appears at page 3, immediately after line 7, in the revised amendment that the gentleman has before him.
It is in the revised amendment that the gentleman has before him, it says:
Notwithstanding any other provision of law, no grant shall be made under this Act any local public works project unless at least 10 per centum of the dollar volume of each contract shall be set aside for minority business enterprise.
That is the only insertion.
Mr. HARSHA. Madam Chairman, I thank the gentleman.
Mr. MITCHELL of Maryland. Madam Chairman and my colleagues, all this amendment attempts to do is to provide that those who are in minority businesses get a fair share of the action from this public works legislation.
I want to commend the chairman and the members of the committee who have done a great deal to make this public works bill far more equitable than it was last year. They have targeted and have amended the legislation to cover areas of high unemployment and they have improved the legislation so that it is a much better bill. But there is one shortcoming that I see in the bill that I am attempting to address through my amendment. That shortcoming is that there will be numerous contracts awarded at the local level for various public works projects, but in that there is no targeting — and I repeat— there is no targeting for minority enterprises.
Let me tell the Members how ridiculous it is not to target for minority enterprises. We spend a great deal of Federal money under the SBA program creating, strengthening and supporting minority businesses and yet when it comes down to giving those minority businesses a piece of the action, the Federal Government is absolutely remiss. All it does is say that, “We will create you on the one hand and, on the other hand, we will deny you.” That denial is made absolutely clear when one looks at the amount of contracts let in any given fiscal year and then one looks at the percentage of minority contracts. The average percentage of minority contracts, of all Government contracts, in any given fiscal year, is 1 percent — 1 percent. That is all we give them. On the other hand we approve a budget for OMBE, we approve a budget for the SBA and we approve other budgets, to run those minority enterprises, to make them become viable entities in our system but then on the *998 other hand we say no, they are cut off from contracts.
In the present legislation before us it seems to me that we have an excellent opportunity to begin to remedy this situation.
I know what the points in opposition will be. The first point in opposition will be that you cannot have a set-aside. Well, Madam Chairman, we have been doing this for the last 10 years in Government. The 8-A set-aside under SBA has been tested in the courts more than 30 times and has been found to be legitimate and bona fide. We are doing it in this bill. We are targeting for various groups of people. We are targeting for the Indians, that is a set-aside. All that I am asking is that we set aside also for minority contractors.
I would point out also that this concept of a set-aside is becoming increasingly popular. Many States and many local subdivisions have moved into the process of setting aside contracts for minorities. That is because that is the only way we are going to get the minority enterprises into our system.
Let me continue, and, very seriously— and perhaps it is unfortunate, maybe, that I am not balancing all of these matters in proper perspective — because I think this is so important. We cannot continue to hand out survival support programs for the poor in this country. We cannot continue that forever. The only way we can put an end to that kind of a program is through building a viable minority business system. So I am deadly serious about it.
The other objection that will be raised is the objection that everybody else is going to go on a competitive bid basis; why should not the minority enterprise people go on a competitive bid basis? The answer is very simple: we cannot. We are so new on the scene, we are so relatively small that every time we go out for a competitive bid, the larger, older, more established companies are always going to be successful in underbidding us. That is an absolute truism.
The third objection that will be heard — and I can anticipate all of them — will be that this will cause a delay in getting certain projects off the ground. Indeed, it will not. It will not cause any delay because I do not know of any single State of the 50 States that under its EDA program has not already developed a roster of capable minority enterprises ready to do the job. All we have to do is go down that list of companies capable of doing the job.
I think I have raised the objections, and I think I have answered them. This is the only sensible way for us to begin to develop a viable economic system for minorities in this country, with the ultimate result being that we are going to eventually be able to pull down deficits in spending; we are going to be able to end certain programs which are merely support survival programs for people' which do not contribute to the economy. I support those programs because at present we have nothing else to offer. On the other hand, I would urge adoption of my amendment because to the extent we are willing to let minorities do business with the government, we will be able to reduce survival support programs now paid for by the Federal Government. I urge the Members’ support.
Mr. KAZEN. Madam Chairman, will the gentleman yield?
Mr. MITCHELL of Marylánd. I yield to the gentleman from Texas.
Mr. KAZEN. I thank the gentleman for yielding.
I can agree with practically everything the gentleman has said, but, as I understand his amendment, it is mandatory that 10 percent be set aside; am I correct?
Mr. MITCHELL of Maryland. That is correct.
Mr. KAZEN. All right. What happens in the rural areas where there are no minority enterprises? Will the 10 percent be held up in order to bring minority enterprises from somewhere else where there is no unemployment into a place where there is unemployment and there is no minority enterprise?
Mr. MITCHELL of Maryland. In response to the gentleman’s question, the answer is “No.”
The CHAIRMAN. The time of the gentleman has expired.
(By unanimous consent, Mr. Mitchell of Maryland was allowed to proceed for 2 additional minutes.)
Mr. MITCHELL of Maryland. Let me tell the gentleman why that would not occur. When Presidents Nixon and Ford put out their Executive orders to all the agencies to utilize minority contractors, the agencies then established certain guidelines which said, all right, we will utilize these minority contractors wherever possible, but where there are none, there can be no utilization, and therefore no project should be delayed.
For example, I would not expect to take my minority contractors from Maryland into Idaho to meet that State’s requirement. That will not be an issue.
Mr. KAZEN. If the gentleman would yield further, this is what I wanted the gentleman to clarify, that where there are no minority enterprise contractors than this provision would not be in effect; am I correct?
*999 Mr. MITCHELL of Maryland. That is absolutely correct, and that is done by administrative action already on the books with all of the agencies.
Mr. KAZEN. Does the gentleman’s amendment leave room for that type of discretion in the Secretary?'
Mr. MITCHELL of Maryland. I assume that it does. It would be my intent that it would because that is existing administrative law.
Mr. KAZEN. I thank the gentleman.
Mr. ROE. Madam Chairman, I move to strike the last word.
(Mr. ROE asked and was given permission to revise and extend his remarks.)
Mr. ROE. Madam Chairman, I sympathize completely with the gentleman from Maryland and have reviewed his proposed amendment. L might want to suggest a point for consideration by the Committee. What the gentleman is attempting to do is see that there is an equitable relationship for minority contractors and suppliers to be able to participate, which I think is right and is proper.
On the other hand the way the amendment is drafted, it would indicate that the 10 percent would be set aside. I do not know where that 10 percent would be set aside. This is a very important amendment, if we would just like to think it out. I want to vote for this issue bui I am pointing out some technical problems in the draftsmanship of it. To me the way this appears to be written is that if we are talking about a 10-percent set-aside, where are we talking about the set-aside?
I would appreciate it if the gentleman would join me in a colloquy. The way this bill functions now is that funds are allocated among the States depending on their respective unemployment. Under that particular posture the EDA reviews the applications coming in from the subdivisions within that State, whatever they happen to be, and they make tire grant approval to the city or the community or the county before the project goes out for bid.
Mr. MITCHELL of Maryland. And that is where the set-aside occurs. Under the procedures that are now existing in many political subdivisions using Federa) funds, at the time of that approval, at the time of the submission of the request from the local political subdivision by way of illustration EDA simply says.
O.K. It looks awfully good to us. We would recommend that you set aside 10 percent for minority contractors.
Indeed, this occurs, if my distinguished chairman will listen, many times.
Mr. ROE. Oh, he is listening.
Mr. MITCHELL of Maryland. This occurs even before any submissions are made, very often, by agencies. The agency • will say:
O.K. We are about to embark, on this piogram in your distript. We would ask you u adhere to a set-aside.
And that becomes a part of the original guidelines, and then the State or city or the county takes the responsibility of actually carrying out the set-aside operation, not EDÁ.
Mr. ROE. May I build on that. That sounds good in theory, but let me tell the gentleman how it works. There are many States that have prohibitions in their constitutions or they require, for example, that a particular community, say X community, was awarded a grant for some project by EDA, and they then have to take that grant and go out to public bidding. The contractors, the prime contractors have to bid on that public bid. I do not know how we can say. and I am just asking how the gentleman’s thought processes" go, if we have say 5 contractors that want to bid and the minority contractor has a bid which is higher than any — is the gentleman suggesting that the contract then would have to be awarded to the highest bidder because he is the minority bidder?
Mr. MITCHELL of Maryland. Oh, no.
Mr. ROE. That is what this amendment says,
Mr. MITCHELL of Maryland. It does not say that or operate in that fashion at all.
My State of Maryland has a proviso requiring competitive bidding. In addition to that proviso my State of Maryland, without benefit of law, has suggested to the agencies:
Why do we not do something to try to bring minority businesses into government participation?
It further suggests that of all the contracts that are let, x percent should be set aside to be handled on a noncompetitive basis for minorities. That is an. administrative action. It is not the law of Maryland but it is one way, one means by which we are able to move toward solving the problem in my State.
Mr. ROE. I think the question raised by the other gentleman who brought it out is that we are only looking for an answer, and the question raised is that in many areas of the country we do not have minorities. We do not have a mi *1000 nority problem at that point. We are trying to understand the gentleman’s amendment and how we can apply it uniformly across the country, because the way it is written now it automatically does apply and there would be a 10-percent set-aside at every level of government. This is the way it appears to be written. Then we would come back and' say, whether it is a State or a county or a municipal project, that 10 percent of the contracting and 10 percent of the supplies would have to be secured from a so-called minority contractor at that point.
Mi-. MITCHELL of Maryland. Let-me clarify one issue. It is 10 percent of the contracts and/or supplies. That gives a great deal of leeway to the governments, so that if they do not have minorities capable of providing the supplies, they have got people capable of performing the contracts. That is the first point I want to make.
The second point, and I reiterate what I said earlier, that we already have in existence within the agency structure the SOP administrative law that says this kind of amendment would not apply where there are no minority contractors or where there are no minorities. It is already in the law.
The CHAIRMAN. The time of the gentleman from New- Jersey has expired.
(By unanimous consent, Mr. Roe was allowed to proceed for an additional 3 minutes.)
Mr. ROE. Madam Chairman, that does not hold on the point of law. If there is an administrative director, let me tell the gentleman, that in this bill we have made very careful adjustments to meet what were the minority interests. We did have a group of people from the civil rights group and minority interest groups.
Mr. MITCHELL of Maryland. Madam Chairman, if the gentleman will yield further, I applauded the gentleman for his interest in that direction.
Mr. ROE. I know the gentleman did.
I think we have to allow elbow room in the amendment to make it workable.
I have a suggestion for an amendment which I would like to discuss with the gentleman from Maryland which is something in words to the effect:
Except to the extent that the Secretary determines otherwise, no grant shall be made under this Act for any local public works project unless the applicant gives satisfactory assurance to the Secretary that at least 10 percent of the amount'of each grant shall be expended for minority business enterprises. For purpose of this paragraph, the term ‘minority business enterprise’ means a business at least 50 percent of which is owned by minority group members or,
And then it takes in the rest of the gentleman’s language.
What the gentleman is saying here is that they are mandated to go to 10 percent where the material and supplies are available and the contractors are available; but if we get into an area where they are not available, we have another problem. We have to go to another State to get those people in.
Does the gentleman see what I am getting at? .
Mr. MITCHELL of Maryland. Madam Chairman, if the gentleman will yield further, if my understanding of the gentleman’s amendment is correct, I am inclined to accept it, if that would help clarify the matter of not importing minority contractors and businesses from another State.
Mr. ROE. Madam Chairman, that is exactly what I am saying.
Mr. MITCHELL of Maryland. Madam Chairman, if the gentleman will yield further, that is acceptable with the caveat that there must be a mandate, because, I say to the Members of the House, every agency of the Government has tried to figure out a way to avoid doing this very thing. Believe me, these bureaucracies can come up with 10,000 ways to avoid doing it. That is why I am insisting it be mandated.
Mr. ROE. Well, my amendment can accomplish both goals. We are saying each grant shall be expended for minority enterprises. We are mandating it in this amendment.
Mr. MITCHELL of Maryland. Madam Chairman, if the gentleman will yield further, if my understanding is correct, I willingly accept the gentleman’s amendment.
Mr. ROE. We want to make it clear.
Mr. MITCHELL of Maryland. Madam Chairman, if the gentleman will yield further, I think the local municipalities should have the right to utilize minority-enterprises and his amendment will support that right.
Madam Chairman, I accept the amendment to my amendment.
AMENDMENT OFFERED BY MR. ROE TO THE AMENDMENT OFFERED BY MR. MITCHELL OF MARYLAND
Mr. ROE. Madam Chairman, I offer an amendment to the amendment offered by the gentleman from Maryland (Mr. Mitchell) and ask unanimous consent that it be adopted.
Mr. HARSHA. Madam Chairman, reserving the right to object, I would like to know exactly the language of the gentleman’s amendment.
*1001 The Clerk read as follows r
Amendment offered by Mr. Roe to the amendment offered by Mr. Mitchell or Maryland: In lieu of the Mitchell amendment insert the following:
Page 3, in lieu of the matter proposed to be inserted after line 7, insert the following:
“(2) Except to the extent that the Secretary determines otherwise, no grant shall be made under this Act for any local public works project unless the applicant gives satisfactory assurance to the Secretary that at least 10 per centum of the amount of each grant shall be expended for minority business enterprises. For purposes of this paragraph, the term ‘minority business enterprise’ means a business at least 50 percent of which is owned by minority group members or, in case of a publicly owned business, at least 51 percent of the stock of which is owned by minority group members. For the purposes of the preceding sentence, minority group members are citizens of the United States who are Negroes, Spanish-speaking, Orientals, Indians, Eskimos, and Aleuts.”
Mr. ROE. Madam Chairman, I ask unanimous consent that the wording of the amendment may be corrected so that after the word “amount” insert the word "of” and after “in ease of” insert the word “a” and correct the spelling of the word “Eskimos”.
The CHAIRMAN. Is there objection to the request of the gentleman from New Jersey?
Mr. HARSHA. Madam Chairman, reserving the right to object, may I further inquire, the language I have says:
Except to the extent that the Secretary determines otherwise, no grant shall be made under this Act f
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