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Treas.
HJ
10
.A13P4
v. 214
U. S. Dept. of|Treasury.
Press releases../
LIBRARY
MAR1319Pn
TREASURY DEPAftiM
epartmentoftheTREASURY
tfHINGTON,D.C. 20220
TELEPHONE 566-2041
FOR RELEASE AT 4:00 P.M.
May 22, 1978
TREASURY TO AUCTION $2,250 MILLION OF 4-YEAR 1-MONTH NOTES
The Department of the Treasury will auction $2,250
million of 4-year 1-month notes to raise new cash.
Additional amounts of the notes may be issued to Federal
Reserve Banks as agents of foreign and international
monetary authorities at the average price of accepted
competitive tenders.
Details about the new security are given in the
attached highlights of the offering and in the official
offering circular.
oOo
Attachment
B-933
HIGHLIGHTS OF TREASURY
OFFERING TO 'RHE PUBLIC
OF 4-YEAR 1-MONTH NOTES
TO BE ISSUED JUNE 7, 1978
May 22, 1978
Amount Offered:
To the public
Description of Security:
Term and type of security
Series and CUSIP designation
$2,250 million
4-year 1-month notes
Series H-1982
(CUSIP No. 912827 HU 9)
Maturity date
June 30, 1982
Call date
No provision
Interest coupon rate
To be determined based on
the average of accepted bids
Investment yield To be determined at auction
Premium or discount
To be determined after auction
Interest payment dates
December 31 and June 30 (first
payment on December 31, 1978)
Minimum denomination available
$1,000
Terms of Sale:
Method of sale
Yield Auction
Accrued interest payable by
investor
None
Preferred allotment
Noncompetitive bid for
$1,000,000 or less
Deposit requirement 5% of face amount
Deposit guarantee by designated
institutions
Acceptable
Key Dates:
Deadline for receipt of tenders
Wednesday, May 31, 1978,
by 1:30 p.m., EDST
Settlement date (final payment due)
a) cash or Federal funds
Wednesday, June 7, 1978
b) check drawn on bank
within FRB district where
submitted
Monday, June 5, 1978
c) check drawn on bank outside
FRB district where
Friday, June
1978
Delivery submitted
date for coupon securities. Tuesday,
June 2,
13,
1978
Department theTREASURY
WASHINGTON, O.C. 20220
TELEPHONE 566-2041
May 22, 1978
FOR IMMEDIATE RELEASE
RESULTS OF TREASURY'S WEEKLY BILL AUCTIONS
Tenders for $2,200 million of 13-week Treasury bills and for $3,400 million
of 26-week Treasury bills, both series to be issued on May 25, 1978,
were accepted at the Federal Reserve Banks and Treasury today. The details are
as follows:
RANGE OF ACCEPTED
COMPETITIVE BIDS:
13-week bills
maturing August 24, 1978
Price
High
Low
Average
Discount
Rate
98.377 a/ 6.421%
98.357
6.500%
98.363
6.476%
Investment
Rate 1/
6.62%
6.70%
6.68%
26-week bills
maturing November 24, 1978
:
Price
Discount
Rate
: 96.395
: 96.365
: 96.370
Investment
Rate 1/
7.092%
7.151%
7.141%
7.46%
7.52%
7.51%
a./ Excepting 1 tender of $600,000
Tenders at the low price for the 13-week bills were allotted 18%
Tenders at the low price for the 26-week bills were allotted 41%
TOTAL TENDERS RECEIVED AND ACCEPTED
BY FEDERAL RESERVE DISTRICTS AND TREASURY:
Location
Received
Accepted
Received
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
$
23,275,000
3,585,530,000
23,690,000
45,680,000
31,140,000
26,410,000
314,880,000
40,705,000
20,450,000
23,045,000
18,745,000
214,790,000
$
23,275,000
1,831,730,000
23,690,000
40,680,000
21,140,000
26,410,000
69,380,000
16,065,000
20,450,000
23,045,000
18,745,000
77,490,000
$
44,265,000
4,766,790,000
10,670,000
87,710,000
54,515,000
19,790,000
460,670,000
41,070,000
19,385,000
21,005,000
6,620,000
359,325,000
$
16,315,000
2,828,190,000
10,670,000
84,760,000
33,515,000
19,790,000
97,720,000
14,070,000
16,385,000
21,005,000
5,620,000
244,985,000
7,950,000
7,950,000
7,210,000
7,210,000
Treasury
TOTALS
$4,376,290,000
$2,200,050,000b/: $5,899,025,000
V Includes $339,965,000 noncompetitive tenders from the public.
J Includes $196,965,000 noncompetitive tenders from the public.
1/Equivalent coupon-issue yield.
B-934
Accepted
$3,400,235,C-CC-c/
Department of theTREASURY
WASHINGTON, D.C. 20220
TELEPHONE 566-2041
FOR RELEASE UPON DELIVERY
Expected at 2:00 p.m.
May 24, 1978
STATEMENT OF EMIL M. SUNLEY,
DEPUTY ASSISTANT SECRETARY OF THE TREASURY FOR TAX POLICY
BEFORE THE SUBCOMMITTEE ON OVERSIGHT OF
THE HOUSE WAYS AND MEANS COMMITTEE
ON EXTENSION OF THE HIGHWAY TRUST FUND
Mr. Chairman and Members of this Distinguished Committee:
When development of an interstate highway system was
being considered in the mid-19501s, the Congress decided to
establish a separate funding system for this and other
Federal highway aid programs. A trust fund, the Highway
Trust Fund, was established with financing from most of the
taxes on motoring products — the rates being raised in some
cases -- plus two new taxes, that on manufacturers1 sales of
tread rubber and an annual use tax on heavy trucks and
buses. In accordance with the determination that motorists
should pay for Federal highway aid, the Fund contained, and
continues to contain, a provision designed to prevent
spending of more than the balance in the Fund.
Under one clause in the law, the Fund may borrow from
the general fund of the Treasury but must repay the advances
(with interest). But the provision that actually prevents
spending more in a fiscal year than is available during the
year is one requiring a reduction in apportionments for the
interstate system whenever the Secretary of the Treasury
(after consultation with the Secretary of Transportation)
decides that amounts that will be available in the Fund,
after all other required highway aid expenditures have been
made, will be insufficient to pay amounts expected to come
due if the full amounts authorized to be appropriated for
the interstate system for any fiscal year are apportioned.
Under such circumstances, the Secretary of Transportation is
then required to reduce the apportionments to the States
with respect to the interstate system so as to forestall the
estimated deficiency. The reduction in the apportionments
is to be made among the States on a pro rata basis. Subsequently,
B-935
whenever the Secretary of the Treasury estimates that
- 2 Highway Trust Fund balances will become available to pay for
apportionments for the interstate highway system which were
previously withheld, the amounts previously withheld are to
be apportioned by the Secretary of Transportation. The
withholding of apportionments only from the interstate
system served to protect the Federal aid programs for other
roads, such programs having been in effect for many years
before the interstate program was added.
Federal aid for highways is one area where a user
charge system definitely is a responsible method of financing,
as the motoring public, including truckers, is the direct
beneficiary of the highway aid. But if expenditures are to
be met from user charges, a requirement has to be in force
which will make certain that expenditures are kept in line
with tax funds available for any given year. If expenditures
during a year can anticipate future receipts, it is very
likely that the practical result will be that the "deficit"
will never be made up. The need for maintaining current
levels of spending will be advanced as a reason for "delaying"
repayment of the debt.
H.R. 11733 as reported by the House Public Works
Committee authorizes appropriations for Federal highway aid
for the fiscal years 1979-1982 which would be considerably
in excess of the revenues expected of the Trust Fund during
that period.
To pay for the 4-year level of authorization in the
Public Works Committee bill would require extension of the
user taxes and Trust Fund more than 4 years beyond the
present September 30, 1979 expiration date. But extension
of the taxes beyond the period of authorization of expenditures should not be considered as a way of paying for the
authorizations now proposed by H.R. 11733. To do so would
destroy the orderly sequence of highway financing. This
is why we have strongly recommended that the highway spending
program be limited to current receipts from the user taxes
within the 4-year time frame recommended for extension of
the Highway Trust Fund and highway user taxes. An alternative,
of course, that would accommodate the Public Works Committee's
level of authorizations within a 4-year time frame would be
to increase the gasoline tax by 2 cents a gallon (over $2
billion a year) for 4 years. We do not recommend an increase
as part of a highway program.
- 3 The current law requirement for adjustments to apportionments when estimated future receipts of the Fund will be
inadequate to pay for expenditures resulting from authorized
apportionments now requires all reductions to be made in
apportionments for the interstate system. An amendment to
this provision as proposed by Congressmen Conable and
Gibbons would make the required reductions the same percentage for all Federal-aid highway and highway safety
construction programs. This amendment also would specify
that the procedure for determination of the need for a
reduction in apportionments be carried out under a more
definite time table, and that any percentage cutback be
published in the Federal Register a stated time before the
beginning of the next fiscal year.
Present law is rather vague as to when the Secretary of
the Treasury has to notify the Secretary of Transportation
of the need for reduction in interstate systems apportionments.
A more structured procedure than currently exists for determini
and announcing reductions in apportionments would be helpful
in altering all concerned with highway aid programs as to
changes in apportionments from the level of authorizations.
Requiring all programs to be reduced proportionately whenever
a cutback is required would prevent the whole of any cutback
from falling on the interstate system and thus limit the
effect of a cutback on the completion of the interstate
system which already is greatly behind schedule. Under
present law, an authorization program which is greatly in
excess of anticipated revenues for the Trust Fund, as is the
case with H.R. 11733, would require suspending a large
proportion of interstate system apportionments during part
of the 4-year period covered by the bill. For these
reasons, we believe the Conable-Gibbons amendment would
provide a better mechanism 0O0
for managing highway funding.
FOR IMMEDIATE RELEASE
May 23, 1978
RESULTS OF AUCTION OF 2-YEAR NOTES
The Department of the Treasury has accepted $2,400 million of
$5,764 million of tenders received from the public for the 2-year
notes, Series P-1980, auctioned today.
The range of accepted competitive bids was as follows:
Lowest yield 8.00% 1/
Highest yield
Average yield
8.10%
8.09%
The interest rate on the notes will be 8%. At the 8% rate,
the above yields result in the following prices:
Low-yield price 100.000
High-yield price
Average-yield price
99.819
99.837
The $2,400 million of accepted tenders includes $988 million of
noncompetitive tenders and $1,352 million of competitive tenders from
private investors, including 35% of the amount of notes bid for at
the high yield. It also includes $ 60 million of tenders at the
average price from Federal Reserve Banks as agents for foreign and
international monetary authorities in exchange for maturing securities.
In addition to the $2,400 million of tenders accepted in the
auction process, $ 177 million of tenders were accepted at the average
price from Government accounts and Federal Reserve Banks for their own
account in exchange for securities maturing May 31, 1978, and $470
million of tenders were accepted at the average price from Federal
Reserve Banks as agents for foreign and internationl monetary authorities
for new cash.
1/ Excepting 8 tenders totaling $105,000
B-936
FOR RELEASE UPON DELIVERY
Expected at 11:00 am, E.D.T.
May 24, 1978
REMARKS OF THE HONORABLE W. MICHAEL BLUMENTHAL
SECRETARY OF THE TREASURY
BEFORE THE INTERNATIONAL MONETARY CONFERENCE
MEXICO CITY, MEXICO
MAY 24, 1978
This annual conference provides a unique forum for an
exchange of views on key issues facing the world financial and
banking community. It is of great value to me to participate,
and a distinct privilege to address this assembly. We in
government and you in the banking industry share a common
interest in a smoothly working international monetary system, and
a strong and active world economy. The actions of governments
help shape the environment within which banks operate; your
industry in turn helps determine the economic framework for
public policy. A clear understanding of each others' views is
not only beneficial but essential. Your conferences contribute
greatly towards achieving that understanding.
The New System
This year's meeting comes at a time when we are entering a
new phase of international monetary history. Just last month,
with the ratification of the new IMF Articles, we inaugurated the
new international monetary system vLich had been agreed at
Jamaica. Our collective task in the coming year will be to
implement that new system, to get it operating effectively. And,
within the framework of the new system, to achieve a better
balance in the pattern of international payments.
For the United States, the aim of adjustment and a better
payments pattern has special meaning. We know we have a
resoonsibility to reduce our current account deficit, and to
assure a strong and healthy dollar. We are determined to fulfill
that responsibility, by improving the fundamental strength of our
economy, and by following sound underlying economic and financial
policies. There is now an increased awareness of our
determination to take all necessary action needed for a sound
dollar: to curb inflation, cut back our dependence on imported
oil, and improve our export performance, along the lines
announced by President Carter on April 11. With this increased
worldwide awareness, the uncertainty and disorder that
B-937
-2periodically characterized the exchange markets in the six months
October throuqh March has qradually given way in recent weeks to
an improved tone. We are working hard to maintain it that way.
Our intention was never otherwise.
I mention this by way of introduction to some thoughts I
would like to share with you on the monetary system we live under
and must work with. The efforts of the Carter Administration to
set these fundamental economic variables in order are the
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by some external means, and toward the concept of placing
directly on nations the responsibility for developing exchang
stability by following sound underlying economic and financial
policies. It is a move in the right direction. It is an effort
we must all support.
Historical Precis
Under the gold standard, with exchange rates rigidly tied
to gold, domestic economic policies were clearly and sometimes
brutally subordinated to international imperatives. Exchange
stability was imposed on countries from the outside, and
sometimes at great cost. While adjustment occurred, it was at
times accomplished harshly and inflexibly, with the result that
the system broke down, and led in the 1930's to a period of
restrictions and predatory exchange rate policies.
The Bretton Woods par value system was designed to correct,
on the one hand, the excesses of the gold standard, and on the
other, the aggressive exchange rate behavior of the interwar
years: it retained the general framework of a gold standard, but
provided for greater flexibility and greater freedom of national
policy formulation by permitting par value changes in event of
"fundamental disequilibrium." It was for a time a highly
successful system.
But fundamental changes in global patterns
of economic growth, coupled with dramatic growth in the size and
fluidity of the international capital markets, brought it under
strain in the 1960's and early 1970's and led to the need for
reform.
The new system now embodied in the IMF Articles retains the
basic Bretton Woods philosophy of cooperation and liberal trade
and payments. But it moves away from trying to force stability
on nations through an external mechanism — as the gold standard
to an extreme degree and the Bretton Woods system to a lesser
degree had tried to do but failed. Instead it aims at developing
stability through the application of sound underlying economic
and financial policies in individual countries. It is a more
realistic, more pragmatic approach. It focuses attention less on
-3the symptoms of instability in the world economy — conditions in
the exchange markets — and more on the root causes: the pursuit
of divergent and in some cases inappropriate national policies by
individual countries.
The main obligations placed on nations under the new IMF
Articles are two fold. First, each nation must endeavor to
direct its policies toward orderly growth with reasonable price
stability. Second, each nation must avoid manipulating its
exchange rate to avoid adjustment or gain unfair competitive
advantage.
t
These are tough demands. The monetary system would function
well if all nations followed sensible policies directed toward
non-inflationary growth, and if they did not try to maintain
exchange rates at artificial levels. But we must frankly
acknowledge that neither our new monetary system, nor any likely
alternative system, can force sovereign nations against their
will to adopt particular domestic economic and financial
policies. In the last analysis, German and Japanese growth
policy is made by German and Japanese authorities. Swiss and
British monetary policy is made by the Swiss and British
authorities. And American economic and financial policy is made
by American authorities — the President and the Congress.
Despite these individual differences, all of the major
countries have a responsibility to work toward the internal
discipline that is essential to meaningful stability in the
international monetary system. This is one reason why the heads
of state have taken to periodic Summit meetings — to foster the
kind of gap bridging of domestic macro-economic policies that is
necessary for a smoothly functioning exchange market for goods
and money. We must expect that solutions will not be quick or
dramatic, and that they will yield only to patience and
determination.
Yet what we have in the new IMF Articles is a mechanism
which can help us reconcile these differences, an improved
framework for cooperation in adjustment and management of the
monetary system, a foundation on which we can build if there is
the international will to cooperate. It will take a lot of work,
and we should not except too much too quickly. But it clearly is
in the common interest of all nations to endeavor to ensure its
success.
Making the System Work Through Surveillance
In order to give operational content to the new system, the
IMF will have to develop and sharpen its processes of
surveillance over nations' policies — both its broad examination
of members' general economic and financial policies, and its more
direct examination of their exchange rate policies. We look to
-4surveillance by the Fund as the cornerstone of a smoothly working
monetary system. Surveillance will give the system its backbone
and structure, provide the means of assessing responsible
international behavior, and permit the influence of the
international community to be brought to bear on nations which
fail to comply with their obligations.
The United States is fully committed to making this process
work. To this end, we have made specific proposals to meet three
requirements: first, the IMF must have full information about
policies and developments in member countries; second, the IMF as
an institution must be so organized as to handle its surveillance
duties effectively, and with the involvement of the senior
political officials responsible in their own governments; third,
the IMF must have the techniques by which it can bring to bear
the full moral force of the world community's views on the
compliance or non-compliance of individual countries with their
international obligations.
A system based on effective surveillance seems to me to
have distinct advantages over previous systems. It relies in a
real sense on analysis and judgment — rather than on mechanical
rules and operating procedures. It is more flexible: it can be
adapted to take account of the different circumstances of
different countries, and also of changing conditions in the
international economy over time. It permits more evenhanded
treatment of nations, in that surveillance applies equally to
those in surplus and those in deficit, and an imbalance in one
direction is no less a matter of international concern than an
imbalance in the other direction. The surveillance system thus
broadens the authority and strengthens the hand of the IMF, whose
ability to influence members' policies was in the past largely
limited to the relatively few members borrowing in the Fund's
credit tranches.
Should We Stick To It?
In anticipating the move to flexible exchange rates, some
observers expected that greater flexibility would remove the
discipline from the system — that nations could ignore
developments in their exchange markets, and pursue internal
monetary and fiscal policies without regard to their external
effects. While it is widely recognized that flexible rates have
helped the world economy to deal with some major shocks in recent
years, one notes today increased ambivalence in some circles
about the new system, perhaps because of growing realization that
such expectations were not realistic. The exchange market
implications of persistent large payments imbalances are often
discomforting: export industries and workers are not happy about
exchange rate appreciation; consumers do not like to see the
prices of their imports rise because of depreciation; private and
official entities holding large amounts of foreign currencies
-5react strongly to exchange rate changes. These and other factors
can and do bring powerful forces to bear on the process of
national economic decision making, in a manner which is often
discomforting to politicians.
But the failure of the flexible exchange rate system to meet
up to false expectations and the fact that in practice, the new
regime does not obviate the need for national economic
discipline, is scarcely cause for abandoning it as some have
suggested. No system can provide freedom from discipline. Our
present efforts must be aimed at trying to make the new system
work rather than to replace it with something new.
The United States government accepts the role of exchange
rate movements as a barometer of whether a nation is following
such policies on growth, inflation, and balance-of-payments
adjustment. To be sure, we stand ready to intervene in the
market to counter speculation and disorder in the market. But we
do not believe efforts by countries to maintain exchange rates
out of kilter with underlying economic and financial performance
would be practical or desirable.
Moreover, there is a need to avoid the uncertainties that
would arise from expectations that further major changes in the
international system are in prospect. The introduction of a new
monetary system is a major event, an inherently disruptive change
which is always difficult for the world to absorb. As the
trustees of the world's monetary system, we can build confidence
only by making such changes at infrequent intervals on an
evolutionary basis.
There are now, and there will continue to be, various
proposals for major adaptations in the present system. As
intellectually interesting as these may be, the United States
feels strongly that we have no responsible choice but to get on
with the more prosaic, nuts and bolts job of making the flexible
exchange rate system work.
The Future
I am not suggesting that we should reject the possibility of
future long-term evolution in the system or in the roles of
different reserve assets. I can envision various possibilities
which might in time develop.
For example, I am confident that the future will bring an
expansion in the role of the SDR. The SDR has important long-run
potential for the system, and the United States, which worked in
the 1960's to help establish that asset, favors the development
of that potential. Consideration is now being given within the
IMF to some moves to increase the financial attractiveness of the
SDR, and to ways of expanding its usability in transactions. The
-6possibility of a further allocation of SDRs is also under study.
The United States has suggested a review of other possibilities
— in particular, that an allocation of SDR might be considered'
in connection with the payment of funds to the IMF as part of any
increase in quotas that might be approved in the future. We have
also suggested that possibilities be studied for increased use of
SDR in regular IMF credit transactions as part of the longer-run
development of the asset. We should be receptive to other ways
of increasing the use, and usefulness, of the SDR.
A second possible evolution which may occur in the future
and is now receiving renewed attention is the development of a
European currency. Monetary union has been a longstanding
objective of the European Community, which has been frustrated in
a sense by the same kinds of problems that confront the system
generally — payments imbalances, difficulties of national policy
coordination and harmonization, and wide differences in actual
economic performance. Whether union is feasible and desirable is
largely a question for the European nations themselves to decide.
If the Community wishes to move toward currency unification and
develop a single European currency with an international role,
the United States would have no objection in principle provides
that such a step would be fully compatible with the broader
financial system. We would be prepared to examine any such
proposals with an open mind and with understanding.
But such changes in the monetary system should be seen as
possibilities for the future. Now we must work to improve the
operation of the adjustment process, and achieve a better balance
in the pattern of world payments. That effort must be conducted
within the monetary system as it presently exists.
The Role of the Dollar
I would like to conclude with a few comments on the role of
the dollar in the system.
In my opinion, the reserve currency role of the dollar is
neither an "exorbitant privilege" for the United States, as some
allege, nor an "exorbitant burden," as other contend. Under the
par value system, it was argued that a privilege existed for
reserve currency countries in that the U.S. was then permitted,
by issuing its currency, to borrow too easily and finance
deficits on too large a scale. But any such privilege is much
reduced or eliminated under present arrangements:
— First, because with flexible exchange rates dollar
accumulations by other countries are less an
automatic result of the operation of the system and
more a matter of discretion;
-7—
Second, because with present large and open capital
markets, onshore and off, many other deficit
countries can at any time be borrowing dollar in
large amounts and putting them on the market — with
the result that borrowing to finance U.S. deficits
is not the major source of the growth in supply of
dollars.
Also, the burden alleged to arise from our reserve currency
role — that the U.S. does not have the same freedom as others to
adjust its exchange rate — is, I suspect, more a function of the
size of our market and competitive strength of our economy than
our reserve currency role.
I feel also that the decline in the dollar's exchange rate
which occurred during the latter part of last year and early
months of this year had little to do with the dollar's reserve
currency role. During the last quarter of 1977 and the first
quarter of this year, the dollar declined by an average 8
percent, trade weighted. But in that six-month period the United
States was itself running a current account deficit at an annual
rate of nearly $30 billion. The factors underlying the U.S.
payments deficit were well known to the market — our failure to
adjust to the high cost of energy; a rate of inflation that was
rising while some other countries were holding inflation rates
stable; growth in our economy while other economies were
stagnating; and for a variety of reasons, a lack of sufficient
growth in our exports. These problems did not arise from the
dollar's role as a reserve currency. They would have caused
balance-of-payments deficits and exchange rate pressures under
any type of international monetary system, whether or not the
dollar were widely held in reserves. In fact, there was not a
lot of shifting of reserves out of dollars during those months.
A change in the role of the dollar is not a cure for our
problems. The solution to the U.S. balance-of-payments deficit
lies in dealing with the factors which caused it — energy,
inflation, weak export performance, inadequate growth abroad. As
the largest economy and provider of the world's vehicle currency,
we understand that the burden falls especially heavily on the
United States to maintain economic discipline, to set these
fundamentals right. But we do not look to a revision of the
international monetary system, or to a change in the dollar's
role in that system, or to other devices such as the introduction
of a substitution account to replace dollars with SDRs, as a
solution to the difficulties the dollar has faced.
Conclusion
In the end, the central issue of the internatioanl monetary
system is — and will continue to be — the operation of the
adjustment process, the questions of what forces are brought to
-8bear on what countries to adopt internal or external policies to
bring their respective external positions into sustainable
harmony. Different mechanical arrangements, such as the gold
standard and the Bretton Woods system of par values and gold
convertibility, can have powerful implications for these
questions. We have to recognize clearly that when we discuss
"reform" of the system, we are discussing the means by which
international rules or judgments are applied to the fundamental
national economic policies of individual nations as they affect
the adjustment process.
The new monetary system recognizes the issue explicitly and
squarely in its focus on underlying policy and economic stability
in member nations. This approach provides the potential, if we
are all genuinely willing to make it work, for a more
satisfactory and balanced operation of the system as a whole than
we have yet experienced in this century.
O00O
FOR IMMEDIATE RELEASE
MAY 23, 1978
Contact:
Robert E. Nipp
202/566-5328
TREASURY ANNOUNCES RESULTS
OF GOLD AUCTION
The Department of the Treasury announced that 300,000
ounces of fine gold were sold today to 12 successful bidders
at prices from $180.01 to $182.35 per ounce, yielding an
average price of $180.38 per ounce.
Gross proceeds from this sale were $54.1 million. Of the
proceeds, $12.7 million will be used to retire Gold Certificates
held by Federal Reserve banks. The remaining $41.4 million will
be deposited into the Treasury as a miscellaneous receipt.
These sales were made as the first in a series of monthly
auctions being conducted by the General Services Administration
on behalf of the Department of the Treasury. The next auction,
at which another 300,000 ounces will be offered, will be held
on June 20.
A total of 212 bids were submitted by 44 bidders for a
total amount of 1,364,400 ounces at prices ranging from $12
to $182.35 per ounce.
The list of the successful bidders and the amount of gold
awarded to each is attached. The General Services Administration will release additional detail later.
Attachment
B-938
Ounces
Swiss Bank Corporation
Zurich, Switzerland
Dresdner Bank 97,600
Frankfurt, Federal Republic
of Germany
Union Bank of Switzerland 50,000
Zurich, Switzerland
Sharps Pixley 18,000
New York, New York
NMR Metals Inc. 13,200
New York, New York
Merrill-Montagu 4,800
New York, New York
Swiss Credit Bank 2,000
Zurich, Switzerland
J. Aron Inc. 10,000
New York, New York
Monex International Ltd. 400
Newport Beach, California
Samuel Montagu 3,600
London, U.K.
Johnson Matthey Bankers, Ltd. 3,200
London, U.K.
Morris Cannan 800
San Antonio, Texas
96,400
TMM^nTATTr
iMMtuiAib
Statement by W. Michael Blumenthal
Secretary of the Treasury
May
I left New York yesterday with the feeling that
resolution of city'r, fiscal crisis was near and Senator
Proxmire agreed to defer postponement of the Senate
Banking Committee hearing Wednesday until the last
possible moment.
The negotiating parties have worked diligently to
find common ground. The state and city officials,
the banking community and the union leaders are closer to
agreement than ever before.
But we are now right down to the wire and I am
disappointed that the self-imposed deadline was not met.
It is essential that the remaining issues be resolved
quickly so that the hearing of the Senate Banking Committee
can proceed.
I think both sides understand the necessity of
reaching a settlement that is, first and most important,
fiscally responsible, that is fair to all parties and that
permits the City to effect needed efficiencies through
collaboration with its union leaders and employees.
23,
RESULTS OF TREASURY'S 52-WEEK BILL AUCTION
Tenders for $2,456 million of 52-week Treasury bills to be dated
May 30, 1978,
and to mature May 29, 1979
were accepted at the
Federal Reserve Banks and Treasury today. The details are as follows:
RANGE OF ACCEPTED COMPETITIVE BIDS: (Excepting 1 tender of.$165,000)
Investment Rate
Price
Discount Rate
High - 92.508 7.410% ' 7.96%
_
92.499
Low
Average92.501
(Equivalent Coupon-Issue Yield)
7.419%
7.417%
7.97%
7.97%
Tenders at the low price were allotted 71%.
TOTAL TENDERS RECEIVED AND ACCEPTED •
BY FEDERAL RESERVE DISTRICTS AND TREASURY:
Location
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Received
$
37,625,000
4,296,645,000
32,905,000
69,040,000
90,555,000
11,965,000
807,450,000
39,025,000
28,920,000
17,480,000
5,720,000
305,005,000
Accepted
$
7,625,000
2,084,195,000
2,905,000
8,360,000
66,555,000
8,265,000
226,200,000
11,155,000
5,050,000
6,480,000
3,720,000
22,420,000
Treasury
2,605,000
2,605,000
TOTAL
$5,744,940,000
$2,455,535,000
The $2,456 million of accepted tenders includes $105 million of
noncompetitive tenders from the public and $1,142 million of tenders from
Federal Reserve Banks for themselves and as agents of foreign and
international monetary authorities accepted at the average price.
An additional $ 21 million of the bills will be issued to Federal
Reserve Banks as agents of foreign and international monetary authorities
for new cash.
B-939
partmentoftheTREASURY
SHINGTON.D.C. 20220
TELEPHONE 506-2041
FOR RELEASE ON DELIVERY
May 25, "1978"— 9:00 a.m. EDST
STATEMENT OF THE HONORABLE RICHARD J. DAVIS
ASSISTANT SECRETARY OF THE TREASURY
FOR ENFORCEMENT AND OPERATIONS
BEFORE THE
SUBCOMMITTEE ON CRIMINAL LAWS AND PROCEDURES OF THE
SENATE COMMITTEE ON THE JUDICIARY
Mr. Chairman and Members of the Subcommittee:
I very much appreciate the opportunity to appear
before this Subcommittee today in order to discuss
legislation which would require the tagging of explosive materials. The proposed tagging would serve two
purposes, identification and detection. Identification
taggants would remain intact after a bomb explodes and
enable the type of explosive used to be identified and
traced. Detection taggants would enable the presence
of a bomb to be established before it exploded.
The Treasury Department strongly supports the
adoption of such legislation. It would provide us with
critical tools in the battle against terrorists and
others who use explosives illegally: it would help us
apprehend the bomber, and it would help save lives and
preserve property by preventing explosions from taking
place.
Bombing is a particu lary vicious and indiscriminate crime, and it is a c learly deliberate act of violence. One does not, in a moment of intense anger,
grab his "home protection bomb" from a closet and blowThe bomber actively has to
up his spouse or neighbor
acquire the knowledge of how to make a bomb; he has to
fabricate the explosive d evice; and he has to plant it.
This is a calculated, pla nned and indisputably intentional process. At the s ame time the consequences of
B-940
- 2 the bomber's action are severe: death, injury and the
destruction of property. For these reasons we believe that we should do all that we legitimately can
to meet this problem.
The tagging of all commercial explosives of the
types used in bombings is one such action about which
you have already heard much testimony. Representatives of ATF and the Aerospace Corporation have testified concerning the value of identification tagging,
and a detailed report prepared by Management Science
Associates has been submitted for your consideration.
I will not repeat what these others have already said.
What is clear is that the addition of identification taggants to commercial explosive materials or
their boosters will better enable law enforcement authorities to trace the explosive material from a bomb
scene to its last recorded owner and, hopefully, to its
ultimate user. The chances of solving more bombing
crimes will be improved when identification tagging is
introduced.
From Treasury's perspective, the vital issue as
to identification tagging is whether the crimes solved
and the deterrence established will be worth the effort
and costs of requiring the identification taggants.
We believe that the answer is clearly affirmative.
The American people can only profit from this program.
Bombers can only lose. And, the costs for the manufacturers, dealers and users of explosive materials will
not be excessive.
If identification tagging is desirable, a successful detection tagging program is critical. Bombing is
a crime that is carried out secretly and without warning. A bomb is small and lightweight. It can be
hidden easily. Through a time delay mechanism or a
motion-activated detonator, it can be concealed (or
mailed) and then abandoned by its creator. The bomber
can choose his explosive device, select his target, and
plant his bomb. But once he has left it, every passerby
becomes a random target as it explodes without warning.
- 3 The need, therefore, is to develop the ability
to detect the presence of a bomb before it explodes.
As the Subcommittee has learned from the previous
detailed testimony of Mr. Atley Peterson of the Bureau
of Alcohol, Tobacco and Firearms and Dr. Robert Moler
of Aerospace Corporation, substantial progress in developing a working capability to tag explosives so that
they may be detected before exploding has recently
been made. And it is this part of the tagging program
from which the greatest direct benefits to the public
safety can be expected. With detection taggants added
to explosive materials and with detection devices
placed at high target value locations, we can go beyond
solving bombing crimes only after the destruction has
happened and begin, through pre-detonation discovery,
to prevent bombings from occurring. While the costbenefit of this form of tagging is less certain than
that for identification tagging, this life saving potential is of primary importance.
I would now like to discuss some of the points
that have been raised during these hearings. Initially,
it has been suggested to the Subcommittee by some industry representatives that the Federal government
should buy the tagging materials and distribute them to
the explosives manufacturers. There has also been a
suggestion that the Government should bear the liability for any adverse results of explosives tagging.
It is the Treasury Department's belief that the
Federal government should not interpose itself in the
commercial chain and create an artificial and unnecessary "middleman" between the producers of taggants
and their customers, the manufacturers of explosive
materials. The function of Treasury's Bureau of
Alcohol, Tobacco and Firearms with respect to the explosives industry should be to develop the requirements
and to monitor the execution of the tagging programs.
The BATF function clearly should not be that of an
- 4 unnecessary, bureaucratic intruder in the marketplace.
We believe either role — that of distributor of
taggants or insurer of manufacturers — should be reserved for private enterprise where it will be accomplished as guided by normal market forces and business
management interests. Any involvement of the Federal
government in this "middleman" role is unnecessary and
would create an unfortunate precedent. We sincerely
hope the Subcommittee will not add any requirements of
this sort to S. 2013.
Some have suggested that taggants would be required before it becomes safe or feasible to do so.
That is not our desire. Taggants for each class of
explosives should not be required until the all around
safety, performance quality and environmental impact
of the tagged explosive are established through rigorous research and testing. In addition, a tagging
requirement should only be imposed if the taggant itself has the requisite longevity, survivability, and
uniqueness to accomplish its task.
It is because tagging technology and the readiness and adequacy for implementation varies according
to the type of explosive, that we have recommended in
all Treasury testimony that S. 2013 should include
greater discretionary authority and flexibility for
the Secretary in determining what explosive materials
should be tagged and when. Specific language to provide this flexibility while setting forth the requirements discussed above has been developed by Treasury
and adopted for the explosives tagging provisions of
S. 2236, the antiterrorism bill introduced by the
Senate Governmental Affairs Committee. A copy of this
language is attached to my testimony.
It is our view that this legislation should require the insertion of taggants in all types of commercially available explosive materials which are used
in crimes. The Secretary would then have the authority, applying the standards in our proposed language,
to impose the specific requirement for each class of
- 5 explosives within a reasonable time after the taggant
for that class has been successfully tested and is
available. The Secretary would exempt those classes of
explosives not yet ready for tagging.
Mr. Chairman, the benefits of tagging are clear.
It will not, however, provide a panacea, instantly solving the problem of explosives crime. Identification
tagging will help solve some bombings, not all. Detection tagging does not mean that all bombs will immediately be detected. Together, however, they will meaningfully advance our ability to deal with the bombing
problem, and may deter some from using this deadly instrument. These would be major advances.
One thing is clear, however: the extent to which
tagging will help counter bombing crimes will be largely
influenced by how quickly and how many forms of explosives are tagged. It is critical, therefore, that as
soon as technology allows, the requirement that a particular class of explosives be tagged should go into effect.
One class of explosives is ready to be tagged now; others
will be shortly. We, therefore, urge that this legislation be passed during this session. We can then minimize
the delay in getting tagged explosives into the marketplace and maximize our ability to apprehend those who
use bombs and to save the lives of their intended victims
at the earliest possible time.
The Treasury Department deeply appreciates the detailed attention which the Subcommittee and you,
Mr. Chairman, have given to the problem of bombings
and the tagging of explosives to help fight this severe
crime problem. We believe that nearly all American
citizens share in the desire so often expressed before
and by the Members of this Subcommittee that all explosive materials commonly used in the various forms of
criminal and terrorist bombings should, when operationally feasible, be required to contain both identification and detection taggants.
- 6 We will gladly continue to work with the Subcommittee's staff to achieve a final version of S. 2013
which will accomplish our mutual goal of a workable
scheme for requiring the tagging of explosive materials
for identification and for detection.
That concludes my statement, Mr. Chairman, I will
bo happy to answer any questions the Subcommittee may
have.
0O0
FOR IMMEDIATE RELEASE
May 24, 1978
Contact: Alvin M. Hattal
202/566-8381
TREASURY ANNOUNCES COUNTERVAILING
DUTY INVESTIGATION OF IMPORTS OF
AMPICILLIN TRIHYDRATE FROM SPAIN
The Treasury Department today announced an investigation
to determine whether the Government of Spain is subsidizing
exports of ampicillin trihydrate. The investigation results
from a petition filed on behalf of domestic interests.
Ampicillin trihydrate is a semi-synthetic form of penicillin
used in the treatment of disease.
The Countervailing Duty Law requires that the Secretary
of the Treasury collect an additional duty that equals the
size of the "bounty or grant" (subsidy) paid on the exportation or manufacture of merchandise imported into the United
States.
A preliminary determination in this case must be made
not later than September 23, 1978, and a final determination
no later than March 23, 1979.
Notice of this action will appear in the Federal Register
on May 25, 1978.
Imports of ampicillin trihydrate from Spain amounted to
approximately $13,000 during calendar year 1977.
o
B-941
0
o
FOR IMMEDIATE RELEASE
May 25, 1978
Contact:
Alvin M. Hattal
202/566-8381
TREASURY ANNOUNCES FINDING
OF DUMPING IN GILMORE CASE
The Treasury Department announced today that it
is issuing a "Finding of Dumping" with respect to
imports of carbon steel plate from Japan.
This action follows the Treasury's January 13,
1978, Determination of Sales at Less Than Fair Value
and the U. S. International Trade Commission's April 24,
1978, Determination of Injury in the case. A Finding of
Dumping means that all entries of the merchandise from
the date of withholding of appraisement, in this case
October 5, 1977, will be assessed for antidumping duties
if they have been sold at below fair value.
Imports of this merchandise during calendar year
1976 were valued at roughly $174 million.
Notice of this action will be published in the
Federal Register of May 30, 1978.
o
B-942
0
o
ipartmentoftheTREASURY
SHINGTON,D.C. 20220
TELEPHONE 566-2041
Press w«uuv;t:
FOR IMMEDIATE RELEASE
May 25, 1978
Non-Press Contact
AUJJCi u E •
m
202/566-5328
202/566-8235
566-8651
566-5286
TRIGGER PRICES ADJUSTED: HEARING SET ON GREAT LAKES
DIVERSION CLAIMS
The Department of the Treasury announced today that the
handling charges used to calculate trigger prices of steel
mill products entering through West Coast ports will be increased from the present rate of $3 to $7 per metric ton,
effective for shipments exported to the United States on or
after May 31, 1978. This adjustment is being made to more
accurately reflect actual Japanese handling costs.
The Department also announced that it will review the
effect of the trigger price mechanism on the Great Lakes region.
Specifically, the Department will consider allegations that a
secondary effect of the trigger price mechanism has been or
will be to divert steel imports from Great Lakes to East, West
and Gulf coast ports.
As a result of a preliminary review of these claims, the
Department is considering adjustments in the Great Lakes freight
rates used to calculate trigger prices for steel plate and cold
and hot rolled sheets to reflect more closely actual Japanese
freight costs. A hearing will consider these proposed adjustments, together with other proposals to correct this claimed
diversionary effect.
Written comment on the issues is invited through Thursday,
June 12, 1978, while written requests to testify will be considered through Thursday, June 8, 1978.
If sufficient interest is expressed, a hearing will be
held on Monday, June 12, 1978, according to Robert H. Mundheim,
Treasury General Counsel.
B-943
-2The Treasury notice, which will be published in the next
several days in the Federal Register, states that the Treasury
Department, in cooperation with officials of the Saint Lawrence
Seaway Development Corporation, has reviewed the trigger price
freight rates in light of Bureau of the Census data concerning
actual shipments to the Great Lakes in 1977. From this review,
it appears that adjustment in some of the freight rates may be
appropriate as follows:
Great Lakes Adjusted Great Lakes
Trigger Price
Trigger Price
Freight Rate
Freight Rate
(per metric ton)
(per metric ton)
Steel Plates $40 $30 - $32
Hot Rolled Sheets $35 $31 - $33
Cold Rolled Sheets $35 $29 - $31
Subject to comments received from the public, it is the
intention of the Treasury Department to adjust the Great Lakes
freight rates within the ranges indicated above and to apply
the adjusted rates to trigger prices for all shipments to the
Great Lakes exported on or after July 1, 1978.
The notice also identifies a number of other proposals
which have been made to correct the alleged diversionary
effect. Specific factual information has been requested to
enable the Department to determine whether any of these proposed
adjustments in the trigger price mechanism are warranted.
Written comment is being requested and a hearing may be
held to air these issues and to secure comment from those
supporting or contesting the basis for adjustments in the
trigger price mechanism.
A copy of the Treasury notice is attached.
#
Department of the Treasury
NOTICE
Adjustment of Handlina Charges and
Hearing on Great Lakes "trigger prices"
for imported steel mill products.
Notice is hereby given that the handling charges used to calculate trigger prices of steel mill products entering through Wfest
Coast ports will be increased to $7 per metric ton, effective for
shipments exported on or after Mav 31, 1978. It has been determined that this adjustment is necessary to reflect more accurately
actual Japanese handlina costs.
The Treasury Department is also hereby inviting public content
on its program for monitoring imports of steel mill products as it
affects the Great Lakes region. A hearing will be held to consider
allegations that a secondary effect of the trigger price mechanism
has been or will be to divert steel imports from Great Lakes to
East, West, and Gulf coast ports. As a result of its preliminary
review of these claims, the Treasury Department is considering an
adjustment in the Great Lakes freight rates used to calculate
triqger prices for steel plate and cold airi hot rolled sheets to
reflect more closely actual Japanese freiaht costs. The hearina will
consider these proposed adjustments, together with other proposals
to correct this claimed diversionary effect.
BACKGROUND; Under the trigaer Drioe mechanism, import specialists at every port of entry monitor the prices of all imported
steel mill products to gather information on possible sales at "less
than fair value" within the meaning of the Antidumping Act. As
guidelines for the aathering of such information, triager prices
have been calculated frcm data on the costs of production of the
Japanese basic steel industry. Information on sales below trigaer
prices is forwarded to Customs headquarters in Washington where it
is tabulated and compared to other available data to determine
whether an antidumping proceeding should be initiated. If, as a
result of such an investiaation. sales at less than fair value are
found by the Treasury Department and injury is found by the International Trade Commission, a dumping finding will be made.
Trigger prices reflect the Japanese cost of producing steel
mill products plus the cost of transporting such products to each
of the four maior importing regions: The Wpst Coast, Gulf Coast*
East Coast, and Great Lakes. As freight costs increase, triqger
prices increase. For example, the current trigger prices for cold
- 2 rolled sheeti/ far each of the four regions axe:
Base Charges to CUF
Price
Freight
Handling
Interest
Itotal
West Coast $297 $23 $3?/ $7 $330
Gulf Coast $297 $23 $5 $8 $333
East Coast $297 $27 $4 $9 $337
Great Lakes $297 $35 $4 $11 $347
It is asserted that both the absolute and relative level of the trigger
prices far the Great lakes region will lead to the diversion of steel
from the Great lakes to West, Gulf, and fest Coast ports. Serious
economic dislocations far the Great lakes region would allegedly
follow frcm such a diversion, particularly for those longshoremen,
stevedores, varehousemen, and terminal operators whose work depends
en inported steel. Moreover, backhaul cargo, such as grain, would
allegedly be diverted to other coasts. Finally, it is claimed that
the Saint Iawrence Seaway Development Corporation, whose annual
revenues are dependent en steel imports, will suffer substantial
losses.
A nutiber of proposals have been offered to correct this alleged
anomaly:
1. Equalize the Great lakes importation charges with those
of the Ekst Coast.
2. Adjust the trigger price importation charges to reflect
more closely actual freight differentials for Japanese
steel iirports as recorded in official U.S. Census tabulations.
3. Adjust the Great lakes inportaticn charges to reflect
the least cost route far the Japanese, even where that
involves an inland route such as the Mississippi River.
Those who contest the need for any change in the current Great
lakes trigger prices point out that the trigger prices wei.e based
upon both the production costs and the transportation costs for the
Japanese. As such, they provide appropriate guidelines for the
Treasury Department to gather information on sales vrtiich warrant
further scrutiny in light of the fair value standard in the Antidumping Act. The Antidurtping Act does not permit equalizing the
•'•For the third quarter, trigger prices on this product will be
increased by 5.5 percent. (43 FR 20070)
2
Subject to the increase announced in this notice.
- 3 different freight costs associated with shipping
merchandise frcm
the country of export to various parts of the United States. Jtar
example, if the West Coast trigaer prices were applied across the
board, the trigaer prices would provide a standard for identifying
sales at potentially less than fair value only at West Coast ports.
Cn the other hand, if the Great Lakes trigger prices were applied
to nation-wide entries, the trigger prices would identify far too
many sales as potentially at less than fair value. Under the
Antidumpina Act Japanese sales to the West Coast can properlv be
made at a lower price than sales to the Great Lakes.
It has also been pointed out that the actual evidence of diversion may be difficult to document. However, if the diversion has
occurred, or will occur, it should be evident from a variety of
sources. For example, Great lakes grain trade offsets freiaht
costs for imported steel into the Great Lakes by providing shippers
with a backhaul cargo. Has this trade been affected? Have seaway
tolls declined? Since the St. Lawrence Seaway opened in mid-April,
clear evidence of a significant diversionary effect has not been
presented to the Treasury Department.
The Treasury Department, in cooperation with officials of the
Saint Lawrence Seaway Development Corporation, has reviewed the
trigger price freight rates in light of Bureau of the Census data
concerning actual shipments to the Great lakes in 1977. From this
review, it appears that adjustments in same of the freight rates may
*be appropriate as follows:
Great Lakes
Trigger Price
Freight Rate
(per metric tan)
Adjusted Great Lakes
Trigger Price
Freight Rate
(per metric ton)
Steel Plates
$40
$30 - $32
Hot Rolled Sheets
$35
$31 - $33
Cold Rolled Sheets
$35
$29 - $31
Subject to comments received from the public, it is the intention
of the Treasury Department to adiust the Great Lakes freight rates
within the ranges indicated above and to apply the adjusted rates to
trigaer prices for all shipments to the Great Lakes exported on or
after July 1, 1978.
PUBLIC COMMENT: The public is invited to Garment on the issues
outlined above. In particular, the Department is interested in any
factual data which would affirm or disaffirm any of the contentions
- 4 made. In considering the possible diversion of steel shipments from
Great Lakes ports of entry* the Department will be interested in
receiving factual evidence concerning steel and related shipments,
such as:
1. The experience of out nun and charter carriers since the
TPM became effective with respect to (a) orders for
shipping space to Great Lakes ports as compared to East
or Gulf Coast ports for the balance of the current year,
(b) number of cancellations of prior orders to Great Lakes
ports, (c) number of diversions from the Great lakes to
East or Gulf Coast ports requested, and (d) volume of
traffic now on order compared to prior years.
2. The extent of the infrastructure at Great Lakes ports
for handling return or onward cargo by vessels delivering
steel and the effect, if any, of the availability of such
cargo on inward freight rates and on outbound shipping
space at Great Lakes ports.
3. The experience of infrastructure facilities (e.g. grain
elevators, marine terminals) since the TPM beoamp ef^ecrive
with respect to (a) cancellations of soaoe or services:
(b) level of orders or volume of transactions: and (c)
coninunications to customers concerning Possible shipning
space rhar wi^l be available at Great lakes ports for the
balance of the year.
PROCEDURES:
1. Written submissions* Written submissions which are received
before the close of business on Thursday. June 12, 1978. will
be considered. Tb b^ included in the record, wirrten submissions must be submitted in five copies. Each submission
should designate clearly the name and address of the party
makina the submission.
2. Requests to present oral testimony: All requests to present
oral testimony, an* an outline of the oronosed testimony,
must be received in writing not later than the close of
business, Thursday, June 8# 1978.
Requests to present oral testimony should include the followina
information:
(a) The name,
(if
the
(if
address, telephone number, and official position
applicable) of the partv submitting the request, and
person or persons vdio will present the oral testimony
different frcm the partv submitting the request);
- 5 (b) The position to be taken by the party; and
(c) The amount of time requested for the presentation of
oral testimony, and, if more than 10 minutes is requested,
the reasons therefore.
Treasury might find it useful to organize oral testimony into
panels of witnesses so that specific issues can be explored in depth
among persons who bring to the discussion varying experience and
points of view.
3. Oral Testimony: If sufficient interest is expressed,
oral testimony will be heard on Monday, June 12, 1978.
Each person scheduled to testify will be notified of the
date and the amount of time allotted for his presentation.
4. Comnunications: All carmunications with regard to written
submissions or oral testimony should be addressed to:
Peter D. Ehrenhaft. Deputy Assistant Secretary for Tariff
Affairs, Room 3424, Department of the Treasury, Washington,
D.C. 20220. Telephone: 202-566-2806.
. MAY 2 5 1978
Dated:
partmentoftheTREASURY
TELEPHONE 566-2041
;HINGT0N,D.C. 20220
May 26, 1978
FOR IMMEDIATE RELEASE
RESULTS OF TREASURY'S WEEKLY BILL AUCTIONS
Tenders for $2,201 million of 13-week Treasury bills and for $3,401 million
of 26-week Treasury bills, both series to be issued on June 1, 1978,
were accepted at the Federal Reserve Banks and Treasury today. The details are
as follows:
RANGE OF ACCEPTED
COMPETITIVE BIDS:
13-week bills
maturing August 31, 1978
Price
High
Low
Average
Discount
Rate
98.326a/ 6.622%
98.314
6.670%
98.317
6.658%
26-week bills
maturing November 30, 1978
Investment
Rate 1/
Discount Investment
Price
Rate
Rate 1/
6.83%
6.88%
6.87%
96.389b/ 7.143% 7.51%
96.375
7.170%
7.54%
96.380
7.160%
7.53%
a./ Excepting 4 tenders totaling $3,230,000
b/ Excepting 1 tender of $200,000
Tenders at the low price for the 13-week bills were allotted 75%.
Tenders at the low price for the 26-week bills were allotted 96%.
TOTAL TENDERS RECEIVED AND ACCEPTED
BY FEDERAL RESERVE DISTRICTS AND TREASURY:
Location
Received
Accepted
Received
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
$
15,995,000
3,468,615,000
16,785,000
39,940,000
26,560,000
25,530,000
504,510,000
43,200,000
3,710,000
22,390,000
10,200,000
298,695,000
$
15,995,000
1,856,490,000
16,785,000
29,940,000
15,560,000
24,030,000
102,260,000
15,200,000
3,710,000
22,390,000
10,200,000
78,695,000
$
68,980,000
4,533,530,000
63,430,000
113,010,000
46,560,000
17,960,000
427,975,000
40,960,000
14,500,000
15,950,000
5,780,000
209,845,000
$
48,780,000
2,815,930,000
63,430,000
97,610,000
29,200,000
17,960,000
158,875,000
13,920,000
4,500,000
15,950,000
5,780,0
123,845,0
5,105,000
5,105.,000
$2,200,540,000c/ $5,563,585,000
$3,400,885.00C
Treasury
9,285,000
TOTALS
$4,485,415,000
9,285,000
c/lncludes $ 320,465,000 noncompetitive tenders from the public.
d/lncludes $ 174,735,000 noncompetitive tenders from the public.
^./Equivalent coupon-issue yield.
B-944
—
Accepted
FOR RELEASE AT 12:15 P.M.
May 26, 1978
TREASURY OFFERS $6,000 MILLION OF 20-DAY TREASURY BILLS
The Department of the Treasury, by this public notice,
invites tenders for approximately $6,000 million of 20-day
Treasury bills to be issued June 2, 1978, representing an
additional amount of bills dated December 22, 1977, maturing
June 22, 1978 (CUSIP No. 912793 Q9 0 ) .
Competitive tenders will be received at all Federal
Reserve Banks and Branches up to 12:30 p.m., Eastern Daylight
Saving time, Thursday, June 1, 1978. Noncompetitive tenders
will not be accepted. Tenders will not be received at the
Department of the Treasury, Washington. Wire and telephone
tenders may be received at the discretion of each Federal
Reserve Bank or Branch. Each tender for the issue must be
for a minimum amount of $1,000,000. Tenders over $1,000,000
must be in multiples of $1,000,000. The price on tenders
offered must be expressed on the basis of 100, with not more
than three decimals, e.g., 99.925. Fractions may not be
used.
The bills will be issued on a discount basis under
competitive bidding, and at maturity their par amount will
be payable without interest. Except for definitive bills in
the $100,000 denomination, which will be available only to
investors who are able to show that they are required by law
or regulation to hold securities in physical form, this
series of bills will be issued entirely in book-entry form
in a minimum denomination of $10,000 and in any higher
$5,000 multiple, on the records of the Federal Reserve Banks
and Branches
Banking institutions and dealers who make primary
markets in Government securities and report daily to the
Federal Reserve Bank of New Yor*k their positions in and
borrowings on such securities may submit tenders for account
of customers, if the names of the customers and the amount
for each customer are furnished. Others are only permitted
to submit tenders for their own account.
B-945
-2No deposit need accompany tenders from incorporated
banks and trust companies and from responsible and
recognized dealers in investment securities for bills to be
maintained on the book-entry records of Federal Reserve
Banks and Branches, or for bills issued in bearer form,
where authorized. A deposit of 2 percent of the par amount
of the bills applied for must accompany tenders for such
bills from others, unless an express guaranty of payment by
an incorporated bank or trust company accompanies the
tenders.
Public announcement will be made by the Department of
the Treasury of the amount and price range of accepted bids.
Those submitting tenders will be advised of the acceptance
or rejection of their tenders. The Secretary of the
Treasury expressly reserves the right to accept or reject
any or all tenders, in whole or in part, and the Secretary's
action shall be final. Settlement for accepted tenders in
accordance with the bids must be made or completed at the
Federal Reserve Bank or Branch in cash or other immediately
available funds on Friday, June 2, 1978.
Under Sections 454(b) and 1221(5) of the Internal
Revenue Code of 1954 the amount of discount at which these
bills are sold is considered to accrue when the bills are
sold, redeemed or otherwise disposed of, and the bills are
excluded from consideration as capital assets. Accordingly,
the owner of these bills (other than life insurance
companies) must include in his or her Federal income tax
return, as ordinary gain or loss, the difference between the
price paid for the bills on original issue or on subsequent
purchase, and the amount actually received either upon sale
or redemption at maturity during the taxable year for which
the return is made.
Department of the Treasury Circulars, No. 418 (current
revision), Public Debt Series - Nos. 26-76 and 27-76, and
this notice, prescribe the terms of these Treasury bills and
govern the conditions of their issue. Copies of the
circulars may be obtained from any Federal Reserve Bank or
Branch.
#
#
#
FOR IMMEDIATE RELEASE
May 26, 1978
Contact:
George G. Ross
202/566-2356
TREASURY RELEASES TAX INITIATIVES
OF THE PRESIDENT'S URBAN PROGRAM
The Treasury Department today made available the
three tax proposals which make up the tax initiatives of
the President's Urban Program, announced on March 27, 1978.
The three proposals are the Targeted Employment Tax
Credit, the Small Issue Industrial Development Bond, and the
Differential Investment Tax Credit. The proposals are in
. the form of draft legislation, explanations, and letters of
transmittal. The legislation was prepared in the form of
amendments to H.R. 12078, the President's Tax Program.
Attached are Fact Sheets, explanations, draft legislation, and a copy of the letter of transmittal to Al Ullman,
Chairman of the House Ways and Means Committee. A similar
letter wa3 sent to Russell B. Long, Chairman of the Senate
Finance Committee, as well as to the President of the Senate
and the Speaker of the House.
Also attached is a list of the areas of the country
which satisfy the distress test for eligibility under the
..Industrial Development Bond and Differential Investment Tax
"Credit provisions of the Administration's Urban Program.
o
3-946
0
o
DEPARTMENT OF THE TREASURY
WASHINGTON. D.C. 20220
ASSISTANT SECRETARY
MAY 2 5 1978
Dear Mr. Chairman:
For your information, I am enclosing copies of
the letters and enclosures which I have sent today
to the Speaker of the House of Representatives and
the President of the Senate with respect to the Small
Issue Industrial Development Bond and Differential
Investment Tax Credit initiatives of the President's
urban program. These proposals, together with the
Targeted Employment Tax Credit proposal sent to you
on May 22, 1978, comprise the tax initiatives of the
President's urban program, announced on March 27,
1978.
Sincer
Donald C. Lubick
Acting Assistant Secretary
(Tax Policy)
The Honorable
Al Ullman
Chairman, Committee on Ways and Means
House of Representatives
Washington, D.C. 20515
Enclosures
FACT SHEET
Small Issue Industrial Development Bonds
The President's Proposal;
. The size of projects which may be financed with tax
exempt "small issues" of industrial development
bonds will be increased from a maximum of $5 million
to $20 million, but .the tax exemption will be allowed
only for acquisition*or construction of land or
depreciable property in "distressed" areas.
The test for -economic distress will be applied to
areas defined by either: 1) the boundaries of any city,
town or other unit of general purpose government or
2) the area within a county's boundaries outside of
all general purpose units of local government.
Local area eligibility will be defined separately for
two groups: local areas with boundaries in whole or
in part within an SMSA and local areas wholly outside
of SMSAs. An area will be eligible if it meets at
least three of four criteria relative to all local
areas within its group: i) its local unemployment
rate is above the average, ii) its five-year growth
rate of employment is below the average, iii) its
five-year growth rate of population is below the
average, and iv) its five-year absolute change in
per-capita income is below the average.
Present Law:
Industrial development bonds are securities issued
by State and local governments for the benefit of
private borrowers. One of the cases for which
interest on such bonds is tax-exempt is for small
issues, where the amount of the bonds sold does not
exceed $1 million or the total capital expenses on
the facility being financed do not exceed $5 million.
2Reasons for the Recommendation:
. Many areas of the nation have been suffering from
high unemployment and a declining economic base.
More investment is needed in these distressed areas
to provide jobs and to promote economic development.
The exception under present law that allows tax
exemption for small issue IDBs enables States and
localities to promote economic development by
attracting new plants* Because their use is universally
available, however, the competitive advantage to any
one locality.in attracting investment is largely cancelled by the use of the IDBs by other localities.
Raising the dollar amount of the small issue exemption
and limiting its application to economically distressed
areas will serve the purpose of encouraging investment where it is most needed.
Effects on Revenue: The revenue effect of this proposal is
negligible through calendar year 1983.
FACT SHEET
Differential Investment Tax Credit
The President's Proposal:
. An additional investment credit of five percent,
beyond the 10 percent credit of current law, will
be provided for certain investments in distressed
areas. This additional credit will be allowed only
for those investments or portions of an investment
for which the Department of Commerce has issued a
"certificate of necessity." Certificates for up to
$400 million of additional credits may be issued
during 1979 and 1980 for eligible investments.
Only investment in distressed areas will be eligible
to be certified. In selecting investments, the
Department of Commerce will be required to consider
the extent to which the investment will provide job
opportunities in and contribute to the tax and economic
bases of the distressed area. In addition, the
Department of Commerce will have authority to certify
investments in distressed enclaves located in jurisdictions that do not themselves qualify as distressed
areas. However, only 5 percent of the investments
certified for the differential credit may be in such
distressed enclaves.
The definition of distressed areas is the same as for
Small Issue Industrial Development Bonds. (See Fact
Sheet for Small Issue Industrial Development Bonds.)
Present Law:
Taxpayers are currently entitled to a credit against
their Federal income tax liabilities equal to 10 percent of their investments in certain qualified assets.
There is no provision in current law for variations
in the investment credit according to the geographic
location of particular investments.
-2-
Reasons for the Recommendation:
. By augmenting the existing 10 percent credit, the
differential investment credit will encourage companies
to undertake specific projects that will create
additional employment opportunities and help to relieve
the fiscal pressure on local governments in communities
that have been encountering relatively slow economic
growth and high unemployment.
The requirement for certification of individual projects will assure that the additional stimulus of
this credit will be limited to projects that are
likely to contribute to economic development and to
provide jobs in distressed communities.
The certification mechanism provides a method for
limiting the total cost of the program by preventing
an open-ended subsidy to all investments in distressed
areas.
Effect on Revenue: This proposal will reduce tax liabilities
by $41 million in calendar year 1979,
$132 million in calendar 1980, and
$114 million in calendar 1981.
FACT SHEET
Targeted Employment Tax Credit
The President's Proposal:
• k Targeted Employment Tax Credit will replace the
New Jobs Tax Credit, which expires after this year.
The proposed tax credit will be available to employers *
of young persons aged 18-24 who are from low-income
households (less than 70% of regional lower living
standard) and handicapped individuals who are referred
from vocational rehabilitation programs.
• The amount of the credit will be one-third of the
employee's FUTA wages up to. a maximum credit of $2,000
for the first year of employment and one-fourth of
those wages up to $1,500 for the second year.
• Eligible individuals will be certified by local agencies
that are designated by the Department of Labor. Neither
the employer nor the IRS will be responsible for
determining eligibility of employees.
• Restrictions and conditions:
—The employee must be employed full-time and for
at least 75 days.
—The credit may not offset more than 90 percent
of tax liability in any year.
—The eiEployer's deduction for wages paid must
be reduced by the amount of the credit.
—No more than 20 percent of an employer's wage
base for Federal unemployment insurance taxes
may be counted in the base for the credit.
--Employers may not simultaneously earn employment
credits and on-the-job training payments or WIN
credits for the same employees.
Present Law:
• The New Jobs Tax Credit allows a credit of up to $2,100
for increased employment in 1977 and 1978.
• Total amount of the credit is one-half of amount by
which current FUTA wages exceeds 102% of prior year's
FUTA wages.
• An additional credit of 10% of FUTA wages is allowed
for certain handicapped individuals.
. Restrictions:
—Credit is limited to $100,000, 25% of present
year FUTA wages, 50% of the excess of total wages
over 105% last year's total wages, or income tax
liability, whichever is less.
--The employer's deduction for wages paid must be
reduced by the amount of the credit allowable.
Reasons for the Recommendation:
. The proposed credit focuses the incentive on disadvantaged
young people, who are experiencing the highest rates of
unemployment.
. The new credit is hot Restricted to companies that have
employment growth. Thus, there will be greater certainty"
that hiring eligibles will result in credits for the
employer. Also, the incentives will be spread more evenly
by industry and region.
. Under the Jobs Credit no incentive is provided for hiring
more than 47 new employees, while under the proposed
credit all taxpaying employers will be given an incentive
to employ additional disadvantaged and handicapped individuals, up to 20% of their FUTA payroll.
• Young persons in poor households will be aided in finding
full-time, private sector jobs and they will be assisted
in keeping these jobs while they learn skills and gain
regular work experience.
• Credits will be earned for employment of about 1.9 million
disadvantaged and handicapped persons when the proposed
program is fully in effect.
Effect on Revenue: This proposal will reduce tax liabilities
by $0.6 billion in calendar year 19 79 and
by $1.5 billion when fully effective.
SMALL ISSUE INDUSTRIAL DEVELOPMENT BONDS
Present Law and Related Provisions of the Administration's
Tax Program
Industrial development bonds (IDBs) are obligations
which raise capital for private business enterprise but are
nominally issued by State or local governments. Most
frequently, the proceeds of an issue of IDBs are used to
acquire or to construct a facility; the facility is then
"leased" to a private user for a rental exactly sufficient to
pay debt service on the bonds. The lease generally provides
that the private user may purchase the facility for a nominal
amount at the end of the lease term. Payment of debt service
on the bonds is secured by the rental payments and the
facility itself. Generally the nominal issuer is not liable
for payment of debt service on the bonds and the holders must
look solely to the credit of the private user.
In issuing tax-exempt IDBs a State or local government
essentially lends its tax exemption to a private business to
enable it to finance facilities at the lower interest rates
prevailing in the tax-exempt market. In addition, the
-2-
"lease" agreement between the issuer and the private user is
generally treated as a conditional sale contract for Federal
income tax purposes; the user is, therefore, able to obtain
the tax benefits associated with ownership of the property,
including investment tax credits and accelerated depreciation
or amortization.
State and local governments use IDB
financing to assist local industrial development.
Since
these governments incur no liability on the bonds, which are
universally recognized as a debt of the private user, the
issuance of IDBs has no direct consequence to the nominal
issuer.
Interest on State and local government obligations is
generally exempt from tax under the Internal Revenue Code.
However, the Revenue and Expenditure Control Act of 1968
denied tax exemption to IDBs, with certain exceptions.
In
general, a bond is an IDB under the Code if (1) the proceeds
of the issue are to be used in any trade or business not
carried on by a government or tax-exempt organization and if
(2) repayment of principal or interest is secured by an
interest in, or derived from payments with respect to,
property used in a trade or business.
Obligations issued by
a State or local government to raise funds for use by a nonprofit, charitable organization in its trade or business are
not generally treated as IDBs and are thus tax exempt.
-3-
One of the exceptions to the general rule allows taxexemption for "small issues" of IDBs in amounts of $1 million
or less if the proceeds are used for the acquisition or*
construction of land or depreciable property.
The $1 million
limitation applies to all bonds issued to provide facilities
in one municipality or county for the same person or group of
related persons.
At the election of the issuer, the $1
million limitation m^y *>e increased to $5 million.
However,
the $5 million limitation applies to the sum of all small
issues plus the total capital expenditures over a six-year
period (other than those financed by small issue IDBs), of
that person or group of related persons in the municipality
or county.
Under the President's 1978 Tax Program, the maximum
small issue exemption would be doubled from $5 million to $10
million.
The small issue exemption would also be limited to
IDBs issued to finance the acquisition or construction of
land or depreciable property in economically distressed
areas.
The President's 1978 Tax Program also includes a Taxable
Bond Option (TBO) for State and local governments.
Under
TBO, State and local governments will have the right to elect
to issue taxable bonds and other debt obligations with the
-4-
Federal Government paying a fixed percentage of the issuer's
interest cost. For obligations issued during 1979 and .1980,
the Federal Government will pay 35 percent of the interest
cost. For obligations issued thereafter, the Federal
Government will pay 40 percent. In general, all otherwise
tax-exempt State and local obligations will be eligible for
TBO. In particular, this means that TBO will be available
for IDBs qualifying for tax exemption under the small issue
exception for distressed areas.
Explanation of Proposal
Increase in Small Issue Exemption
The maximum small issue exemption for IDBs will be
raised from $5 million to $20 million. Tax exemption for
small issue IDBs will be limited to IDBs issued to finance
the acquisition or construction of land or depreciable
property in economically distressed areas.
Alternative Subsidy from National Development Bank
In addition to increasing the limitation for tax-exempt
(or optional TBO) small issue IDBs, the President's urban
proposals will authorize the National Development Bank under
-5-
an alternative program to subsidize the interest costs on
loans for private facilities to be located in distressed
areas.
issues.
This subsidy will be available only for taxable
The subsidy will equal 35 percent of the interest
costs of bonds issued in 1979 and 1980 and 40 percent of the
interest costs of bonds issued after 1980, the same subsidy
rate available under TBO.
Geographic Definition of an Area for Eligibility
An area will be defined as economically distressed
according to the criteria described in the next section.
The
boundaries of an area to which the test for economic distress
will be applied are either:
(1) the boundaries of any city,
town or other unit of general-purpose local government, or
(2) the area within a county's boundaries outside of all
general-purpose units of local government.
In the case of
Alaska, the portion of a Census Division not lying within the
boundaries of a local government will be subject to the test
for economic distress.
Any State or local government may issue a tax-exempt IDB
that meets the definition of a small issue for the
acquisition or construction of land or depreciable property
in any economically distressed area within its boundary.
-6-
Eligibility Conditions
Two geographical categories will be used for purposes of
determining local area eligibility:
(a) all local areas with
boundaries in whole or in part within a Standard Metropolitan
Statistical Area (SMSA) as defined by the Department of
Commerce and reported to the Secretary of the Treasury, and
(b) all local areas wholly outside of SMSAs.
An eligible
local area is an area that meets at least three of the
following four criteria relative to all local areas in its
category:
i. its local unemployment rate (defined over a
suitable period of time) is above the average,
ii.
its five-year growth rate of employment is less
than the average,
iii.
its five-year growth rate of population is less
than the average, and
iv.
its five-year absolute changes in per capita
income is less than the average.
This definition of distress measures both the level of
economic activity (in the unemployment variable) and the rate
of change of economic activity (in the employment growth
rate, population growth rate, and per capita income change
variables).
An area which has below average unemployment may
-7-
still qualify as distressed if it has a low rate of economic
growth according to each of the three measures of change.
This means that poor areas with slow growth can qualify for
assistance even if their unemployment rate is slightly below
the national average.
On the other hand, the use of an
absolute change in per capita income will tend to eliminate
wealthy areas with low percentage, but high absolute, changes
in income since such areas will generally have below average
unemployment.
Thus aid will be channeled to those areas
which are not providing adequate employment opportunities or
are lagging behind the economic expansion of the rest of the
nation.
SMSAs encompass all the major urban areas of the
country.
Dividing local jurisdictions into two groups allows
urban and non-urban areas to be compared to the average
within their own group.
Because some of the evaluation
criteria used may have different meanings in urban and rural
areas, this division is necessary to assure that each area is
evaluated according to reasonably comparable criteria.
In
addition, the division provides that areas of economic
distress in all sections of the country, including both
distressed urban and distressed rural areas, are eligible for
assistance.
-8-
In determining eligibility, data comparisons will be
made for approximately 40,000 local government jurisdictions.
It is important, however, that those areas in the country not
within the boundaries of an incorporated local government
also be eligible for assistance if they meet the test of
economic distress.
To assure this result, these
unincorporated areas will be treated as a separate
jurisdiction for which "balance of county" indicators will be
calculated.
A list of eligible local areas will be published every
year reflecting the most recent available data.
For
predictability in investment planning, loss of eligibility
for a previously eligible local area will be delayed for one
year after failure of the formal eligibility test.
Reasons for Change and Analysis of Effects
The basic purpose of the urban tax proposals is to
encourage private sector investment that will revitalize
geographic areas suffering from long-term economic distress.
Distressed areas include many of the major central cities in
the nation, which have for years suffered the effects of a
declining economic base, high unemployment and the loss of
jobs and population to surrounding suburbs and to high-growth
-9-
regions.
However, the proposal has been designed to take
into account problems of economic distress outside as well a
within major urban areas.
The exception under present law that allows tax
exemption for small issue IDBs enables States and localities
to promote economic development by attracting new plants.
Because their use is universally available, however, the
competitive benefit to any one locality in attracting
investment is largely cancelled by the use of IDBs by other
localities.
This proposal is designed to correct that defec
of present law, by restructuring the incentive to target
investment more sharply to areas of economic distress.
Under the proposed eligibility test, St?te and local
governments will be able to utilize the expanded small issue
IDB provision on behalf of private investments in areas
encompassing about one-third of the nation's population.
Eligible areas will include almost all of the nation's
largest cities, many smaller cities with high unemployment
and slow growth, and stagnating rural areas throughout the
country.
Because the right to issue tax-exempt small issue
IDBs will be limited to investments in eligible areas, the
dollar cost to the Treasury will be negligible.
The
increased volume of IDBs issued in distressed areas will be
-10-
matched by a reduction in IDBs in areas not meeting the
eligibility test.
Thus, the incentives provided in this
program will encourage State and local governments to issue
IDBs to attract additional investment to distressed areas,
while not increasing generally the use of tax-exempt
borrowing or the amount of Federal subsidy under the proposed
TBO.
Revenue Estimate
The revenue effect of this proposal is negligible (less
than $1 million annually) .
SMALL ISSUE INDUSTRIAL DEVELOPMENT BONDS
H.£. 12078 (the Revenue -Act of 197S) is amended as follows:
(1) Amend section 312 (Federal interest subsidyvfor
State and local governments) by adding at the end thereof
the following:
(j)
Industrial Development Bond Issues in
Economically Distressed Areas.—See the National
Development Bank Act of 1978 for alternative subsidy
for issues in economically distressed areas the face
amount of which is $20,000,000 or less (including
issues which fail to satisfy the requirements of
subparagraph (D) of section 103(b)(6) (exemption
for certain small issues of industrial development
bonds) by reason of clause (ii) thereof).
(2) Amend section 321(b)
(a)
By striking out "the National Development
Bank Act of 1978", and inserting in lieu thereof
"section 322 of the Revenue Act of 1978"; and
(b)
By inserting the following paragraph after
paragraph (2):
(3)
by striking out "$5,000,000" in the
heading and text of subparagraph (D) and inserting
in lieu thereof "$20,000,000".
(3) Definition of Economically Distressed Areas.—
Add the following new section to the bill.
-2SEC. 322
ECONOMICALLY DISTRESSED AREAS.
(a)' An area shall be treated as an economically distressed area to the extent such area is located with or within
the qualifying areas shown on a list published by the Secretary
of the Treasury in accordance with subsection (f). Notwithstanding the previous sentence, this treatment shall apply for
the annual or interim period specified in subsection (f) and
for the next following annual period.
(b) Economically Distressed Areas Defined.—An "economically distressed area" is the area of a local government if for
such area of local government at least three of the following
conditions are satisfied:
(1) The unemployment rate is above the average unemployment rate for the statistical grouping to which such
local government belongs;
(2) The rate of growth in employment is less than the
rate of growth for the statistical grouping to which such
local government belongs;
(3)
The absolute change in per capita income is less
than the absolute change for the statistical grouping to
which such local government belongs; and
(4) The rate of growth in population is less than the
rate of growth for the statistical grouping to which such
local government belongs.
The rates referred to in this subsection shall be determined as
specified in subsection (d).
-3(c) Definitions.
(1) The term "local government" means
(A) a municipality, township, or
other political subdivision of a State (other
than a county) which is a unit of general
government (determined on the same principles
as are used by the Bureau of the Census for
general statistical purposes), including
the District of Columbia, and
(B) so much of a county (or, in the case of
Alaska, a census division) as is not specified in
subparagraph (A)•
(2) The term "statistical grouping" shall mean either
all Standard Metropolitan Statistical Areas ("SMSA's")
(as determined by the Secretary of Commerce) considered
as a group, or all areas outside of SMSA's ("non-SMSA's")
considered as a group. A local government belongs to the
statistical grouping comprised of all SMSA's if any part
of the area of such local government is within the area
of an SMSA; otherwise, such local government belongs to
the statistical grouping comprised of non-SMSA's.
(d) Determination of Rates.
(1) Unemployment Rate.—For the purposes of this
section the unemployment rate for a local government
shall be determined by computing the average rate of
-4unemployment in the area contained within the local
government during the roost recent 20 calendar quarters
for which data are available.
The dates that define
the period of time shall be the same for all local
governments.
(2)
Rate of Growth in Employment.—For the
purposes of this section, the rate of growth in employment for a local government shall be determined by
subtracting from the employment in the area contained
within the local government for the most recent 4 calendar
quarters for which data are available, the employment
within such area for a 4-calendar quarter period which
preceded such recent 4 calendar quarters by either 5 or
6 years, as determined by the Bureau of Labor Statistics
for the Secretary of Labor, and dividing this difference
by the employment within such area for the earlier
4-calendar quarter period.
For the interim period
described in subsection (f)(2), the previous sentence
shall be applied by substituting "at least 5 or 6 years"
for "either 5 or 6 years".
The dates that define the
periods of time shall be the same for all local
governments.
(3) Absolute Change in Per Capita Income.—For the
purposes of this section, the absolute change in per capita
-5income for a local government shall be determined"by
subtracting from the per capita income in the area
contained within the local government for the most
recent year for which data are available, the per
capita income within such area for a year which preceded
such recent year by either 5 or 6 years, as determined by
the Bureau of the Census for the Secretary of Commerce
for general statistical purposes.
The dates that
define the periods of time shall be the same for all
local governments.
(4) Rate of Growth in Population.—For purposes
of this section, the rate of growth in population for
a local government shall be determined by subtracting
from the population in the area contained within the
local government for the most recent year for which
population data are available, the population in such
area as of a date which preceded the date of the most
recently available population data by either 5 or 6
years, as determined by the Bureau of the Census for
the Secretary of Commerce for general statistical
purposes, and dividing this difference by the population
within such area for the earlier year. The dates that
define the periods of time shall be the same for all
local governments.
-6(5) Nonavailability of Data for Specified TjLme
Period.—If data are not available for the specified
period of time for eligibility under paragraph (1) or
for the earlier periods of time referred to in paragraphs
(2), (3), and (4), the Secretary of Labor or the Secretary
of Commerce, as the case may be, shall determine the
local rate in question on the basis of data for the
most appropriate period of time of less than 2 0 calendar
quarters (in the case of paragraph (1)) or of less than
5 years (in the case of paragraphs (2), (3), and (4)).
(6) Assignment of Rates.—Where an unemployment
rate or rate of growth in employment cannot be determined
for a local government, the unemployment rate or rate of
growth in employment for the smallest unit of local
government or appropriate geographic area for for which
a local rate has been determined within the jurisdiction
or area in which such local government is located shall
be assigned to such local government.
However, if the
Governor of the State in which such local government is
located has provided the Secretary of Labor with an
unemployment rate or rate of growth in employment for
such local government and the Secretary of Labor determines
that such rate has been developed in a manner consistent
with the procedures used by the Secretary of Labor then
such rate shall be assigned to the local government.
-7(7) For local governments described in
subsection (c)(1) (B), the data required for paragraphs
(1) through (4) shall be determined by subtracting from
the data for the county so much of such data as are
applicable to local governments described in subsection
(c) (1)(A).
(e)
Responsibility for Determining Rates.
(1) The Secretary of Labor shall determine or
assign unemployment rates and rates of growth in
employment for each local government and for each
statistical grouping annually and shall report such
rates annually to the Secretary of the Treasury.
(2)
The Secretary of Commerce shall determine the
absolute change in per capita income and the rate of growth
in population for each unit of local government and for each
statistical grouping annually and shall report such rates
annually to the Secretary of the Treasury.
(f) Based upon the data supplied in accordance with
subsection (e), the Secretary of the Treasury (or his delegate)
(1) Shall annually compile and publish a list
of all local governments which meet the requirements
set forth in subsection (b), and
(2)
Is authorized to publish prior to the first
annual publication described in paragraph (1) an interim
list of all local governments which meet the requirements
set forth in subsection (b).
-8Each such publication shall state the period of time for which
the list is applicable.
DIFFERENTIAL INVESTMENT TAX CREDIT
Present Law and Related Provisions of the Administration's
Tax Program
Taxpayers are entitled to a credit against their Federal
income tax liabilities equal to 10 percent of their
investments in certain qualified assets.
The rate of this
investment credit was temporarily increased to 10 percent
from 7 percent as of January 25, 1975, and is scheduled to
revert to 7 percent on January 1, 1981.
Property eligible
for the investment credit consists of depreciable property
having an estimated useful life of 3 or more years which is
either tangible personal property or other tangible property
(such as fixtures and heavy machinery) used as an integral
part of the productive process.
The amount of investment credit for any year may be
used, dollar for dollar, to offset tax liability of up to
$25,000.
Credits in excess of $25,000 may, in general, be
used to offset up to 50 percent of tax liability in excess of
$25,000.
In any year in which the amount of the taxpayer's
investment credit exceeds the applicable limits, the excess
may be carried back to the three taxable years before and
-2-
forward to the seven taxable years after the year in which
the asset was placed in service.
In the case of pollution control equipment that is
amortized over five years, the amount of the credit is
reduced to 5 percent.
Other exceptions apply to public
utilities, railroads, and airlines.
There is, however, no
provision for variations in the investment credit according
to the geographic location of particular investments.
The President's 1978 Tax Program includes several
significant changes in the investment credit.
The current 10
percent investment credit would be made permanent.
Industrial structures (including investments made to
rehabilitate existing industrial structures) placed in
service after December 31, 1977 would be included among the
assets that will qualify for the credit.
The investment
credit (and investment credit carryovers) would be available
to offset up to 90 percent of a taxpayer's liability for tax,
including the first $25,000 of tax liability.
Special limits
for public utilities, railroads, and airlines would be phased
out.
Certified pollution control facilities eligible for the
special 5 year amortization period would be made eligible for
the full 10 percent investment credit.
-3-
Explanation of the Proposal
The Administration proposes enactment of an additional
investment credit for certain investments in distressed
areas. The amount of this differential credit will be 5
percent, in addition to the existing 10 percent credit, for
those investments or portions of an investment for which the
Department of Commerce has issued a "certificate of
necessity."
Certificates for up to $400 million of
additional credits may be issued during 1979 and 1980 for
eligible investments.
Only investments in distressed areas, as defined for
purposes of the industrial development bond proposal, will be
eligible to be certified.
DEVELOPMENT BONDS."
See "SMALL ISSUE INDUSTRIAL
In selecting investments, the Department
of Commerce will be required to consider the extent to which
the investment will provide job opportunities in and
contribute to the tax and economic bases of the distressed
area.
In addition, the Department of Commerce will have
authority to certify investments in distressed enclaves
located in jurisdictions that do not themselves qualify as
distressed areas. However, only 5 percent of the investments
certified for the differential credit may be in such
distressed enclaves.
-4-
Applications for certificates allowing the additional
credit will be made to the Department of Commerce, which will
select those qualifying for the additional credit.
After the
issuance of a provisional certificate, the investor will be
required, at a time when the investment is nearly complete,
to obtain from the Department.of Commerce a further
certification that the project has been carried out
substantially as described in the provisional certificate.
The final certificate issued by the Department of Commerce,
when filed with the investor's tax return for the year the
project is placed in service, will entitle the investor to
the additional 5 percent credit.
The additional investment
credit otherwise will be subject to current rules governing
qualification, limitations, and carryovers.
Reasons for Change
By augmenting the existing 10 percent credit, the
differential investment credit will encourage companies to
undertake specific projects that will create additional
employment opportunities and help to relieve the fiscal
pressure on local governments in communities that have been
encountering relatively slow economic growth and high
unemployment.
The requirement for certification of
individual projects will assure that the additional stimulus
5-
cf this predit will be concentrated on those projects that
are likely to contribute most to local economic development.
This procedure is similar to the use of certificates of
necessity during World War II and the Korean conflict to
target incentives so as to induce production of goods
necessary to the war effort. The certifying agency will be
in a position to encourage the infusion of private capital
into those localities- that need it the most and to select
those projects that will have the most beneficial economic
effects.
The commitment of $400 million of tax revenues during a
two-year period will encourage a private commitment of $8
billion of investment in economically distressed areas over a
period of several years, as the projects are actually placed
in service.
Revenue Estimate
Change in Tax Liability
($ millions)
:
Calendar Year
:1979
-41 -132 -114 -30 -12
1980
1981
1982
1983
DIFFERENTIAL INVESTMENT TAX CREDIT
R.R. 12078" (ihe Revenue Act of 1978) is amended by adding
the following new sections to the bill:
Sec. 422 , Additional Investment Credit for Certain Distressed .
Area Property.
(a) Allowance.—Section 46(a) (2) (as amended by section 421
of this Act) is amended by adding after subparagraph (B) the
following new subparagraph:
"(C)
Distressed Area Property.—The amount
of credit determined under this paragraph for
the taxable.year is the amount determined without
regard to this subparagraph plus five percent of
that part of the qualified investment (as determined under subsections (c) and (d)) which is
attributable to distressed area property (as
• defined in subsection (h))."
(b) Distressed Area Property.—Section 46 is amended by
adding at the end thereof the following:
"(h)
Distressed Area Property.—For purposes
of this section, a qualified investment is
attributable to distressed area property to the
extent of the basis of new section 38 property
(as defined in section 48(c)), and so much of the
qualified progress expenditures for the taxable
year with respect to progress expenditure property
(as defined in subsection (d)(2)(A)), as are specified
in a final certificate issued pursuant to section 423
of the Revenue Act of 1978.
- 2 Sec. 423/ Certification of Investments in Distressed Areas
as Eligible for Additional Investment Credit _
(a) Availability.—The additional investment credit provided for in section 48(a)(2)(C) of the Code, as amended by
sections 421 and 422 of this Act, shall be available in the
amount finally certified by the Secretary of Commerce (or his
delegate) pursuant to subsection (c).
(b) Provisional. Certification.—
(1) On the request of any person, at such time and
in such manner as the Secretary of Commerce may prescribe
by regulations, the Secretary of Commerce may issue a
provisional certificate stating that a proposed investment
made
(A) in a jurisdiction that qualifies as an
economically distressed area (as defined in section
322 of this Act), or
(B) in any other locale that substantially
meets the criteria used to define a distressed area,
will be eligible for the additional credit for "distressed
area property" provided in section 48(a)(2)(C). For purposes of this subsection, the determination of whether an
area qualifies under subparagraph (A) or (B) shall be made
as of the date of issuance of the provisional certificate.
(2) In issuing the provisional certificate provided
for in paragraph (1), the Secretary of Commerce shall
3describe the project for which the certificate is issued,
the period of time (which for good cause shown ther
Secretary of Commerce may extend) within which the
project must be substantially completed, the maximum
amount of investment for which the certificate is issued,
and such other terms and conditions as the Secretary of
Commerce may prescribe by regulations..
(3)
In selecting investments for which certificates
may be issued pursuant to paragraph (1), the Secretary of
Commerce shall take into consideration, among other things,
(A)
for purposes of paragraph (1)(A), the extent
to which any proposed investment will contribute to the
- economic and tax bases of the jurisdiction in which it
is proposed to be made, the extent to which it will,
when placed in service, result in an increase in job
opportunities,particularly for the chronically unemployed and low income and minority residents, available in such jurisdiction, and such other factors as
the Secretary of Commerce by regulations may prescribe,
and
(B)
for purposes of paragraph (1)(B), the pop-
ulation density of the locale, the extent to which
residents of the locale will benefit frcm the investment, and such other factors as the Secretary of
Commerce by regulations may prescribe.
- 4 (c) Final certification.—
(1) When the Secretary of Commerce finds that any •
investment for which a provisional certificate was issued
pursuant to subsection (b) has been substantially completed within the time, in the manner and in compliance
with such other terms and conditions as were set forth in
such provisional certificate, the Secretary of Commerce
shall issue a final certificate which shall specify, among
other things, the identity of the project, and the amount
of investment finally certified as being in distressed area
property.
Such final certificate shall also contain such
additional information as the Secretary of Commerce (in
consultation with the Secretary of the Treasury) may
require by regulations.
(2) No final certificates may be issued after
December 31, 1982.—No final certificate issued after
December 31, 1982 shall be valid for purposes of subsection (a) .
(d) The amount of distressed area investment for which
the Secretary of Commerce may issue provisional certificates
may not exceed, in the aggregate, $4 billion during calendar
year 1979 and $8 billion during calendar years 1979 and 1980;
provided, that of such amount, no more than $200 million during
calendar year 1979 and $400 million during calendar years 1979
and 1980 may be for investments described in subsection (b)(1)(B).
DEPARTMENT OF THE TREASURY
WASHINGTON. D.C. 20220
ASSISTANT SECRETARY
MAY 2 2 1978
Dear Mr. Chairman:
For your information, I am enclosing copies
of the letters and enclosures which I have sent
today to the Speaker of the House of Representatives
and the President of the Senate with respect to the
Targeted Employment Tax Credit initiative of the
President's urban program.
Sincerely,
Donald C. Lubick
Acting Assistant Secretary
(Tax Policy)
The Honorable
Al Ullman
Chairman, Committee on Ways and Means
House of Representatives
Washington, D.C. 20515
Enclosures
TARGETED EMPLOYMENT TAX CREDIT
Present Law
Under present law, a New Jobs Tax Credit is allowed to
employers for additions to employment in a trade or business over a base
level that is determined by employment in the previous calendar year
Qualified increases in employment are measured by the amount
of an employer's aggregate unemployment insurance wages
under the Federal Unemployment Tax Act (FUTA) . Generally,
the credit is 50 percent of the amount by which FUTA
wages paid during the current calendar year exceeds 102
percent of FUTA wages paid during the preceding
year.
calendar
An additional credit equal to 10 percent of FUTA
wages paid to certain handicapped individuals is also
allowed.
The credit applies only to FUTA wages paid for
calendar years 1977 and 1978.
The amount of the New Jobs Tax Credit is limited to
the lesser of:
(1)
50 percent of the amount by which total wages
paid during the current year exceeds 105 percent
of total wages paid during the previous year;
(2) 25 percent of FUTA wages paid during the current
year;
-2(3)
$100,000 for any given year (except for the
additional 10 percent credit for handicapped
individuals); or
(4) The employers' income tax liability for the year,
reduced by certain other credits.
The employer's deduction for wages must be reduced by the
amount of the credit allowable.
Unused credits may be
carried back three years and forward seven years.
Special rules apply to controlled groups of corporations and
other entities under common control, self-employed individuals
who become employees, and situations where ownership of a
major portion of a business changes hands.
Explanation of the Proposal
The Administration proposes that the present New Jobs
Tax Credit be allowed to expire, as scheduled, and that a
Targeted
Employment Tax Credit be enacted in its place to
be effective January 1, 1979. This credit would be available
to employers of certain low-income young persons and certain
handicapped individuals.
These persons would be certified
as eligible by local agencies designated as "prime sponsors"
under the Comprehensive Employment and Training Act (CETA).
To be certified as eligible, an individual must be either
(1) at least 18 years of age and no more than 24 years of
age and a member of a household that has an income of less
than 70 percent of the regional lower living standard, or
- 3 (2) a handicapped individual referred to the employer under.
a vocational rehabilitation referral plan. An individual
may not be certified as eligible while employed under a
contract for on-the-job training that is financed from any
Federally funded source.
Generally, an employer would be entitled to a credit
against income tax equal to one-third of the FUTA wages
paid to eligible employees during their first year of
employment plus one-fourth of the FUTA wages paid to eligible
employees during their second year of employment. The credit
is available only for full-time employment (at least 30 hours
per week) in a trade or business within the United States;
and no credit will be allowed unless the employee has been
kept in continuous full-time employment for at least 75
calendar days. The amount of base wages eligible for the
credit in any year is limited to 20 percent of the employer's
total FUTA payroll. The amount of the credit that may be
claimed in any year is also limited by the same rule that the
Administration has prcposed for the investment credit and for the
welfare credits; that is, the total amount of all of these
tax credits may not exceed 90 percent of tax liability in
any 1 year. Credits in excess of the 90 percent limit may
be carried back 3 years or forward 7 years, as under current
law. The requirement of present jobs credit that the
- 4 employer's deduction for wages be reduced by the amount of
the credit allowed would also be continued under this proposal.
An employer would not be allowed to claim a WIN or welfare
credit and a targeted employment credit for wages paid to
the same employee.
Reasons for Change
The Targeted Employment Tax Credit would replace the
present, unfocused Jobs Credit that may reward employees for
any increase in employment.
Thus, the tax incentive for
hiring additional employees would be focused on disadvantaged
young people, who are experiencing
as a group
the highest
rates of unemployment, and on handicapped individuals.
In
recent years, the average unemployment rate among disadvantaged
18 to 24 year
olds has been several tiroes the average rate
for the labor force as a whole.
In addition, there is
evidence that employment of minorities within this group has
not responded to the overall decline in unemployment in the
current recovery as rapidly as would be forecast from previous
recoveries.
The Targeted Employment Tax Credit attacks a
serious problem of structural unemployment and is, therefore,
an important complement to a program of overall fiscal
stimulus.
- 5 The proposed employment credit also avoids the tendency
of the present incremental credit to reward industries and
regions that experience rapid or sporadic employment growth
relative to those that have gradual or no growth. This
feature of the present jobs credit is not only unfair, but
it also may contribute to cyclical instability in the economy.
The existing credit provides no additional hiring incentive
for employers that are subject to the $100,000 ceiling
nor has it succeeded in stimulating many new employment
opportunities among employers that are not limited by this
ceiling. Recent preliminary evidence from a survey of taxpayers indicates that a very large percentage of the existing
credit goes to employers who report no conscious effort to
increase employment in response to the credit.
The proposed credit will provide assistance for
disadvantaged young persons to find jobs or to obtain better
jobs in the private labor market. It will also provide
private employers an incentive to retain eligible workers
during the critical first 2 years of employment in which
work habits and skills are developed. The eligible individual will be able to offer an employer the prospect of a
tax credit of as much as $2,000 for the first year of
employment and up to $1,500 for the second year of employment.
- 6 So long as the employee is retained for at least 75 calendar
days, and eligible employees account for no more than 20 percent of FUTA payroll, the employer will be entitled to the
tax credit. The amount of credit will not depend upon the
size of the employer's business or how rapidly it is growing.
There are no "recapture" rules for employees that leave,
whatever the cause. Thus, there is a high degree of certainty
associated with this proposal. Such certainty is important
to the success of any economic incentive program.
An employee who meets the eligibility criteria need not
change jobs or experience a period of unemployment in order
to qualify an employer for credits. However, an employee
who leaves a job after 75 calendar days, must be recertified
as still within the age and income limits in order to remain
eligible. These rules are intended to provide flexibility
for employers and employees in their employment decisions
and also to minimize compliance and administrative burdens.
The employer would only need to keep track of the first day
of employment for each eligible employee and maintain
separate accounts for FUTA wages paid to those in the first
year and those in the second year of employment. The
employee who loses a job or wishes to seek a better one may
have the advantage of eligibility at any time that the age
and household income tests are met. Neither the certification
agency, nor the IRS would be required to follow individual
workers from job to job.
- 7 tinder this proposal an employer whose work force con- *
sists primarily of semiskilled or inexperienced workers could
not undertake wholesale replacement of non-eligible employees
with eligible employees. The share of FUTA payroll that
qualifies for the credit is limited to 20 percent. This is
approximately the average rate of labor turnover in a year,
so that employers could reach the maximum credit in a year
by filling job vacancies as they normally occur.
When the proposed program is fully in effect, credits
will be allowed on behalf of approximately 1.9 million disadvantaged and handicapped workers. Many of these would
otherwise have been unemployed and many will have found
better jobs (including full-time in place of part-time jobs)
as a result of their eligibility.
Revenue Estimate
Change in Tax Liability
($ millions)
Calendar Years
~~
19 79
19 80
19 81
19 82
19 83
-562 -1,069 -1,231 -1,306 -1,381 -1,498
Full
effect
TARGETED EMPLOYMENT TAX CREDIT
H.R. 12078 (the Revenue Act of 1978) is amended by
adding the following new section to the bill.
SECTION 215.
TARGETED EMPLOYMENT TAX CREDIT.
(a) Amount of Credit.—Section 51 of the Internal Revenue
Code of 1954 is amended to read as follows:
"SEC. 51. AMOUNT OF CREDIT.
"(a)
First-In-First-Out Rule.—The amount of the
credit allowed by section 44B for the taxable year shall
be an amount equal to the sum o f —
"(1)
the section 44B credit carry-
overs carried to such taxable year,
"(2)
the amount of the credit determined
under subsection (b) for such taxable year, plus
"(3)
the section 44B credit carry-
backs carried to such taxable year.
"(b)
Determination of Amount of Credit for Current
Taxable Year.—The amount of the credit determined under
this subsection for the taxable year shall be an amount
equal to the sum o f —
"(1)
the amount that is equal to 1/3 of
the wages paid to full-time eligible employees
during their first year of employment, and
"(2)
the amount that is equal to 1/4 of
the wages paid to full-time eligible employees
during their second year of employment.
- 2 For purposes of this subpart, an eligible employee's first
year of employment begins on the first day of employment
after certification or referral as described in section
51(d)(2), or, in the case of an individual who is employed
at the time of certification or referral, on the first day
of employment in the calendar year in which certification
or referral occurs.
"(c)
Limitations and Conditions for Allowance.—
"(1)
Seventy-five day rule.—No credit shall be
allowed with respect to an eligible employee unless
that employee is employed for at least seventy-five
consecutive calendar days.
"(2)
Remuneration must be for trade or business
employment within the United States.—Remuneration
paid to an eligible employee shall be taken into
account only if more than one-haj.f of the remuneration
so paid is for services performed in the United States
in a trade or business of the employer.
"(3)
WIN credit may not be claimed.—An employer
allowed a credit for the taxable year under section 40
with respect to the employment of an employee who is
an eligible employee within the meaning of subsection
(d)(2) shall not be allowed a credit under section 44B
for wages paid to that employee during that taxable year
-3"(4)
Maximum amount of credit attributable
to an employee's first year of employment.—The
amount of the credit allowed attributable to wages
paid to any one full-time eligible employee during
the first year of employment shall not exceed $2,000.
"(5)
Limitation based on total wages.—The
aggregate amount of wages used in computing the credit
under subsection (b) shall not exceed 20 percent of the
total amount of wages paid to all employees during the
calendar year ending with or within the employer's
taxable year.
"(d)
Definitions.—For purposes of this subpart.—
"(1)
Wages.—The tern 'wages' has the meaning
given the term 'wages'
by section 3306(b), except
that for purposes of applying section 3306(b) services
performed by an eligible employee—
"(A)
during more than one-half of any
pay period (within the meaning of section
3306(d)) within the taxable year that
constitute agricultural labor (within the
meaning of section 3306 (k)), or
"(B)
for which more than one-half of
the remuneration for the taxable year is
attributable to services described in
section 3306(c)(9),
shall be considered to be employment.
- 4 "(2) Eligible employee.—The term 'eligible
employee' means an individual w h o —
"(A)
has been certified by the Secretary
of Labor or such entity that he may choose,
including a prime sponsor (as designated by
the Secretary of Labor under chapter 17 of
title 29, United States Code)
or the state
employment security agency, to be at the time
of certification—
"(i)
at least eighteen years of age
but not yet twenty-five years of age,
"(ii)
a member of a household that
has an annualized income for the 6 month
period prior to certification (exclusive
of unemployment compensation and welfare
payments) which, in relation to family
size, is less than seventy percent of the
lower living standard income level, and
"(iii)
not participating in an on-
the-job training position in which funds
provided, directly or indirectly, by the
Federal Government are being paid to the
employer as part of that individual's
participation; or
- 5 "(B)
has a physical or mental disability
which constitutes or results in a substantial
handicap to employment and has been referred to
the employer upon completion of (or while receiving)
rehabilitative services pursuant t o —
"(i)
an individualized written rehabilita-
tion plan under a State plan for vocational
rehabilitation services approved under the
Rehabilitation Act of 1973, or
"(ii)
a program of vocational rehabilita-
tion carried out under chapter 31 of title 38,
United States Code.
"(3)
Lower living standard income level.—The term
'lower living standard income level' means that income
level (adjusted for regional and metropolitan and urban
and rural differences and family size) determined annually
by the Secretary of Labor based upon the most recent 'lower
living family budget' issued by the Secretary of Labor."
(b)
Special Rules.—
(1)
Trades or businesses under common control.—
Subsections (a) and (b) of section 52 of the Internal
Revenue Code of 1954 are amended to read as follows:
"(a)
Controlled Group of Corporations.—For
purposes of this subpart, an eligible employee who
works for more than one corporation that is a member
- 6 of the same controlled group of corporations shall
be treated as employed by a single employer.
In
such a case, the credit (if any) allowed by
section 44B to any such member shall be determined
by the amount of wages it has paid the employee
during the taxable year, after first taking into
account any wages previously paid during the
taxable year by other members of the controlled
group.
For purposes of this subsection, the term
•controlled group of corporations' has the meaning
given to such term by section 1563 (a) , except that—
"(1) 'more than 50 percent' shall be
substituted for 'at least 80 percent' each
place it appears in section 1563 (a) (1) , and
"(2)
the determination shall be made
without regard to subsections (a) (4) and (e) (3)
(C) of section 1563.
("b)
Employees of Partnerships, Proprietorships,
Etc., Which Are Under Common Control.—For purposes
of this subpart, under regulations prescribed by the
Secretary, an eligible employee who works for more
than one trade or business (whether or not incorporated)
in a group of trades or businesses that are under common
control shall be treated as employed by a single employer*
- 7 and the credit (if any) allowed by section 44B to
any such trade or business shall be determined by
the amount of wages it has paid the employee during
the taxable year, after first taking into account
any wages previously paid during the taxable year
by other trades or businesses in the same group under
common control.
The regulations prescribed under
this subsection shall be based on principles similar
to the principles which apply in the case of
subsection (a).".
(2)
Conforming amendments.—
(A)
Subsections (c) and (e) of section 52 are
deleted, subsection (d) is relettered as subsection
(c), and subsection (f) is relettered as subsection (d).
(B)
Subsection (g) of section 52 is relettered
as subsection (e) and is amended by inserting "and"
at the end of paragraph (1), by striking out ", and"
at the end of paragraph (2) and inserting in lieu
thereof a period, and by striking out paragraph (3).
(C)
Subsection (h) of section 52 is relettered
as subsection (f), and subsections (i) and (j) are
deleted.
- 8 (c) Limitation Based on Amount of Tax.—
(1) Subsection (a) of section 53 of the Internal
Revenue Code of 1954 is amended to read as follows:
"(a)
General Rule.—The credit allowed by
section 44B for the taxable year shall not exceed
ninety percent of its adjusted tax base provided
in section 54 for the taxable year.".
(2)
Subsection (b) of section 53 is deleted.
(3) Subsection (c) of section 53 is relettered as
subsection (b) and amended to read as follows:
"(b)
Carryback and Carryover of Unused Credit.—
"(1)
In general.—If the sum of the amount
of the section 44B credit carryovers to the
taxable year under section 51 (a) (1) plus the
amount determined under section 51 (a) (2) for
the taxable year exceeds the amount of the
limitation provided by subsection (a) for such
taxable year (hereinafter in this subsection
referred to as the "unused credit year"), such
excess attributable to the amount determined
under section 51 (a) (2) shall b e —
" (A) a section 44B credit carryback to
each of the 3 taxable years preceding the
unused credit year, and
- 9 "(B)
a section 44B credit carryover
to each of the 7 taxable years following
the unused credit year,
and, subject to the limitations imposed by section 51(b) and subsection (a) of this section,
shall be taken into account under the provisions
of section 51(a) in the manner provided therein.
If any portion of such excess is a carryback to
a taxable year beginning before January 1, 1977,
section 44B shall be deemed to have been in
effect for such taxable year for purposes of
allowing such carryback as a credit under such
section.
The entire amount of the unused credit
for an unused credit year shall be carried to the
earliest of the 10 taxable years to which (by
reason of subparagraphs (A) and (B)) such credit
may be carried, and then to each of the other 9
taxable years to the extent that, because of the
limitation contained in paragraph (2), such
unused credit may not be added for a prior taxable year to which such unused credit may be
carried.
- 10 "(2) Limitation on carrybacks.--The amount
of the unused credit that may be taken into
account under section 51 (a) for any preceding
taxable year shall not exceed the amount by which
the limitation provided by subsection (a) of this
section for such taxable year exceeds the sum of—
" (A)
the amounts determined under
paragraphs (1) and (2) of section 51 (a)
for such taxable year, plus
"(B)
the amounts which, by reason of
this subsection, are carried back to such
taxable year and are attributable to taxable
years preceding the unused credit year.
"(3)
Limitation on carryovers.— The amount
of the unused credit that may be taken into account
under section 51 (a) (1) for any succeeding taxable
year shall not exceed the amount by which the
limitation provided by subsection (a) of this
section for such taxable year exceeds the sum of
the amounts which, by reason of this subsection,
are carried to such taxable year and are attributable to taxable years preceding the unused credit
year
n
- 11 (d)
Technical and Conforming Amendments.~
(1)
Clerical amendments.—
(A)
The table of sections for subpart A of
part IV of subchapter A of chapter 1 is amended
by striking "Sec. 44B.
Credit for employment of
certain new employees.", and inserting in lieu
thereof, nSec. 44B.
Targeted employment tax
credit."
(B)
The table of subparts for part IV of
subpart IV of subchapter A of chapter 1 is amended
by striking "Subpart D.
Rules for computing credit
for employment of certain new employees.", and
inserting in lieu thereof, "Subpart D.
Rules for
computing targeted employment tax credit."
(2) Minimum tax.—Clause (iv) of section 56 (e)
(1) (A) is amended by striking out "credit for employment
of certain new employees", and inserting in lieu thereof
"credit for employment of certain employees".
(3)
Corporate reorganizations.—
(A)
Paragraph (26)of section 381 (c) (relating
to items of the distributor or transferor corporation)
is amended by striking the word "NEW" from the heading.
- 12 (B) Section 383 (relating to special limita- .
tions on unused investment credits, work incentive
program credits, new employee credits, foreign taxes,
and capital losses) , as in effect for taxable years
beginning after June 30, 1978, is amended—
(i) by striking out "to any unused new
employee credit of the corporation under section 53 (c)," and inserting in lieu thereof
"to any unused new employee or targeted employment tax credit of the corporation under
section 53 (b),"; and
(ii) by inserting immediately after "New
Employee Credits," in the heading the phrase
"Targeted Employment Tax Credits,"
(C) Section 383 (as in effect on the day before
the date of the enactment of the Tax Reform Act of
1976) is amended—
(i) by striking out "to any unused new
employee credit of the corporation under
section 53(c)," and inserting in lieu thereof
"to any unused new employee or targeted
employment tax credit of the corporation
under section 53 (b),"; and
- 13 (ii)
by inserting immediately after "New"
Employee Credits ," in the heading the phrase
"Targeted Employment Tax Credits,".
(D)
The table of sections for part V of sub-
chapter C of chapter 1 is amended by inserting after
"new employee credits," the phrase "targed employment
tax credits,".
(4)
Statutes of limitation and interest relating to
targeted employment tax credit carryback.—
(A) Assessment and collection.—Subsection (p)
of section 6501 (relating to limitations on assessment
and collection) is amended b y —
(i)
revising the heading to read "Carry-
backs of Credits under Section 44B"; and
(ii) striking out "new employee" each place
it appears and inserting in lieu thereof
"section 44B".
(B)
Credit or refund.—Paragraph (9) of sec-
tion 6511 (d) (relating to limitations on credit or
refund) is amended b y —
(i)
revising the heading to read "Special
period of limitation with respect to carrybacks
of credits under section 44B"; and
(ii)
striking out "new employee" each place
it appears and inserting in lieu thereof
"section 44B".
- 14 (C) Interest on underpayments and overpayments.Paragraph
(5) of section 6601 (d) (relating to
income tax reduced by carryback or adjustment for
certain unused deductions) and section 6611 (f)
(relating to refund of income tax caused by carryback or adjustment for certain unused deductions)
are amended b y —
(i) revising the headings to read "carryback of credits under section 4 4B."; and
(ii)
striking out "new employee" each
place it appears and inserting in lieu thereof
"section 44B".
(5) Tentative carryback adjustments.—
(A) Application for adjustment.—Section 6411
(relating to quick refunds in respect of tentative
carryback adjustments) is amended—
(i) by striking out "or unused new employee
credit" each place it appears in such section
and inserting in lieu thereof "unused new
employee or targeted employment tax credit",
(ii) by striking out "new employee credit"
each place it appears in the first two sentences
of subsection (a) and inserting in lieu thereof
"new employee or targeted employment tax credit",
and
- 15 (iii)
by striking out "section 53 (c)," •
in the first sentence of subsection (a) and
inserting in lieu thereof "section 53(b),".
(B) Tentative carryback adjustment assessment
period.—Section 6501 (m) (relating to tentative
carryback adjustment assessment period) is amended
by striking out "or a new employee credit carryback"
and inserting in lieu thereof "a new employee credit
carryback, or a targeted employment tax credit
carryback".
(6) Self-employment tax.—Subsection (a) of seeon 1402 (relating to net earnings from self-employment)
amended by—
(A) striking out "and" at the end of paragraph (11) ;
(B) striking out the period at the end of
paragraph (12) and inserting in lieu thereof
"; and "; and
(C) adding a new paragraph (13) to read
as follows;
"(13) the deduction for wages and salaries
shall be determined without regard to section
280C".
List of Eligible Jurisdictions for the Industrial Development
Bond and Differential Investment Tax Credit Provisions of
the Administration's Urban Program
The accompanying list indicates the areas of the country
which satisfy the distress test for eligibility under the
Industrial Development Bond and Differential Investment Tax
Credit provisions of the Administration's Urban Program.
For towns, cities, and townships shown in the list, the
eligible area is defined by the boundaries of the local jurisdiction. In the case of counties, the eligible area refers
to that portion of the county outside of incorporated or
organized jurisdictions.
The key to the state codes in the list of eligible
areas is as follows:
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
0 5 / 2 3 / 7 8 AT 0 l : ? 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
1 BARBOUR COUNTY
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
i
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
i
1
1
1
1
I
1
1
1
1
1
266-274 O - 78 - 5
BIBB COUNTY
BULLOCK COUNTY
BUTLER COUNTY
CALHOUN COUNTY
CHAMBERS COUNTY
CHOCTAW COUNTY
CLARKE COUNTY
CLAY COUNTY
CLEBURNE COUNTY
COLBERT COUNTY
CCNECUH COUNTY
C O O S A COUNTY
C O V I N G T O N COUNTY
CULLMAN COUNTY
DALE COUNTY
D A L L A S COUNTY
ESCAMBIA C O U N T Y
E T O W A H COUNTY
FAYETTE COUNTY
GENEVA C O U N T Y
G R E E N E COUNTY
HALE COUNTY
LAWRENCE COUNTY
LIMESTONE COUNTY
LOWNOES COUNTY
MACON COUNTY
MADISON C O U N T Y
MARENGO C O U N T Y
MARSHALL C O U N T Y
MCNROE C O U N T Y
MORGAN C O U N T Y
PERRY COUNTY
PICKENS COUNTY
PIKE COUNTY
RANDOLPH COUNTY
RUSSELL C O U N T Y
TALLADEGA C O U N T Y
TALLAPOOSA C O U N T Y
WILCOX COUNTY
WINSTON COUNTY
BLUE S P R I N G S TOWN
C L A Y T O N TOWN
C L I O TOWN
E U F A U L A CITY
L O U I S V I L L E TOWN
PAGE
OF
THE
TREASJRY
i
05/23/73
AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY rE!ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
1 BRENT TOWN
1
CENTREVILLE CITY
1
MIOWAY TOWN
i
UNION SPRINGS CITY
1
G E O R G I A N A TOWN
1
GREENVILLE CITY
1
MCKENZIE TOWN
1
ANNISTON CITY
1
BLUE M O U N T A I N TOWN
1
H 0 8 S 0 N CITY TOWN
1
JACKSONVILLE CITY
1
OHATCHEE TOWN
1
O X F O R D TOWN
1
PIEDMONT CITY
1
W E A V E R TOWN
1
F I V E P O I N T S TOWN
1
LAFAYETTE CITY
1
L A N E T T CITY
1
M A P L E S V I L L E TOWN
1
T H O R S B Y TOWN
1
GILBERTOtfN TOWN
1
S I L A S TOrfN
1
TGXEY TOWN
1
PENNINGTON TOWN
1
F U L T O N TOWN
1
G R O V E HILL TOWN
1
J A C K S O N CITY
1
THQMASVILLE CITY
1
EDWARDSVILLE TOWN
1
LEIGHTON TOWN
1
L I T T L E V I L L E TOWN
1
SHEFFIELD CITY
1
T U S C U M 6 K CITY
1
C A S T L E B E R R Y TOWN
1
EVERGREEN CITY
1
R E P T O N TOWN
1
GOODWATER CITY
1
RCCKFGRD TOWN
1
ANOALUSIA CITY
1
F L O R A L A CITY
1
H E A T H TG*N
I
L C C K H A R T TOWN
I
OPP C I T Y
I
RIVER F A L L S TOWN
L B A B B I E CITY
I C A R O L I N A TOWN
OF
THE
TREASURY
05/23/78 AT 31:25
U . S . D E P A R T M E N T OF THE
DISTRESSED AREA ELIGIBILITY TLiST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
1 GAN1T TOWN
1 HORN HILL TOWN
1 LIbERTYVILLE TOWN
1 O N Y C H A TOWN
1 S A N F O R D TOWN
1 G A R D E N CITY TOWN
1 H A N C E V I L L E TOWN
1 S O U T H V I N E N G N T TOWN
1 F A I R V I E W TOWN
1 G O O D HOPE TOWN
1 B A I L E Y T C N TOWN
1 A R I T O N TOWN
1
M I D L A N D CITY TOWN
1
N E W T O N TOWN
1 O Z A R K CITY
1 P I N C K A R D TOWN
1 D A L E V I L L E TOWN
1 LEVEL PLAINS TOWN
1 G R I M E S TOWN
1 N A P I E R FIELD TOWN
1 C L A Y H A T C H E E TOWN
1 ORRVILLE TOWN
1 SELMA CITY
1 H A M M O N D V I L L E TOWN
1 S H I L O TO*N
1 A T M O R E CITY
1 B R E W T O N CITY
1 E A S T BREWTON TOWN
1 F L O M A T O N TOWN
1
P C L L A R O TOWN
1
RIVERVIEW TOWN
1 ALTOONA TOWN
1 A T T A L L A CITY
1 G A D S O E N CITY
1 G L E N C O E TOrfN
1
RAINBOW CITY TOWN
1
REECE CITY TOWN
1 WALNUT G R O V E TOWN
1
M G U N T A I N 3 G R 0 TOWN
1 S A R D I S CITY TOWN
I
R I D G E V I L L E TOWN
1 F A Y E T T E CITY
1 H C O G E S TOWN
1
BLACK
RRED
U S S EBAY
L LTOrfN
V ICITY
LLE CITY
PAGE
TREASURY
3
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
1 CCFFEE SPRINGS TOWN
1
GENEVA CITY
1
HARTFORD TOWN
1
MALVERN TOWN
1
SAMSON CITY
1
SL0C0M8 TOWN
1
EUNOLA TOWN
1
BOLIGEE TOWN
1
EUTAW CITY
1 F C R K L A N D T3WN
1
AKRON TOWN
1
GREENSBORO CITY
1
NEW3ERN TOWN
1
HEADLAND C I T Y
1
BRIDGEPORT CITY
1
8ESSEMER CITY
1
BIRMINGHAM C I T Y
1
D E T R O I T TOWN
1
ST FLORIAN TOWN
1
C C U R T L A N 3 TOWN
1
H I L L S B O R O TOWN
1
TCWN CREEK TOWN
1
ARDMGRE TOWN
1
A T H E N S CITY
1
E L K M O N T TOWN
1
MCORESVILLE TOWN
1
LESTER TOWN
1
FORT D E P O S I T TOWN
1
8ENT0N TOWN
1
H A Y N E V I L L E TOWN
1
NOTASULG* TOWN
1
TUSKEGLE C I T Y
1
F R A N K L I N TOWN
1
HUNTSVILLE C I T Y
1
MAOISON TCWN
1
GURLEY TOWN
i TRIANA TOWN
L O W E N S CROSS RCAOS TOWN
L D A Y T O N TOWN
L D E M O P O L I S CITY
L F A U N S D A L E TOWN
L LINDEN CITY
THOMASTON TOWN
MYRTLEwOOD TOWU
SWEETWATER TOWN
P R O V I D E N C E TOWN
PAGE
OF
THE
TREASURY
4
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. DEPARTMENT
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
1 BEAR CREEK TOWN
1
BRILLIANT TOWN
1
G U I N TUWN
1
HACKLEaURG TOWN
1
AL8ERTVILLE CITY
1
ARAB CITY
1
G R A N T TOWN
1
GUNTERSVILLE CITY
1
U N I O N G R O V E TOWN
1
B A Y O U LA 3 A T R E T O W N
1
PRICHARO CITY
1
M O U N T V E R N O N TOWN
1
W I L M E R TOWN
1
BEATRICE TOWN
1
E X C E L TOWN
1
F R I S C O CITY TO^N
I
MCNROEVILLE CITY
STATE = l: 201 RECORDS
PAGE
OF
THE
TREASURY
5
PAGE
05/2 3/78 A T ^
: 2
^pARTMENT
0F
THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
1 VRE0EN8URGH TOWN
STATE = l: 1 RECORDS
TREASURY
6
0 5 / 2 3/78 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
1 DECATUR CITY
1
FALKtflLLE TOWN
1
HARTSELLE CITY
1
EVA TOWN
1
M A R I O N CITY
1
U M C N T O W N TOWN
1
ALICEVILLE CITY
1
C A R R O L L T O N TOWN
1
G O R D O TOWN
1
R E F O R M TOWN
1
E T H E L S V I u L E TOWN
1
PICKENSVILLE TOWN
1
MC M U L L E N TOWN
1
M E M P H I S TOWN
1
B A N K S TOWN
1
B R U N O I D G E TOWN
1
TROY CITY
1
R C A N O K E CITY
1
* A O L E Y TOW.M
1
W E D O W E E TOWN
1
W O O D L A N D TOWN
1
H U R T S B O R O TOWN
1
P H E N I X CITY
1
B C N AIR TOWN
1
C H l L D E R S i U R G TOWN
1
G A N T T S QUARRY TOWN
1
L I N C O L N TOWN
1
SYLACAUGA CITY
1
TALLADEGA CITY
1
T A L L A D E G A S P R I N G S TOWN
1
ALEXANDER CITY CITY
1
CAMP HILL TOWN
1
D A D E V I L L E TOWN
1
OAVISTON TOWN
1
C A R B O N HILL C I T Y
1
C C R O O V A CITY
1
DCRA TOWN
1
OAKMAN TOWN
1
P A R R I S H TOWN
1
OAK HILL T O W N
1
PINE APPLE TOWN
1
PINE HILL TOWN
1
A O D I S O N TOWN
1
DCUBLE SPRINGS TOWN
1
HALEYVILLE CITY
1
L Y N N TOWN
OF
THE
TREASURY
0 5 / 2 3 / 7 8 AT 31:25
U.S. D E P A R T M E N T OF THE
PAGE
TREASURY
DISTRESSED AREA ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
TITLE
STATE
ARLEY
TOWN
STATE = l:
47
RECORDS
TEST
8
0 5 / 2 3 / 7 8 AT 31 :25
U.S. DEPARTMENT
D I S T R E S S E D AREA
PAGE
OF
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
TITLE
KCDIAK I S L A N D * 0 R 0
TOTAL FOR 3ARR0W
TOTAL FOR K O D I A K
SAXMAN CITY
OLD HARBOR C I T Y
O U Z I N K I E CITY
PORT L I O N S C I T Y
AKHIOK CITY
LARSEN BAY C I T Y
EAGLE CITY
KAKE CITY
SAINT MARYS CITY
AKOLMIUT CITY
MEKORYUK C I T Y
PILOT STATION C I T Y
SCAMMON BAY CITY
SHAKTOOLIK C I T Y
TELLER CITY
W A L E S CITY
AKIAK CITY
D I O M E D E CITY
G C L O V I N CITY
KCYUK CITY
TULUKSAK C I T Y
PORT HEIOEN CITY
ALEKNAGI* CITY
H U G H E S CITY
KCBUK CITY
PORT A L E X A N D E R C I T Y
STATE
= 2:
29
RECORDS
TREASURY
ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE
THE
TEST
05/23/76 AT 31:25
U.S. DEPARTMENT
PAGE 10
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
3 WILLIAMS CITY
3
HAYDEN TOWN
3
AVONDALE CITY
3
TOLLESON CITY
3
GILA BEN3 TOWN
3
SOUTH TUCSON TOWN
3
COOLIDGE CITY
3
MAMMOTH TOWN
3
WELLTON TCWN
STATE = 3: 9 RECORDS
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE 11
OF THE
TREASURY
DISTRESSED AREA ELIGIBILITY
(ELIGIBLE
STATE
4
4
4
4
4
<•
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
TITLE
ASHLEY COU NTY
BRADLEY CO UNTY
CALHOUN CO JNTY
CHICOT COU NTY
CLARK COUN TY
CLAY COUNT Y
CLEVELAND COUNTY
CONWAY COU NTY
OALLAS COU NTY
OESHA COUN TY
FULTON COU NTY
HOT SPRING COUNTY
JACKSON CO UNTY
LAFAYETTE COUNTY
LEE COUNTY
LINCOLN CO UNTY
LITTLE RIV ER COUNTY
LCGAN COUN TY
MADISON CO UNTY
MILLER COU NTY
MISSISSIPP I COUNTY
MONTGOMERY COUNTY
NLVAOA COU NTY
0UACHI1A C OUNTY
PHILLIPS C OUNTY
POINSETT C OUNTY
POLK COUNT Y
PRAIRIE CO UNTY
ST FRANCIS COUNTY
SCOTT COUN TY
SEARCY COU NTY
HAMBURG CI TY
BANKS TCWN
WARREK CIT Y
HAMPTON CI TY
THORNTON T OWN
HARRELL TO WN
TINSMAN CI TY
DERMOTT CI TY
EUOORA CIT Y
LAKE VILLA GE CITY
AMITY CITY
ARKADELPHI A CITY
GURDON CIT Y
OKOLONA TO WN
WHELEN SPR INGS TOWN
GOVERNMENTS)
TEST
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
TITLE
GUM SPRINGS TOWN
CADDO VALLEY TOWN
DATTO TOWN
GREENWAY CITY
KNOBEL TOWN
NIMMONS TCWN
PEACH ORCHARD TOWN
PIGGOTT CITY
POLLARD TOWN
ST FRANCIS CITY
SUCCESS TOWN
MC DOUGAL TOWN
KING SLA NO CITY
RISON CITY
MORRILTON CITY
MENIFEE TOWN
MULBERRY CITY
EARLE CITY
GILMORE TOWN
NCRVELL TOWN
CARTHAGE CITY
SPARKMAN TOWN
ARKANSAS CITY TOWN
DUMAS CITY
MCGEHEE CITY
REED TOWN
MITCHELLVILLE CITY
GUY TOWN
ALTUS CITY
BRANCH CITY
DENNING TOWN
MAMMOTH SPRING TOW
SALEM CITY
VIOLA TOWN
POYEN TOWN
OELAPLAINE TOWN
FRIENDSHIP TOWN
PERLA TOWN
AfAGON TOWN
GRUBBS TOWN
NEWPORT CITY
SWIFTON CITY
TUCKtRMAN CITY
TUPELO TOWN
JACKSONPORT TOWN
WELDON TOWN
PAGE 12
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TLiST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
4 BEEDEVILLE TOWN
4
3 R A 0 L E Y CITY
4
B U C K N E R CITY
4
LEWISVILLE CITY
4
S T A M P S CITY
4
ALICIA TOWN
4
BLACK ROCK C I T Y
4
MINTURN TOWN
4
SEDGWICK T O W N
4
S M I T H V I L L E TOWN
4
LYNN TOWN
4
MARIANNA C I T Y
4
MORO TOWN
4
RONDO TOWN
4
AUBREY TOWN
4
G C U L O CITY
4
GRADY TOWN
4
STAR CITY CITY
4
A S H D O W N CITY
4
F O R E M A N CITY
4
OGDEN TOWN
4
H I L T O N TOWN
4
W I N T H R O P TOWN
4
8LJE M O U N T A I N TOWN
4
BOONEVILLE CITY
4
MAGAZINE TOWN
4
P A R I S CITY
4
RATCLIFF C I T Y
4
S C R A N T O N TOWN
4
S U 3 I A C 0 TOWN
4
C A U L K S V I L L E TOWN
4
ST PAUL TOWN
4
G A R L A N O TOWN
4
F O U K E TOWN
4
TEXARKANA C I T Y
4
JOINER CITY
4
LUXORA TOWN
4
BURDETTE CITY
4
B A S S E T T TOWN
4
CLARENDON CITY
4
MOUNT IDA C I T Y
4
NCRMAN TOWN
4
ODEN TOWN
<• BLACK S P R I N G S TOWN
4
EMMET CITY
4
PRESCOTT CITY
PAGE
OF
THE
TREASURY
13
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. DEPARTMENT
TO< -. c ,.ov
OF THE
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
TITLE
BLUFF CITY
BODCAW TOWN
RCSSTCN TOWN
CALE TOWN
W I L L I S V I L L E TOWN
BEARDEN TOWN
CAMDEN CITY
C H I D E S T E R CITY
LOUANN TOWN
S T E P H E N S CITY
EAST CAMDEN TOWN
CASA TOWN
F C U R C H E TOWN
H O U S T O N TOWN
PERRY TOWN
E L A I N E CITY
HELENA CITY
MARVELL CITY
WEST HELENA CITY
LAKE VIEW TOWN
ANTOINE TCWN
O E L I G H T CITY
MURFREES80R0 CITY
F I S H E R TOWN
HARRISBURG C I T Y
MARKED TREE CITY
TRUMANN CITY
TYRONZA TOWN
WEINER CITY
WALDENBURG TOWN
COVE TOWN
HATFIELD TOWN
MENA CITY
W I C K E S TOWN
VANDERVOORT TOWN
G R A N N I S TOWN
DE V A L L S B L U F F TOWN
H A Z E N CITY
ULM TOWN
B I G G E R S TOWN
F O R R E S T CITY C I T Y
H U G H E S CITY
MADISON CITY
PALESTINE TOWN
W H E A T L E Y TOWN
W I D E N E R TOWN
TREASURY
PAGE
14
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED
AREA
PAGE
OF THE
ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE
4
4
4
4
4
4
4
4
4
4
4
<•
4
4
4
TITLE
C A L O W E L L TOWN
W A L D R O N CITY
G I L B E R T TOWN
HACKETT CITY
HUNTINGTON C I T Y
E V E N I N G S H * D E TOWN
SIDNEY TOWN
G R I F F I T H V I L L E TOWN
HIGGINSCN TOWN
JUDSONIA CITY
RUSSELL TOWN
WEST POINT TOWN
GARNER TOWN
C O T T O N PLANT C I T Y
PATTERSON TOWN
STATE
= 4:
199
RECORDS
TREASURY
TEST
15
05/23/78
AT 31:25
U.S. DEPARTMENT
OF THE
DISTRESSED AREA ELIGIBILITY TE1ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
5 ALAMEDA COUNTY
5
CCLUSA COUNTY
5
KINGS COUNTY
5
LASSEN COUNTY
5
LOS ANGELES COUNTY
5
SAN BERNARDINO COUNTY
5
YUBA COUNTY
5
ALBANY CITY
5
BERKELEY CITY
5
HAYWARO CITY
5
OAKLAND CITY
5
PIEDMONT CITY
5
I ONE CITY
5
GRIDLEY CITY
5
WILLIAMS CITY
5
HERCULES TOWN
5
PITTSBURG CITY
5
RICHMOND CITY
5
SAN PA3L0 CITY
5
CLAYTON CITY
5
LAFAYETTE CITY
5
SANGER CITY
5
RIO DELL CITY
5
BRAWLEY CITY
5
IMPERIAL CITY
5
MARICOPA CITY
5
TEHACHAPI CITY
5
MCFARLAND CITY
5
ALHAMBRA CITY
5
AZUSA CITY
5
BALDWIN PARK CITY
5
BELL CITY
5
BURBANK CITY
5
CCMPTON CITY
5
EL MONTE CITY
5
EL SEGUNDO CITY
5
GARDENA CITY
5
HAWTHORNE CITY
5
HUNTINGTON PARK CITY
5
INGLEWOOD CITY
5
LAKEWOOD CITY
5
LA PUENTE CITY
5
LCNG BEACH CITY
5
LOS ANGELES CITY
5
LYNWOOD CITY
5
MAYWOOD CITY
TREASURY
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
PAGE
OF
DISTRESSED AREA ELIGIBILITY TEtST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
5 MONROVIA CITY
5
PALOS VERDES ESTATES CTY
5
POMONA CITY
5
SAN F E R N A N D O C I T Y
5
SAN GABRIEL CITY
5
SAN MARINO C I T Y
5
SIERRA M ^ D R E C I T Y
5
SIGNAL HILL CITY
5
S C U T H GATE C I T Y
5
SCUTH P A S A D E N A C I T Y
5
VERNON CITY
5
BELLFLOWER CITY
5
BRADBURY C I T Y
5
D U A R T E CITY
5
INDUSTRY C 1 T Y
5
IRWINDALE C I T Y
5
NORwALK CITY
5
PARAMOUNT C I T Y
5
PICO RIVERA CITY
5
SANTA fL S P R I N G S C I T Y
5
SOUTH EL M O N T E C I T Y
5
WALNUT CITY
5
ARTESIA CITY
5
CCMMERCE CITY
5
LAWNDALE CITY
5
ROLLING HILLS CITY
5
BELL G A R D E N S C I T Y
5
C U D A H Y CITY
5
LA MIRADA C I T Y
5
RGSErfEAD C I T Y
5
L A N C A S T E R CITY
5
HAWAIIAN G A R D E N S
5
HIDDEN H I L L S C I T Y
5
L C M I T A CITY
5
PALMOALE CITY
5
C A R S O N CITY
5
LA CANADA F L I N T R I D G E C I T Y
5
S E A S I D E CITY
5
MARINA CITY
5
NEVADA CITY CITY
5
C C L F A X CITY
5
BANNING CITY
5
BEAUMONT CITY
5
8LYTHE CITY
5
CCACHELLA C I T Y
5
SACRAMENTO C I T Y
266-274 O - 78 - 6
THE
TREASURY
17
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U . S . D E P A R T M E N T OF THE
DISTRESSED
P A G E 18
TREASURY
AREA E L I G I B I L I T Y
(ELIGIBLE GOVERNMENTS)
STATE TITLE
5 SAN JUAN BAUTISTA CITY
5
B A R S T O W CITY
5
C O L T O N CITY
5
O N T A R I O CITY
5
SAN B E R N A R O I N O C I T Y
5
KONTCLAIR CITY
5
R A N C H C C U C A M O N G A CITY
5
AOELANTO CITY
5
IMPERIAL BEACH CITY
5
NATIONAL CITY CITY
5
SAN F R A N C I S C O C I T Y
5
L O M P O C CITY
5
S A N T A MARIA CITY
5
LCYALTUN CITY
5
D C R R I S TOWN
5
W E E D CITY
5
V A L L E J O CITY
5
N E W M A N CITY
5
*ATERFQRD CITY
5
LIVE OAK C I T Y
5
SANTA PAULA CITY
5
WHEATLANO CITY
ST ATE =5: 114 RECORDS
TEST
05/23/78 AT 01:25
U.S. DEPARTMENT
DISTRESSED
PAGE 19
OF THE
AREA ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE
6
6
6
6
6
6
6
6
6
6
6
6
6
6
b
6
6
6
6
6
6
b
6
6
6
6
6
b
6
b
TITLE
CONEJOS COUNTY
CROWLEY COUNTY
DCLORES COUNTY
HUERFANO COUNTY
LAS ANIMAS COUNTY
MINERAL COUNTY
OTERO COUNTY
ArUQNITO TOWN
LA JARA TOWN
ROMEO TOWN
SANFORD TOWN
SAN LUIS TOWN
SUGAR CITY TOWN
LA VETA TOWN
WALSEN8URG CITY
AGUILAR TOWN
COKEOALE TOWN
STARKVILLE TOWN
TRINIDAD CITY
KIM TOWN
CREEDE TOWN
NUCLA TOWN
CHERAW TOWN
FCWLER TOWN
LA JUNTA CITY
MANZANOLA TOWN
ROCKY FORD CITY
SWINK TOWN
RYE TOWN
BOONE TOWN
STATE = 6:
TREASURY
30 RECORDS
TEST
0 5 / 2 3 / 7 8 AT 0 1 : 2 5
U*S. DEPARTMENT
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
BRIDGEPORT CITY
B R I S T O L CITY
HARTFORD CITY
NEW BRITAIN C I T Y
BANTAM B O R O U G H
LITCHFIELD BOROUGH
TORRINGTON CITY
MIODLETOWN CITY
ANSGNIA CITY
DERBY CITY
MERIOEN CITY
NAUGATUC* B O R O U G H
NEW HAVEN CITY
WATEReURY CITY
M I L F O R D CITY
WEST HAVEN C I T Y
WCODMONT BOROUGH
JEwETT CITY B O R O U G H
NORWICH CITY
OANIELSCN 30ROUGH
PUTNAM CITY
W I L L I M A N T I C CITY
STRATFORD TOWN
EAST H A R T F O R D TOWN
H A R T L A N D TOWN
P L A I N V I L L E TOWN
W E T H E R S F I E L D TOWN
B A R K H A M S T E D TOWN
CANAAN TOWN
C C L E 3 R 0 C K TOWN
G C S H E N TOWN
H A R W I N T O N TOWN
L I T C H F I E L D TOWN
MORRIS TOWN
NCRFOLK TOWN
NCRTH CANAAN TOWN
PLYMOUTH TOWN
SALISBURY TOWN
S H A R O N TOWN
T H O M A S T O N TOWN
WATERTOWN TOWN
W I N C H E S T E R TOWN
C L I N T O N TOWN
M I D D L E F I E L D TOWN
P C R T L A N D TOWN
B R A N F O R D TOWN
OF
THE
_
TREASURY
P A G £
Z0
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
7 EAST HAVEN TOWN
7
HAMDEN TOWN
7
MADISON TCWN
7
NCRTH BRANFORD TOWN
7
NORTH HAVEN TOWN
7
ORANGE TOWN
7
OXFORD TOWN
7
SEYMOUR TOWN
7
BLZRAH TOWN
7
F R A N K L I N TOWN
7
GRISWOLD TOWN
7
L I S B O N TOWN
7
SPRAGUE TOWN
7
VOLUNTOWN TOWN
7
B R O O K L Y N TOWN
7
CANTERBURY TOWN
7
C H A P L I N TOWN
7
E A S T F O R D TOWN
7
KILLINGLY TOWN
7
PLAINFIELO TOWN
7
POMFRET TCWN
7
PUTNAM TOWN
7
SCOTLAND TOWN
7
STERLING TOWN
7
T H O M P S O N TOWN
7
WINDHAM TOWN
STATE = 7: 72 RECORDS
P A G E 21
OF
THE
TREASURY
PAGE 22
05/23/78 AT 31:25
U.S. DEPARTMENT
TorA<;iiPY
OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TE'ST
(ELIGIBLE GOVERNMENTS)
STATE
8
8
8
8
8
8
8
8
8
d
8
8
8
8
6
6
8
6
TITLE
NEW CASTLE COUNTY
BOWERS TOWN
FELTON TOWN
HARRINGTON CITY
HARTLY TOWN
HOUSTON TOWN
KENTON TOWN
LEIPSIC TOWN
LITTLE CREEK TOWN
WYOMING TOWN
BELLEFONTE TOWN
ELSMERE TOWN
MIDDLETOWN TOWN
NEW CASTLE CITY
NEWPORT TOWN
ODESSA TOWN
WILMINGTON CITY
ARDENTOWN VILLAGE
STATE = 3:
18
RECORDS
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
10 BREVARD COUNTY
10
DE SOTO C O U N T Y
10
FRANKLIN COUNTY
10
GAOSDEN COUNTY
10
GULF COUNTY
10
HIGHLANDS COUNTY
10
LAFAYETTE C O U N T Y
10
LIBERTY C O U N T Y
10
MADISON COUNTY
10
PUTNAM COUNTY
10
TAYLOR COUNTY
10
COCOA CITY
10
COCOA 3EACH CITY
10
MELBOURNE CITY
10
RCCKLEDGE CITY
10
TITUSVILLE C I T Y
10
MELBOURNE V I L L A G E TOWN
10
SATELLITE BEACH TOWN
10
W MELBOURNE TCWN
10
IhDIAN H A R B O U R
10
CAPE CANAVERAL C I T Y
10
PALM SHORES TOWN
10
ISLANDIA C I T Y
10
ARCADIA CITY
10
APALACHICOLAi C I T Y
10
CARRABELLE C I T Y
10
C H A T T A H O O C H E E CITY
10
G R E E N S G O R O TOWN
10
GRETNA TOWN
10
HAVANA TOWN
10
OUINCY CITY
10
PORT ST JOE TOWN
10
WEWAHITCHKA CITY
10
WARD RIDGE C I T Y
10
AVON PARK CITY
10
PLANT CITY C I T Y
10
MCNTICELLO C I T Y
10
MAYO TOWN
10
CLERMONT CITY
10
GROVELAND CITY
10
LADY LAKE TOWN
10
MASCOTTE C I T Y
10
MINNEOLA TOWN
10
BRISTOL CITY
10
GREENVILLE TOWN
10
LEE TOWN
PAGE
OF THE
TREASURY
23
P A G E 24
05/23/78
^'DEPARTMENT
OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
TITLE
MAOISON CITY
KEY WEST C I T Y
CRESTVIEW CITY
EATONVILLE TOWN
OAKLAND TOWN
LAKE BUENA VISTA CITY
BELLE GLADE CITY
PAHOKEE CITY
ST LEO TOWN
SAN ANTONIO CITY
FROSTPROOF C I T Y
C R E S C E N T C I T Y CITY
IINTERLACHEN TOWN
PALATKA CITY
POMONA PARK TOWN
HASTINGS TOWN
FORT PIERCE CITY
ST LUCIE V I L L A G E
PERRY CITY
WASAU TOWN
S T A T E = 10:
66
RECORDS
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TE'ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
11 ATKINSON COUNTY
11
BAKER COUNTY
11
BANKS COUNTY
11
BARROW C O U N T Y
11
BIBB COUNTY
11
BLECKLEY COUNTY
11
BRANTLEY C O U N T Y
11
BROOKS COUNTY
11
BPYAN COUNTY
11
BURKE COUNTY
11
CALHOUN COUNTY
11
CHATHAM C O U N T Y
11
CHATTAHOOCHEE COUNTY
11
CHATTOOGA C O U N T Y
11
CLAY COUNTY
11
CLINCH COUNTY
11
CCLOUITT COUNTY
11
COOK COUNTY
11
COWETA C O U N T Y
11
CRAWFORD C O U N T Y
11
DAWSON COUNTY
11
DCDGE COUNTY
11
OCOLY COUNTY
11
DOUGHERTY COUNTY
11
EARLY COUNTY
11
EFFINGHAM C O U N T Y
11
F A N N I N COUNTY
11
F L O Y D COUNTY
11
GLASCOCK COUNTY
11
GRADY COUNTY
11
G R E E N E COUNTY
11
HALL CCUNTY
11
HANCOCK C O U N T Y
11
HART COUNTY
11
JEFFERSON COUNTY
11
J E N K I N S COUNTY
11
JONES COUNTY
11
LAURENS COUNTY
11
LCNG COUNTY
11
MCINTOSH C O U N T Y
11
MACON COUNTY
11
MERIWETHER C O U N T Y
11
MITCHELL COUNTY
11
MCNTGCMERY C O U N T Y
11
OGLETHORPE C O U N T Y
11
PIERCE C O U N T Y
PAGE
OF
THE
TREASURY
25
,*. o C
05/23/78 *J
»«»
PAGE
M R T H E M I
of THE T R E A S U R Y
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
11 POLK COUNTY
11
PULASKI COUNTY
U
PUTNAM COUNTY
11
QUITMAN COUNTY
11
RANDOLPH C O U N T Y
11
SCHLEY COUNTY
11
STEWART COUNTY
11
SUMTER COUNTY
11
TALBOT COUNTY
11
TALIAFERRO C O U N T Y
11
TELFAIR COUNTY
11
TERRELL COUNTY
11
TREUTLEN C O U N T Y
11
TROUP COUNTY
11
TURNER COUNTY
11
T W I G G S COUNTY
11
UPSON COUNTY
11
WARE COUNTY
11
WAYNE COUNTY
11
WHEELER COUNTY
11
WILCOX COUNTY
11
W I L K E S COUNTY
11
PEARSON CITY
11
KlLLACQOCHEE TOWN
11
NEWTON CITY
11
HOMER TOrfN
11
AUBURN TOWN
11
BETHLEHEM TOWN
11
CARL TOWN
11
RUSSELL CITY
11
STATHAM TOWN
11
WINDER CITY
11
EMERSON CITY
11
WHITE TCWN
11
FITZGERALD CITY
11
NASHVILLE CITY
11
MACON CITY
11
PAYNE CITY
11
COCHRAN CITY
11
HOBOKEN CITY
U
MORVEN TOWN
11
QUITMAN CITY
11
PEMBROKE C I T Y
11
GIRARD VILLAGE
11
MIOVILLE CITY
11
SARDIS TOWN
26
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE 27
OF THE
DISTRESSED AREA ELIGIBILITY TEST .
(ELIGIBLE GOVERNMENTS)
STATE TITLE
11 WAYNESBORO CITY
11
LEARY TOWN
11
MORGAN CITY
11
GARDEN CITY TOWN
11
SAVANNAH CITY
11
THUNDERBOLT TOWN
11
CUSSETA TOWN
11
LYERLY TOWN
11
MENLO TOWN
11
SUMMERVILLE CITY
11
TRION TOWN
11
BLUFFTON TOWN
11
FORT GAINES CITY
11
DU PONT TOWN
11
DOUGLAS CITY
11
NICHOLLS CITY
11
OOERUN CI1Y
11
ELLENTON TOWN
11
FUNSTON TOWN
11
MOULTRIE CITY
11
NORMAN PARK TOWN
11
GROVETOWN CITY
11
ACEL CITY
11
CECIL TCWN
11 LENOX TCWN
11
SPARKS TOWN
11
GRANTVILLE CITY
11
HARALSON TOWN
11
MORELAND TOWN
11
NEWNAM CITY
11
SENOIA CITY
11
SHARPSbURG TOWN
11
TURIN TOWN
11
ROBERTA CITY
11
ARABI TCWN
11
CCRDELE CITY
U
DAWSONVILLE TOWN
11
CHAUNCEY TOWN
11
CHESTER TOWN
11
U M D I L L A TOWN
11
ALBANY CITY
11
8LAKELY CITY
11
DAMASCUS TOWN
11
GUYTON CITY
11
RINCON TOWN
11
NUNEZ TOWN
TREASURY
05/23/78 AT 31:25
U.S. D E P A R T M E N T OF THE T R E A S U R Y
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
11 STILLMORE TOWN
11 SWAINSBORO C I T Y
11 SUMMERTOrfN C I T Y
11 MCCAYSVILLE CITY
11 MORGANTON TOWN
11 CAVE SPRING CITY
11
ROME CITY
11 LAVONIA CITY
11 ATLANTA CITY
11
MITCHELL TOWN
11 FAIRMOUNT CITY
11 CAIRO CITY
11 WHIGHAM CITY
11 GREENSBORO C I T Y
11 UNION POINT TOWN
11 CCRNELIA CITY
11 CLERMONT TOWN
11 SPARTA CITY
11 TALLAPOOSA CITY
11 90WERSVILLE TOWN
11 HARTWELL C I T Y
11 PERRY CITY
11 OCILLA CITY
11 COMMERCE CITY
11 JEFFERSON CITY
11
NICHOLSON TOWN
11
AVERA TOWN
11 BARTOW TOWN
11 LCUISVILLE C I T Y
11
STAPLETON TOWN
11 WAOLEY TOWN
11 WRENS TOWN
11 MILLEN CITY
11 GRAY CITY
11 ALDCRA TOWN
11 BARNESVILLE CITY
11 CADWELL TOWN
11 DUBLIN CITY
11 MCNTROSE TOWN
11 RENTZ TOWN
11
RICEBORO C I T Y
11 L U D O W I C I CITY
11 OAHLONEGA CITY
11
OARIEN
MIDEAL
A R S H A LTOWN
LCITY
V I L L E CITY
PAGE
-8
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
11 MONTEZUMA CITY
11
OGLETHORPE CITY
11
GAY TOWN
11
GREENVILLE CITY
11
L O N E OAK C I T Y
11
LUTHERSVILLE TOWN
11
WARM S P R I N G S C I T Y
11
WOODBURY CITY
11
BACONTON CITY
11
C A M I L L A CITY
11
PELHAM CITY
11
SALE CITY C I T Y
11
A L S T O N TOWN
11
MOUNT VERNON C I T Y
11
T A R R Y T O W N TOWN
11
HIGGSTON CITY
11
BIBB CITY TOWN
11
COLUMBUS CITY
11
B I S H O P TOWN
11
NORTH HIGH S H O A L S TOWN
11
W A T K I N S V I L L E TOWN
11
LEXINGTON CITY
11
MAXEYS TOWN
11
ARNOLDSVILLE TOWN
11
BLACKSHEAR CITY
11
P A T T E R S O N TOWN
11
ROCKMART CITY
11
CEDARTOWN CITY
11
ARAGON CITY
11
VAN WERT T O W N
11
HAWKINSVILLE CITY
11
EATONTON CITY
11
G E O R G E T O W N TOWN
11
C L A Y T O N CITY
11
M C U N T A I N C I T Y TOWN
11
TIGER TOWN
11
CUTHBERT CITY
11
SHELLMAN CITY
11
ELLAVILLE CITY
11
G R I F F I N CITY
11
M A R T I N TOWN
11
T O C C O A CITY
11
L U M P K I N CITY
11
RICHLAND CITY
11
OMAHA CITY
11
AMERICUS CITY
PAGE
OF THE
TREASURY
29
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
P A G E
OF THE
DISTRESSED AREA ELIGIBILITY TE»ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
AKDERSCNVILLE CITY
OE SOTO VILLAGE
LESLIE VILLAGE
PLAINS TOWN
GENEVA TOWN
JUNCTION C I T Y TOWN
TALBOTTON CI TY
WOODLAND C I T Y
C R A W F O R D V I L L E CITY
SHARON CITY
HELENA TOWN
JACKSONVILLE TOWN
LUMBER CITY
MCRAE CITY
BRONWOOO TOWN
DAWSON CITY
PARROTT TOWN
THOMASVILLE CITY
L Y O N S CITY
SCPERTON CITY
HOGANSVILLE CITY
LA GRANGE CITY
ASHBURN CITY
REBECCA TOWN
SYCAMORE CITY
JEFFERSCNVILLE C I T Y
THE ROCK TOWN
YATESVILLE TOWN
WAYCROSS CITY
JESUP CITY
ODUM TOWN
SCREVEN CITY
G L E N W O G D CITY
HELEN TOWN
ABBEVILLE CITY
PINEVIEW TOWN
P I T T S CITY
ROCHELLE CITY
TIGNALL TOWN
RAYLE CITY
STATE = 11: 270 RECORDS
TREASURY
50
05/23/78
AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED
AREA
(ELIGIBLE GOVERNMENTS)
STATE TITLE
13 CLEARWATER COUNTY
13
FRANKLIN COUNTY
13
GEM COUNTY
13
ONEIDA C O U N T Y
13
SHOSHONE COUNTY
li
BLOOMINGTON VILLAGE
13
P A R I S CITY
13
ST C H A R L E S V I L L A G E
13
P L A C E R V I L L E CITY
13
S A N D P C I N T CITY
13
MCYIE S P R I N G S CITY
13
SPENCER VILLAGE
13
ELK RIVER V I L L A G E
13
O R O F I N O CITY
13
PIERCE CITY
13
W E I P P E CITY
13
L C S T RIVER V I L L A G E
13
CLAYTON VILLAGE
13
CLIFTON VILLAGE
13
DAYTON V I L L A G E
13
F R A N K L I N CITY
13
OXFORD VILLAGE
13
P R E S T O N CITY
13
EMMETT CITY
13
KOOSKIA CITY
13
STITES VILLAGE
13
WHITE BIRD C I T Y
13
ROBERTS VILLAGE
13
DIETRICH VILLAGE
13
SHOSHONE CITY
13
MALAO CITY
13
K E L L O G G CITY
13
MULLAN CITY
13
0S8URN CITY
13
SMELTERVILLE CITY
13
W A L L A C E CITY
13
WARDNER CITY
13
PINEHURST CITY
STATE = 13: 38 RECORDS
PAGE
OF THE
TREASURY
ELIGIBILITY
TEST
31
05/23/78
AT
31:25
U.S-
DEPARTMENT
OF THE
OISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
TITLE
14
ALEXANDER COUNTY
14
BOND COUNTY
14
CALHOUN COUNTY
14
CARROLL COUNTY
14
CASS COUNTY
14
CLAY COUNTY
!<• F A Y E T T E C U U N T Y
14
FORD COUNTY
14
FULTON COUNTY
14
GALLATIN COUNTY
14
GREENE COUNTY
14
HAMILTON COUNTY
14
HARDIN COUNTY
14
IROQUOIS COUNTY
14
JERSEY COUNTY
14
JO D A V I E S S C O U N T Y
14
KANKAKEE COUNTY
14
KNOX C O U N T Y
14
LA S A L L E C O U N T Y
14
LCGAN COUNTY
14
MADISON COUNTY
14
MASSAC COUNTY
14
MONROE COUNTY
14
MCNTGOMERY COUNTY
14
PERRY COUNTY
14
PIKE C O U N T Y
14
POPE C O U N T Y
14
PULASKI COUNTY
14
RICHLAND COUNTY
14
ST C L A I R C O U N T Y
14
SHELBY COUNTY
14
UNION COUNTY
14
VERMILION COUNTY
14
WARREN C O U N T Y
14
WAYNE COUNTY
14
WHITE COUNTY
14
WILLIAMSON COUNTY
14
WINNEBAGO COUNTY
14
LA P R A I R I E V I L L A G E
14
LIMA V I L L A G E
14
O U I N C Y CITY
14
C A I R O CITY
14
TAMMS VILLAGE
14
THEBES VILLAGE
14
E A S T CAPE G I R A R D E A U
14
GREENVILLE CITY
VILLAGE
TREASURY
PAGE
32
P A G E 33
0 5 / 2 3 / 7 6 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED
AREA
(ELIGIBLE
STATE
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
OF THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TITLE
M U L B E R R Y GRO VE V I L L A G E
OLD RIPLEY V ILLAGE
P O C A H O N T A S V ILLAGE
S M I T H B O R G VI L L A G E
S C R E N T O VILL AGE
C A P R O N VILLA GE
PCPLAR G R O V E V I L L A G E
RIPLEY VILLA GE
BUOA V I L L A G E
DEPUE VILLAG E
BATCHTOWN VI L L A G E
B R U S S E L S VIL LAGE
HAMBURG VILL AGE
H A R D I N VILLA GE
K A M P S V I L L E V ILLAGE
LANARK CITY
MT CARROLL C ITY
SAVANNA CITY
SHANNON V I L L AGE
ARENZVILLE V ILLAGE
A S H L A N D VILL AGE
BEARDSTOWN C ITY
CHANDLERVILL E VILLAGE
VIRGINIA CIT Y
RANTOUL VILL AGE
UR3ANA CITY
TCVEY VILLAG E
PANA CITY
CLAY CITY VI LLAGE
FLORA CITY
IOLA V I L L A G E
L O U I S V I L L E V ILLAGE
S A I L O R SPRIN GS V I L L A G E
XENIA VILLAG E
B A R T E L S O VIL LA3E
BECKEMEYER V ILLAGE
DAMIANSVILLE VILLAGE
B E L L W O O O VIL LAGE
BRIDGEVIEW V ILLAGE
BROADVIEW VI L L A G E
C H I C A G O CITY
C H I C A G O HGHT S CITY
C I C E R O TOWN
HARVEY CITY
LEMONT VILLA GE
MCCOOK VILLA GE
TEST
05/23/78 A ^ n : ^ ^ ^ ^ ^
Qf
DISTRESSED AREA ELIGIBILITY TEST
(ELIGI8LE GOVERNMENTS)
STATE TITLE
14 MARKHAM CITY
14
HAYWOOD VILLAGE
14
M E L R O S E PARK V I L L A G E
14
MIDLOTHIAN VILLAGE
14
ROBBINS VILLAGE
14
RCSEMONT VILLAGE
14
SCHILLER PARK VILLAGE
14
SOUTH CHICAGC H G H T S VILL
14
STONE PARK V I L L A G E
14
SUMMIT V I L L A G E
14
BURBANK CITY
14
PALESTINE VILLAGE
14
DE K A L 8 CITY
14
MALTA V I L L A G E
14
GARRETT VILLAGE
14
HINDSBORO VILLAGE
14
BINGHAM VILLAGE
14
BROWNSTOWN VILLAGE
14
FARINA V I L L A G E
14
RAMSEY V I L L A G E
14
ST ELMO CITY
14
ST PETER V I L L A G E
14
VANDALIA C I T Y
14
BUCKNER VILLAGE
14
HANAFOPD VILLAGE
14
NORTH CITY V I L L A G E
14
O R I E N T CITY
14
S E S S E R CITY
14
VALIER V I L L A G E
14
WEST F R A N K F O R T C I T Y
14
ZEIGLER CITY
14
ASTORIA TCWN
14
AVON V I L L A G E
14
BANNER V I L L A G E
14
BRYANT V I L L A G E
14
CANTON CITY
14
CUBA CITY
14
DUNFERMLINE VILLAGE
14
ELLISVILLE VILLAGE
14
FARMINGTON CITY
14
IPAVA V I L L A G E
14
LEWISTOWN CITY
14
LONDON MILLS VILLAGE
14
MARIETTA V I L L A G E
14
NCRRIS VILLAGE
14
ST D A V I D V I L L A G E
^
TR£ASJRY
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED
AREA
(ELIGIBLE
STATE
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
PAGE
OF
THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TITLE
TABLE GROVE V I L L A G E
VERMONT VILLAGE
EQUALITY VILLAGE
JUNCTION VILLAGE
NEW HAVEN V I L L A G E
OLD S H A W N E E T C W N V I L L A G E
OMAHA V I L L \ G E
RIOGWAY V I L L A G E
S H A W N E E T O W N CITY
CARROLLTON CITY
ELORED VILLAGE
GREENFIELD CITY
HILLVIEW VILLAGE
KANE V I L L A G E
WILMINGTON VILLAGE
ROCKBRIDGE VILLAGE
R C O O H O U S E CITY
WHITE HALL C I T Y
BRACEVILLE VILLAGE
C A R B O N HILL T I L L A G E
SO W I L M I N G T O N V I L L A G E
B E L L E PRAIRIE CITY TOWN
BROUGHTON VILLAGE
MACEDONIA V I L L A G E
M C L E A N S B O R C CITY
BASCO VILLAGE
8 E N T L Y TOWN
PCNTQOSUC VILLAGE
CAVE IN ROCK V I L L A G E
ELIZABETHTOWN VILLAGE
ROSICLARE CITY
LOKAX V I L L A G E
PAPINEAU VILLAGE
WOOOLAWN V I L L A G E
FIDELITY VILLAGE
G R A F T O N CITY
J E R S E Y V I L L E CITY
O T T E R V I L L E TOWN
APPLE RIVER V I L L A G E
ELIZABETH VILLAGE
HANOVER VILLAGE
NCRA V I L L A G E
STOCKTON VILLAGE
BELKNAP VILLAGE
CYPRESS VILLAGE
SIMPSON V I L L A G E
TE»ST
35
° ^ / 2 3 / 7 8 AT 3 l : ? s
"•^DEPARTMENT OF THE TREASURY ''" "
DISTRESSED AREA ELIGIBILITY TEST
ELIGIBLE GOVERNMENTS)
STATE
Jj .
*
J
}4
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
iU
14
TITLE
NCRTH AURORA VILLAGE
PINGREE GROVE VILLAGE
AROMA PARK V I L L A G E
BCURBONNAIS VILLAGE
BRADLEY VILLAGE
ESSEX VILLAGE
G R A N T PARK V I L L A G E
IRWIN V I L L A G E
KANKAKEE CITY
MANTENO VILLAGE
M C M E N C E CITY
ST ANNE V I L L A G E
U N I O N HILL V I L L A G E
PEMBROKE VILLAGE
ALTONA V I L L A G E
E GALESBURG VILLAGE
GALESBUKG CITY
MACUON V I L L A G E
ST A U G U S T I N E V I L L A G E
VICTORIA VILLAGE
WILLIAMSFIELD VILLAGE
fATES CITY V I L L A G E
DANA V I L L A G E
EARLVILLE CITY
G R A N O RIDGE V I L L A G E
KANGLEY VILLAGE
LA SALLE C I T Y
LELAND VILLAGE
LEONORE VILLAGE
LOSTANT VILLAGE
MARSEILLES CITY
MENDOTA CITY
NAPLATE VILLAGE
O G L E S B Y CITY
OTTAWA CITY
PERU CITY
RANSOM VILLAGE
RUTLAND VILLAGE
TCNICA V I L L A G E
TROY GROVE V I L L A G E
D I X O N CITY
SAUNEMIN VILLAGE
ATLANTA CITY
BROADWELL V I L L A G E
ELK HART C I T Y TOWN
EMOEN VILLAGE
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED
AREA
(ELIGIBLE
STATE
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
TITLE
HARTSBURi V I L L A G E
LATHAM VILLAGE
LINCOLN CITY
MIDDLETOWN V I L L A G E
MT PULASKI C I T Y
NEW HOLLAND VILLAGE
CCLCHESTER C I T Y
SCIOTA VILLAGE
TENNESSEE VILLAGE
DECATUR CITY
OREANA VILLAGE
BENLD CITY
EAGERVILLE V I L L A G E
HETTICK VILLAGE
MCUNT OLIVE CITY
NILWOOD VILLAGE
SCOTTVILLE VILLAGE
STANOARD CITY V I L L A G E
WHITE CITY V I L L A G E
WILSONVILLE VILLAGE
ALHAMBRA VILLAGE
ALTON CITY
BETHALTO VILLAGE
EAST ALTON VILLAGE
GRANITE CITY
GRANTFORK V I L L A G E
HAMEL VILLAGE
HARTFORD VILLAGE
HIGHLAND CITY
LIVINGSTON V I L L A G E
MAOISON CITY
MARINE VILLAGE
NEW DOUGLAS VILLAGE
ROXANA VILLAGE
TROY CITY
VENICE CITY
WILLIAMSON V I L L A G E
WCOD RIVER CITY
WCRDEN VILLAGE
PCNTOON BEACH V I L L A G E
SOUTH ROXANA V I L L A G E
JUNCTION C I T Y V I L L A G E
KELL VILLAGE
ODIN VILLAGE
WALNUT HILL VILLAGE
BROOKPORT CITY
PAGE
OF
THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TEST
37
0 5 / 2 3 / 7 6 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
TITLE
JOPPA V I L L A G E
METROPOLIS CITY
COLUMBIA C I T Y
FULTS VILLAGE
MAEYSTOWN V I L L A G E
WATERLOO C I T Y
BUTLER V I L L A G E
CCALTON VILLAGE
DCNNELLSON VILLAGE
FARMERSVILLE VILLAGE
FILLMORE VILLAGE
HILLSBORO C I T Y
IRVING V I L L A G E
LITCHFIELD CITY
N C K O M I S CITY
RAYMOND VILLAGE
SCHRAM CITY V I L L A G E
TAYLOR S P R I N G S V I L L A G E
WAGGONER VILLAGE
WITT CITY
OHLMAN VILLAGE
JACKSONVILLE CITY
WCODSON V I L L A G E
ADELINE VILLAGE
CRESTON VILLAGE
BARTONVILLE VILLAGE
BRIMFIELD VILLAGE
CUTLER V I L L A G E
QU QUOIN C I T Y
P I N C K N E Y V I L L E CITY
ST JOHNS V I L L A G E
TAMAROA V I L L A G E
BAYLIS VILLAGE
DETROIT VILLAGE
EL DARA V I L L A G E
FLORENCE VILLAGE
G R I G G S V I L L E CITY
HULL V I L L A G E
KINDERHOOK VILLAGE
MILTON V I L L A G E
NEBO V I L L A G E
NEW CANTON TOWN
NEW SALEM TOWN
PEARL V I L L A G E
PERRY V I L L A G E
PITTSFIELD CITY
PAGE
OF
THE
TREASURY
38
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
OF
DISTRESSED AREA ELIGIBILITY TE»ST
(ELIGIBLE GOVERNMENTS)
STATE
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
TITLE
PLEASANT HILL VILLAGE
TIME V I L L A G E
V A L L E Y CITY V I L L A G E
EDDYVILLE VILLAGE
GOLCONUA CITY
HAMLETSBURG VILLAGE
NEW GRAND C H A I N V I L L A G E
KARNAK V I L L A G E
M O U N D CITY C I T Y
M O U N D CITY
OLMSTEAD VILLAGE
PULASKI VILLAGE
ULLIN VILLAGE
MAGNOLIA T O W N
CALHOUN VILLAGE
CLAREMONT VILLAGE
NCBLE VILLAGE
O L N E Y CITY
PARKERSBURG VILLAGE
BROOKLYN VILLAGE
EAST ST L O U I S C I T Y
FAIRMONT CITY VILLAGE
FAYETTEVILLE VILLAGE
L E B A N O N CITY
NATIONAL CITY VILLAGE
ST LIBGRY V I L L A G E
SWANSEA V I L L A G E
WASHINGTON PARK VILLAGE
FAIRVIEW H E I G H T S CITY
CARRIER MILLS VILLAGE
ELDORADO CITY
HARRIS3URG CITY
EXETER V I L L A G E
CCWDEN VILLAGE
FINDLAY VILLAGE
HERRICK VILLAGE
MCWEAQUA VILLAGE
OCONEE VILLAGE
S H E L B Y V I L L E CITY
S I G E L TOWN
STEWARDSON VILLAGE
STRASBUR3 VILLAGE
TOWER HILL V I L L A G E
RIDOTT V I L L A G E
WINSLOW V I L L A G E
ALTO PASS V I L L A G E
THE
TREASURY
PAGE
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. DEPARTMENT
DISTRESSED
AREA
(ELIGIBLE
STATE
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
OF THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TITLE
ANNA CITY
CC30EN VILLAGE
DCNGOLA V I L L A G E
JCNESBORO CITY
MILL CREEK V I L L A G E
ALLERTON VILLAGE
BELGIUM VILLAGE
DANVILLE CITY
FITHIAN VILLAGE
GEORGETOWN C I T Y
H L O P E S T G N CITY
IKDIANOLA V I L L A G E
MUNCIE VILLAGE
POTOMAC V I L L A G E
RANKIN V I L L A G E
ROSSVILLE V I L L A G E
SIDELL V I L L A G E
TILTON VILLAGE
WESTVILLE VILLAGE
LITTLE YORK V I L L A G E
MONMOUTH CITY
ROSEVILLE V I L L A G E
RAOOM V I L L A G E
CISNE VILLAGE
FAIRFIELD CITY
JEFFEPSONVILLE VILLAGE
JOHNSONVILLE VILLAGE
MT E R I E V I L L A G E
S I M S VILLAGE
WAYNE CITY V I L L A G E
KEENES VILLAGE
BURNT P R A I R I E V I L L A G E
CARMI CITY
CROSSVILLE VILLAGE
ENFIELD VILLAGE
MAUNIE V I L L A G E
MILL S H C A L S V I L L A G E
SPRINGERTON VILLAGE
PHILLIPSTOWN VILLAGE
LYNDON VILLAGE
BUSH V I L L A G E
CAMBRIA VILLAGE
C A R T E R V I L L E CITY
COLP VILLAGE
CRAINVILLE VILLAGE
C R E A L S P R I N G S CITY
TEST
40
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED
AREA
PAGE
OF
TREASURY
ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE TITLE
14 ENERGY VILLAGE
14
H E R R I N CITY
14
HURST CITY
14
J O H N S T O N C I T Y CITY
14
MARION CITY
14
PITTSBURG V I L L A G E
14
SPILLERTOWN VILLAGE
14
WHITEASH VILLAGE
14
L C V E S PARK C I T Y
14
RCCKFORD CITY
14
SOUTH BELOIT C I T Y
14
WINNEBAGO VILLAGE
14
BEVERLY TOWNSHIP
14
HCUSTON TOWNSHIP
14
LIBERTY TOWNSHIP
14
QUINCY T O W N S H I P
14
BURGESS TOWNSHIP
14
CENTRAL TOWNSHIP
14
LAGRANGE TOWNSHIP
14
MULBERRY GROVE TOWNSHIP
14
OLD RIPLEY T O W N S H I P
14
SHOAL CREEK T O W N S H I P
14
TAMALCO T O W N S H I P
14
BONUS TOWNSHIP
14
BOONE T O W N S H I P
14
FLORA T O W N S H I P
14
LEROY TOWNSHIP
14
MANCHESTER T O W N S H I P
14
P O P L A R GROVE T O W N S H I P
14
SPRING TOWNSHIP
14
RIPLEY T O W N S H I P
STATE = 14: 445 RECORDS
THE
TEST
41
PAGE <*Z
05/23/78
'^DEPARTMENT
OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
14 CHERRY GROVE TOWNSHIP
STATE = 1A: 1 RECORDS
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
PAGE
OF
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
14 ELKHORN GROVE TOWNSHIP
14
FAIRHAVEN TOWNSHIP
14
LIMA T O W N S H I P
14
MT C A R R O L L T O W N S H I P
14
RCCK CREEK T O W N S H I P
14
SALEM T O W N S H I P
14
SAVANNA T O W N S H I P
14
WCODLAND TOWNSHIP
14
ARENZVILLE TOWNSHIP
14
ASHLAND TOWNSHIP
14
BEAROSTOWN TOWNSHIP
14
CHANOLERVILLE TOWNSHIP
14
HAGENER TOWNSHIP
14
NEWMANSVILLE TOWNSHIP
14
PANTHER CREEK TOWNSHIP
14
PHILADELPHIA TOWNSHIP
14
SANGAMON VALLEY TOWNSHIP
14
VIRGINIA T O W N S H I P
14
COLFAX TOWNSHIP
14
CUNNINGHAM TOWNSHIP
14
KERR T O W N S H I P
14
LUDLOW T O W N S H I P
14
RANTOUL T O W N S H I P
14
URBANA T O W N S H I P
14
DARWIN T O W N S H I P
14
DOUGLAS TOWNSHIP
14
B I B L E GROVE T O W N S H I P
14
BLAIR TOWNSHIP
14
CLAY CITY T O W N S H I P
14
HARTER TOWNSHIP
14
HCOSIER TOWNSHIP
14
LOUISVILLE TOWNSHIP
14
OSKALOOSA TOWNSHIP
14
PIXLEY TOWNSHIP
14
XENIA T O W N S H I P
14
3R00KSIDE TOWNSHIP
14
CLEMENT TOWNSHIP
14
LOOKING GLASS TOWNSHIP
14
PLEASANT GROVE TOWNSHIP
14
CALUMET TOWNSHIP
14
LEMONT T O W N S H I P
14
STICKNEY TOWNSHIP
14
MALTA T O W N S H I P
14
TEXAS TOWNSHIP
14
AVENA T O W N S H I P
14
BEAR GROVE T O W N S H I P
THE
TREASURY
*3
05/23/76
AT 3 1 : 2 5
U.S. DEPARTMENT
PAGE
OF
THE
TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE
STATE
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
GOVERNMENTS)
TITLE
3CWLING GREEN TOWNSHIP
CARSON TOWNSHIP
HURRICANE TOWNSHIP
KASKASKIA TOWNSHIP
LA C L E O E T O W N S H I P
LCNE GROVE T O W N S H I P
LOUDON TOWNSHIP
OTEGO TOWNSHIP
POPE TOWNSHIP
RAMSEY TOWNSHIP
SEFTON TOWNSHIP
ShARON TOWNSHIP
SCUTH HURRICANE TOWNSHIP
VANDALIA TOWNSHIP
WILBERTON TOWNSHIP
FRANKFORT
TOWNSHIP
MLRTHERN TOWNSHIP
SIX MILE T O W N S H I P
ASTORIA TOWNSHIP
BUCKHEART TOWNSHIP
CANTON TOWNSHIP
CASS TOWNSHIP
DEERFIELD TOWNSHIP
FARMERS TCWNSHIP
FARMINGTON TOWNSHIP
HARRIS TOWNSHIP
ISABEL TOWNSHIP
LEE TOWNSHIP
LEWISTOWN TOWNSHIP
PLEASANT TOWNSHIP
POTMAN T O W N S H I P
UNION TOWNSHIP
VERMONT TOWNSHIP
NATERFORD
TOWNSHIP
WCODLANO TOWNSHIP
ASBURY TOWNSHIP
BCWLESVILLE TOWNSHIP
E A G L E CREEK T O W N S H I P
EQUALITY TOWNSHIP
G C L O HILL T O W N S H I P
NEW HAVEN T O W N S H I P
M C R T H FORK T O W N S H I P
GMHA
TOWNSHIP
RIDGWAY TOWNSHIP
SHAWNEE TOWNSHIP
CARROLLTON TOWNSHIP
44
05/2 3/78 AT 3 1 : 2 5
U.S. DEPARTMENT
O I S T R E S S E D AREA
(ELIGIBLE
STATE
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
P A G E <»5
OF THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TITLE
KANE TOWNSHI P
L I N D E R TOWNS HIP
RCCK8RIDGE T OWNSHIP
RCODHOUSE TO WN
R U B I C O N TOWN SHIP
WALKERVILLE TOWNSHIP
WHITE HALL T O W N S H I P
W O O D V I L L E TO W N S H I P
BPACEVILLE T OWNSHIP
ERIENNA TOWN SHIP
BEAVER CREEK T O W N S H I P
C R O O K TOWNSH IP
C R O U C H TOWNS HIP
K N I G H T PRAIR IE T O W N S H I P
MCLEANSBORO TOWNSHIP
M A Y B E R R Y TOW N S H I P
SCUTH C R O U C H T O W N S H I P
S C U T H FLANNI GAN T O W N S H I P
SOUTH TWIGG T O W N S H I P
TWIGG TOWNSH IP
W I L C O X TOWNS HIP
LCMAX TOWNSH IP
M A R T I N T O N TO W N S H I P
MILKS GROVE T O W N S H I P
CARBONDALE T OWNSHIP
JERSEY TOWNS HIP
MISSISSIPPI TOWNSHIP
O T T E R CREEK T O W N S H I P
QUARRY TOWNS HIP
R I C H W O O D TOW N S H I P
R C S E O A L E TOW N S H I P
RUYLE TOWNSH IP
APPLE RIVER T O W N S H I P
B E R R E M A N TOW N S H I P
COUNCIL HILL TOWNSHIP
D E R I N D A TOWN SHIP
E L I Z A B E T H TO W N S H I P
G U I L F C R D TOW N S H I P
H A N O V E R TOwN SHIP
NORA TOWNSHI P
P L E A S A N T VAL LEY T O W N S H I P
RICE TOWNSHI P
RUSH TOWNSHI P
S T O C K T O N TOW N S H I P
THOMPSON TOW N S H I P
V I N E G A R HILL T O W N S H I P
TElST
05/2 3/78 AT 31:25
U.S. D E P A R T M E N T
DISTRESSED
AREA
PAGE
OF
TREASURY
ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE
THE
TITLE
14
WC0D8INE T O W N S H I P
14
AROMA TOWNSHIP
14
6CURB0NNAIS TOWNSHIP
14
ESSEX TOWNSHIP
14
GANEER TOWNSHIP
14
KANKAKEE T O W N S H I P
14
LIMESTONE TOWNSHIP
14
MANTENO TOWNSHIP
14
MCMENCE TOWNSHIP
14
OTTO TOWNSHIP
14
PEMBROKE T O W N S H I P
14
ROCKVILLE TOWNSHIP
14
ST ANNE TOWNSHIP
14
SALINA TOWNSHIP
14
YELLOWHEAO TOWNSHIP
14
CEDAR TOWNSHIP
14
CHESTNUT TOWNSHIP
14
COPLEY TOWNSHIP
14
ELBA TOWNSHIP
14
GALESBURa T O W N S H I P
14
HAW CREEK TOWNSHIP
14
LYNN TOWNSHIP
14
MAQUON TOWNSHIP
14
RIC TOWNSHIP
14
SALEM TOWNSHIP
14
TRURO TOWNSHIP
14
VICTORIA T O W N S H I P
14
WALNUT GROVE TOWNSHIP
14
GALESBURG CITY T O W N S H I P
14
ADAMS TOWNSHIP
14
ALLEN TOWNSHIP
14
BROOKFIELD T O W N S H I P
14
BRUCE TOWNSHIP
14
DEER PARK T O W N S H I P
14
DIMMICK TOWNSHIP
14
EAGLE TOWNSHIP
14
EARL TOWNSHIP
14
EDEN TOWNSHIP
14
FARM RIDGE T O W N S H I P
14
FREEOOM TOWNSHIP
14
GROVELAND T O W N S H I P
14
HOPE TOWNSHIP
14
LA SALLE T O W N S H I P
14
MANLIUS TOWNSHIP
14
MENOOTA TOWNSHIP
14
MERIDEN T O W N S H I P
TEST
46
05/2 3/78
DISTRESSED
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
OF THE
AREA
(ELIGIBLE
STATE
PAGE
AT 3 1 : 2 5
U.S. D E P A R T M E N T
TREASURY
ELIGIBILITY
GOVERNMENTS)
TITLE
OPHIR TOWNSHIP
OSAGE T O W N S H I P
OTTAWA T O W N S H I P
O T T E R CREEK T O W N S H I P
PERU T O W N S H I P
RICHLAND TOWNSHIP
RUTLAND TOWNSHIP
SERENA T O W N S H I P
S O U T H OTTAWA T O W N S H I P
TROY GROVE T O W N S H I P
VERMILION TOWNSHIP
WALLACE TOWNSHIP
WALTHAM T O W N S H I P
AETNA T O W N S H I P
ATLANTA T O W N S H I P
BROADWELL T O W N S H I P
CHESTER TOWNSHIP
CORWIN TOWNSHIP
EAST L I N C O L N T O W N S H I P
E L K H A R T TOWN
EMINENCE TOWNSHIP
HURLBUT TOWNSHIP
LAENNA T O W N S H I P
LAKE FORK T O W N S H I P
MT PULASKI T O W N S H I P
ORAN T O W N S H I P
ORVIL T O W N S H I P
SHERIDAN TOWNSHIP
WEST L I N C O L N T O W N S H I P
BETHEL TOWNSHIP
CHALMERS TOWNSHIP
COLCHESTER TOWNSHIP
ELDORADO TOWNSHIP
EPMET T O W N S H I P
L A M D I N E TW?
MACOMB T O W N S H I P
TENNESSEE TOWNSHIP
HARRISTOWN TOWNSHIP
BARR T O W N S H I P
CAHOKIA TOWNSHIP
ALTON T O W N S H I P
CHOUTEAU TOWNSHIP
CCLLINSVILLE TOWNSHIP
FCRT RUSSELL T O W N S H I P
GODFREY TOWNSHIP
G R A N I T E CITY T O W N S H I P
TEST
47
05/23/78
A
P A G E 48
S
;;s; ^pARTM£Nr
0F
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
TITLE
14 HELVETIA T O W N S H I P
14 JARVIS TOWNSHIP
14 MCRO TOWNSHIP
14 NAMEOKI TOWNSHIP
14 NEW DOUGLAS TOWNSHIP
14 OLIVE TOWNSHIP
14 OfPHGHENT TOWNSHIP
14 PIN OAK TOWNSHIP
14 SALINE TOWNSHIP
14 VENICE TOWNSHIP
14 WOOD RIVER T O W N S H I P
14 FOSTER TOWNSHIP
14 MEACHAM TOWNSHIP
14 ODIN TOWNSHIP
14 SANDOVAL T O W N S H I P
14 STEVENSON TOWNSHIP
14 AUDUBON TOWNSHIP
14 3CIS D ARC TOWNSHIP
14 BUTLER GROVE TOWNSHIP
14 EAST FOR* TOWNSHIP
14 FILLMORE T O W N S H I P
14 GRISHAM TOWNSHIP
14 HARVEL TOWNSHIP
14 HILLSBORO TOWNSHIP
14 IRVING TOWNSHIP
14 NOKOMIS TOWNSHIP
14 N LITCHFIELD TOWNSHIP
14 PITMAN TOWNSHIP
14 RAYMOND TOWNSHIP
14 RCUNTREE TOWNSHIP
14 SC LITCHFIELD T O W N S H I P
14 WITT TOWNSHIP
14 DEMENT TOWNSHIP
14 EAGLE POINT TOWNSHIP
14 LINCOLN TOWNSHIP
14 MT MORRIS TOWNSHIP
14 WHITE ROCK TOWNSHIP
14 ATLAS TOWNSHIP
14 CHAMBERS3URG TOWNSHIP
14 CINCINNATI TOWNSHIP
14 DERRY TOWNSHIP
14 FAIRMOUNT T O W N S H I P
14 F L I N T TOWNSHIP
14 HADLEY
GRIGGSVILLE
HARDIN TOWNSHIP
TOWNSHIP
THE T R E A S U R Y
05/23/78
AT 3 1 : 2 5
U.S. DEPARTMENT
DISTRESSED
AREA
PAGE
OF THE
ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
266-274 O - 78 - 8
TREASURY
TITLE
KINDERHOOK T OWNSHIP
L E V E E TOWNSH IP
MARTINSBURG TOWNSHIP
MCNTESUMA TO W N S H I P
NEWBURG TOWN SHIP
NEW SALEM TO W N S H I P
PEARL TOWNSH IP
PERRY TOWNSH IP
PITTSFIELD T OWNSHIP
P L E A S A N T HIL L T O W N S H I P
P L E A S A N T VAL E T O W N S H I P
ROSS TOWNSHI P
SPRING CREEK T O W N S H I P
B O N P A S TOWNS HIP
DENVER TOWNS HIP
GERMAN TOWNS HIP
MADISON TOWN SHIP
NC3LE TOWNSH IP
OLNEY TOWNSH IP
C A N T E E N TOWN SHIP
CASEYVILLE T OWNSHIP
CENTREVILLE TOWNSHIP
E A S T ST LOUI S T O W N S H I P
P R A I R I E DU L ONG T O W N S H I P
S T I T E S TOWNS HIP
S U G A R LOAF T O W N S H I P
EAST ELDORAD 0 T O W N S H I P
LONG BRANCH T O W N S H I P
MOUNTAIN TOW N S H I P
RECTOR TOWNS HIP
ASH GROVE TO WNSHIP
DRY POINT TO WNSH IP
HERRICK TOWN SHIP
H O L L A N D TOWN SHIP
L A K E W O O D TOW N S H I P
MCWEAQUA TOW N S H I P
OCONEE TOWNS HIP
OKAW TOWNSHI P
PENN TOWNSHI P
PICKAWAY TOW N S H I P
PRAIRIE TOWN SHIP
RICHLAND TOW N S H I P
RIDGE TOWNSH IP
ROSE TOWNSHI P
RURAL TOWNSH IP
SHELBYVILLE TOWNSHIP
TEIST
49
05/23/7B
U S
--
AT
31:25
0E
""N£MT OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
14 SIGEL TOWNSHIP
14
T L W E R HILL T O W N S H I P
14
WINDSOR TOWNSHIP
14
JEFFERSON TOWNSHIP
14
LANCASTER TOWNSHIP
14
ONECO TOWNSHIP
14
RIDOTT TOWNSHIP
14
RCCK G R O V E T O W N S H I P
14
BLOUNT TOWNSHIP
14
BUTLER TOWNSHIP
14
CARROLL TOWNSHIP
14
CATLIN TOWNSHIP
14
DANVILLE TOWNSHIP
14
ELWOOD TOWNSHIP
14
GEORGETOWN TOWNSHIP
14
GRANT TOWNSHIP
14
JAMAICA TOWNSHIP
14
LOVE T O W N S H I P
14
MCKENDREE TOWNSHIP
14
MIDOLEFORK TOWNSHIP
14
NEWELL TOWNSHIP
14
PILOT TOWNSHIP
14
ROSS T O W N S H I P
14
SIDELL TOWNSHIP
14
C0LD8R00K TOWNSHIP
14
ELLISON TOWNSHIP
14
FLOYD TOWNSHIP
14
HALE T O W N S H I P
14
KELLY TOWNSHIP
14
MONMOUTH TOWNSHIP
14
POINT PLEASANT TOWNSHIP
14
ROSEVILLE TOWNSHIP
14
SUMNER T O W N S H I P
14
SWAN T O W N S H I P
14
OU B O I S T O W N S H I P
14
ARRINGTON TOWNSHIP
14
BARNHILL TOWNSHIP
14
BEDFORD TOWNSHIP
14
BERRY TOWNSHIP
14
BIG MOUND T O W N S H I P
14
ELM RIVER T O W N S H I P
14
G A R D E N HILL T O W N S H I P
14
GFOVER TOWNSHIP
14
H I C K O R Y HILL T O W N S H I P
14
INDIAN P R A I R I E T O W N S H I P
14
KEITH TOWNSHIP
PAGE 50
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED
AREA
P A G E 51
OF THE
ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE TITLE
14 LAMARD TOWNSHIP
14
MT E R I E T O W N S H I P
14
ORCHARD TOWNSHIP
14
OREL T O W N S H I P
14
BURNT P R A I R I E T O W N S H I P
14
CARMI T O W N S H I P
14
EMMA T O W N S H I P
14
EKFIELD TOWNSHIP
14
GRAY T O W N S H I P
14
HAWTHORNE T O W N S H I P
14
HERALDS PRAIRIE TOWNSHIP
14
INDIAN CREEK T O W N S H I P
14
MILL S H O A L S T O W N S H I P
14
PHILLIPS TOWNSHIP
14
LYNDON TOWNSHIP
14
USTICK T O W N S H I P
14
BURRITT TOWNSHIP
14
HARRISON TOWNSHIP
14
RCCKFORD TOWNSHIP
14
WINNEBAGO TOWNSHIP
STATE = 14: 3 38 RECORDS
TREASURY
TEST
PAGE
05/23/78 A T J l ' »
p A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
15 BLACKFORD COUNTY
15
CRAWFORD COUNTY
15
DAVIESS COUNTY
15
DEARBORN COUNTY
15
DELAWARE C O U N T Y
15
ELKHART COUNTY
15 F A Y E T T E C O U N T Y
15
FOUNTAIN COUNTY
15
FRANKLIN COUNTY
15
G R E E N E COUNTY
15
JAY COUNTY
15
JEFFERSON C O U N T Y
15
LAWRENCE COUNTY
15
MARTIN C O U N T Y
15
MIAMI COJNTY
15
NOBLE COUNTY
15
OHIO COUNTY
15
ORANGE C O U N T Y
15
OWEN COUNTY
15
PARKE COUNTY
15
PERRY COUNTY
15
PUTNAM C O U N T Y
15
RANDOLPH COUNTY
15
RIPLEY C O U N T Y
15
RUSH COUNTY
15
ST J O S E P H C O U N T Y
15
S C O T T COUNTY
15
SHELBY C O U N T Y
15
VERMILLION COUNTY
15
VIGO COUNTY
15
WAYNE COUNTY
15
F C R T WAYNE C I T Y
15
HARTFORD CITY
15
MCNTPELIEP CITY
15
LLGANSPORT CITY
15
ROYAL CENTER TOWN
15
CHARLESTOWN CITY
15
NEW P R O V I O E N C L TOWN
15
C C L F A X TOWN
15
K I R K L I N TOWN
15
M U L B E R R Y TOWN
15
ALTON TOWN
15
E N G L I S H TOWN
15
L E A V E N W O R T H TOWN
15
MARENGO TCWN
15
ALFORDSVILLE TOWN
0F
THE
TREASURY
52
05/2 3/78 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED
AREA
(ELIGIBLE
STATE
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
TITLE
CANNELBURG TOWN
ELNORA TOWN
MONTGOMERY TOWN
ODON TOWN
PLAINVILLE TOWN
WASHINGTON CITY
AURORA CITY
O I L L S B O R O TOWN
GREENDALE TOWN
LAWRENCE3URG CITY
MOORES HILL TOWN
ST LEON TOWN
WEST HARRISON TOWN
ALBANY TOWN
EATON TOWN
MUNCIE CITY
E L K H A R T CITY
CONNERSVILLE CITY
NEW ALBANY C I T Y
ATTICA CITY
KINGMAN TOWN
WALLACE TOWN
BROOKVILLE TOWN
CEOAR GROVE TOWN
LAUREL TOWN
MOUNT CARMEL TOWN
OLOENBURi TOWN
G A S CITY C I T Y
MARION CITY
MATTHEWS TOWN
BLOOMFIELO TOWN
JASONVILLE CITY
LINTON CITY
L Y O N S TOWN
NEWBERRY TOWN
SWITZ CITY TOWM
W O R T H I N G T O N TOWN
CORYDON TOWN
LACONIA CORP
MAUCKPORT TOWN
NEW AMSTERDAM TOWN
NEW MIDDLETOWN TOWN
BLOUNT SVILLE 1 TOWN
K M G H T S T O W N TOWN
MOORELAND TOWN
NEW C A S T L E : C I T Y
P A G E 53
OF THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TEST
nt./o?/7fl
05/*5/™
A T 01:25
^ ^
0 E p A R T M E N T
P A G E 54
0F
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
15 HUNTINGTON CITY
15
MOUNT ETNA TOWN
15
CROTHERSVILLE TOWN
15
MEDORA TOWN
15
SEYMOUR CITY
15
BRYANT TOWN
15
PENNVILLE TOWN
15
REDKEY TOWN
15
SALAMONIA TOWN
15
BR00KS8URG TOWN
15
HANOVER TOWN
15
MADISON CITY
15
DUPONT TOWN
15
BICKNELL CITY
15
DECKER TOWN
15
EDWARDSPORT TOWN
15
OAKTOWN TOWN
15
VINCENNES CITY
15
WHEATLAND TOWN
15
BRUCEVILLE TOWN
15
SHIPSHEWANA TOWN
15
TOPEKA TOWN
15
EAST CHICAGO C I T Y
15
LAKE STATION C I T Y
15
GARY CITY
15
CEDAR LAKE TOWN
15
KINGSBURY TOWN
15
WESTVILLE TOWN
15
BEDFORD CITY
15
MITCHELL CITY
15
OOLITIC TCWN
15
ALEXANDRIA CITY
15
ANDERSON CITY
15
ELWOOD CITY
15
INGALLS TOWN
15
LAPEL TOWN
15
ORESTES TOWN
15
U D I A N A P O L I S CITY
15
LYNHURST TOWN
15
LCOGOOTEE CITY
15
SHOALS TOWN
15
CRANE TOWN
15
DENVER TOWN
15
NORTH GPOVE TOWN
15
PERU CITY
15
BLOOMINGTON CITY
THE
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE 55
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
15 STINESVILLE TOWN
15
ALAMO TOWN
15
WAVELAND TOWN
15
ALBION TOWN
15
CROMWELL TOWN
15
KENDALLVILLE CITY
15
LIGONIER CITY
15
ROME CITY TOWN
15
RISING SUN CITY
15
FRENCH LICK TOWN
15
ORLEANS TOWN
15
PAOLI TOWN
15
WEST BADEN TOWN
15
GOSPORT TOWN
15
SPENCER TOWN
15
BLOOMINGDALE! TOWN
15
JUDSON TOWN
15
MARSHALL TOWN
15
MONTEZUMA TOWN
15
ROCKVILLE TOWN
15
ROSEDALE TOWN
15
MECCA TOWN
15
CANNELTON CITY
15
TELL CITY CITY
15
TROY TOWN
15
BAINBRIDGE TOWN
15
CLOVERDALE TOWN
15 GREENCASTLE CITY
15
ROACHDALE TOWN
15
RUSSELLVILLE TOWN
15
LYNN TOWN
15
RIDGEVILLE TOWN
15
SARATOGA TOWN
15
UNION CITY CITY
15
WINCHESTER CITY
15
LOSANTVILLE TOWN
15
MILAN TOWN
15
OSGOOD TOWN
15
SUNMAN CIVIL TOWN
15
NAPOLEON TOWN
15
HOLTON TOWN
15 CARTHAGE TOWN
15
RUSHVILLE CITY
15
LAKEVILLE TOWN
15
NORTH LIBERTY TOWN
15
SOUTH BEND CITY
TREASURY
05/23/„ » J J » » „ R „ M I
or IHE IRE,SURr
DISTRESSED AREA ELIGIBILITY TELST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
15 KALKERTCN TOWN
15
SCOTTSBURG C I T Y
15
AUSTIN TOWN
15
SHELBYVILLE CITY
15
NCRTH JUDSON TOWN
15
PATRIOT TOWN
15
CAYUGA TOWN
15
CLINTON CITY
15
DANA TOWN
15
FAIRVIEW PARK TOWN
15
NEWPORT TOWN
15
PERRYSVILLE TOWN
15
RILEY TOWN
15
SEELYVILLE C I V I L TOWN
15
TERRE HAUTE CITY
15
WEST TERRE HAUTE CITY
15
LAGRO TCWN
15
NCRTH MANCHESTER TOWN
15
ROANN TOWN
15
WABASH CITY
15
CAMBRIDGE CITY TOWN
15
CENTERVILLE TOWN
15
DUBLIN TOWN
15
ECONOMY TOWN
15
F O U N T A I N C I T Y TOWN
15
HAGERSTOWN TOWN
15
MILTON TOWN
15
MCUNT AUBURN TOWN
15
RICHMOND C I T Y
15
8LUFFT0N CITY
15
PCNETO TOWN
15
VERA CRUZ TOWN
15
B U R N E T T S V I L L E TOWN
15
MILAN TOWN
15
SPRINGFIELD T O W N S H I P
15
WAYNE TOWNSHIP
15
WASHINGTON T O W N S H I P
15
ADAMS TOWNSHIP
15
CLINTON TOWNSHIP
15
EEL TOWNSHIP
15
JEFFERSON T O W N S H I P
15
NOBLE TOWNSHIP
15
CHARLESTOWN TOWNSHIP
15
OREGON TOWNSHIP
15
WASHINGTON T O W N S H I P
15
MADISON T O W N S H I P
"" "
05/23/76 AT 31:25
U.S. DEPARTMENT OF THE
PAGE 57
TREASURY
DISTRESSED AREA ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
TITLE
BOONE TOWNSH IP
JENNINGS TOW NSHIP
JOHNSON TOWN SHIP
LI8ERTY TOWN SHIP
OHIO TOWNSHI P
PATOKA TOWNS HIP
STERLING TOW NSHIP
UNION TOWNSH IP
WHISKEY RUN TOWNSHIP
BARR TOWNSHI P
BOGARD TOWNS HIP
ELMORE TOWNS HIP
HARRISON TOW NSHIP
MADISON TOWN SHIP
REEVE TOWNSH IP
STEELE TOWNS HIP
VANBUREN TOW NSHIP
VEALE TOWNSH IP
WASHINGTON T OWNSHIP
CAESAR CREEK TOWNSHIP
CENTER TOWNS HIP
CLAY TOWNSHI P
HARRISON TOW NSHIP
HCGAN TOWNSH IP
JACKSON TOWN SHIP
KELSO TOWNSH IP
LAWRENCE3URG TOWNSHIP
LOGAN TOWNSH IP
MANCHESTER T OWNSHIP
MILLER TOWNS HIP
SPARTA TOWNS HIP
WASHINGTON T OWNSHIP
YORK TOWNSHI P
CENTER TOWNS HIP
DELAWARE TOW NSHIP
UNION TOWNSH IP
BAUGC TOWNSH IP
CONCORD TOWN SHIP
HARRISON TOW NSHIP
COLUMBIA TOW NSHIP
CCNNERSVILLE TOWNSHIP
HARRISON TOW NSHIP
JACKSON TOWN SHIP
WATERLOO TOW NSHIP
DAVIS TOWNSH IP
LOGAN TOWNSH IP
TEST
05/23/76
A
;.s!SDEPARTM£NT
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
15 MILLCREEK TOWNSHIP
15
BATH TOWNSHIP
15
BLOOMING GROVE T O W N S H I P
15
BROOKVILLE T O W N S H I P
15 F A I R F I E L ) T O W N S H I P
15
HIGHLAND T O W N S H I P
15
LAUREL TOWNSHIP
15
METAMORA T O W N S H I P
15
PCSEY TOWNSHIP
15
RAY TOWNSHIP
15
SALT CREEK T O W N S H I P
15
SPRINGFIELD TOWNSHIP
15
WHITEWATER T O W N S H I P
15
CENTER T O W N S H I P
15
FRANKLIN TOWNSHIP
15
JEFFERSON T O W N S H I P
15
MILL TOWNSHIP
15
RICHLAND T O W N S H I P
15
BEECH CREEK T O W N S H I P
15
CASS T O W N S H I P
15
CENTER TOWNSHIP
15
FAIRPLAY TOWNSHIP
15
GRANT TOWNSHIP
15
HIGHLAND T O W N S H I P
15
JACKSON TOWNSHIP
15
JEFFERSON TOWNSHIP
15
RICHLAND T O W N S H I P
15
STOCKTON TOWNSHIP
15
TAYLOR T O W N S H I P
15
WASHINGTON T O W N S H I P
15
WRIGHT T O W N S H I P
15
BOONE TOWNSHIP
15
HARRISON T O W N S H I P
15
WEBSTER T O W N S H I P
15
BLUE RIVER T O W N S H I P
15
HOWARD TOWNSHIP
15
DALLAS TOWNSHI*
15
HUNTINGTON TOWNSHIP
15
UNION TOWNSHIP
15
WARREN T O W N S H I P
15
CARR T O W N S H I P
15
JACKSON T O W N S H I P
15
PERSHING TOWNSHIP
15
VERNON T O W N S H I P
15
BEAR CREEK T O W N S H I P
15
JEFFERSON TOWNSHIP
TREASURY
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED
AREA
(ELIGIBLE
STATE
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
TITLE
PENN T O W N S H I P
RICHLAND TOWNSHIP
WA8ASH TOWNSHIP
GRAHAM TOWNSHIP
HANOVER TOWNSHIP
LANCASTER TOWNSHIP
MAOISON TOWNSHIP
MILTON T O W N S H I P
MONROE T O W N S H I P
SALUOA T O W N S H I P
SHELBY TOWNSHIP
SKYRNA T O W N S H I P
DECKER TOWNSHIP
VIGO T O W N S H I P
WASHINGTON TOWNSHIP
8L0CMFIELC TOWNSHIP
CALUMET TOWNSHIP
GALENA TOWNSHIP
HUDSON TOWNSHIP
KANKAKEE TOWNSHIP
NEW DURHAM T O W N S H I P
WASHINGTON TOWNSHIP
BONO T O W N S H I P
GUTHRIE TOWNSHIP
INDIAN CREEK T O W N S H I P
MARION T O W N S H I P
MARSHALL TOWNSHIP
PERRY T O W N S H I P
P L E A S A N T RUN T O W N S H I P
SHAWSWICK T O W N S H I P
SPICE VALLEY T O W N S H I P
ANDERSON TOWNSHIP
F A L L CREEK T O W N S H I P
LAFAYETTE TOWNSHIP
PIPE CREEK T O W N S H I P
UNION T O W N S H I P
CENTER TOWNSHIP
WARREN TOWNSHIP
CENTER T O W N S H I P
HALBERT TOWNSHIP
L C S T RIVER T O W N S H I P
MITCHELTREE TOWNSHIP
PERRY T O W N S H I P
RUTHERFORD T O W N S H I P
BUTLER T O W N S H I P
PERRY TOWNSHIP
PAGE
OF THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TEST
59
0 5 / 2 3/78 AT 3 1 : 2 5
U . S . D E P A R T M E N T OF THE
DISTRESSED
AREA
(ELIGIBLE
STATE
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
PAGE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TITLE
PERU TOWNSHI
P I P E CREEK T O W N S H I P
PERRY TOWNSH IP
BROWN TOWNSH IP
C L A R K TOWNSH IP
A L 3 I 0 N T O W N S HIP
E L K H A R T TOWN SHIP
ORANGE T O W N S HIP
PERRY TCWNSH IP
C A S S TOWNSHI P
PIKE TOWNSHI P
U N I O N TCWNSH IP
F R E N C H LICK T O W N S H I P
GREENFIELD T OWNSHIP
JACKSON TOWN SHIP
N O R T H E A S T TO WNSHIP
N O R T H W E S T TO W N S H I P
ORANGEVILLE TOWNSHIP
O R L E A N S TOWN SHIP
P A O L I TOWNSH IP
S O U T H E A S T TO WNSHIP
S T A M P E R S C RE EK T O W N S H I P
CLAY TOWNSHI P
F R A N K L I N TOW N S H I P
H A R R I S O N TOW NSHI P
JACKSON TOWN SHIP
J E F F E R S O N TO W N S H I P
J E N N I N G S TOW NSHI P
LAFAYETTETOW NSHIP
MARION TOWNS HIP
MCNTGOMERY T OWNSHIP
MORGAN TOWNS HIP
TAYLOR TOWNS HIP
WASHINGTON T OWNSHIP
WAYNE TOWNSH IP
A D A M S TOWNSH IP
F L O R D I A TOWN SHIP
H O W A R D TOWNS HIP
J A C K S O N TOWN SHIP
L I 8 E R T Y TOWN SHIP
PENN TOWNSHI P
R A C C O O N TCWN SHIP
R E S E R V E TOWN SHIP SCHOOL
SUGAR CREEK T O W N S H I P
UNION TOwNSH IP
W A B A S H TOWNS HIP
TE«ST
SO
05/2 3/76 AT 3 1 : 2 5
U.S. DEPARTMENT
DISTRESSED
AREA
PAGE
OF
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
TITLE
WASHINGTON T OWNSHIP
A N O E R S O N TOW N S ^ I P
C L A R K TOWNSH IP
L E O P O L C TOWN SHIP
OIL T O W N S H I P
T O B I N TOWNSH IP
TROY TOWNSHI P
UNION TOWNSH IP
RICH GROVE T O W N S H I P
TIPPECANOE T OWNSHIP
C L I N T O N TOWN SHIP
CLCVERDALE T OWNSHIP
F R A N K L I N TOW N S H I P
GREENCASTLE TOWNSHIP
J E F F E R S O N TO W N S H I P
M A O I S C N TCWN SHIP
MARION TOWNS H I °
MONROE TOWNS HIP
RUSSELL TOWN SHIP
WARREN TOWNS HIP
WASHINGTON T OWNSHIP
F R A N K L I N TOW NSHI P
GREENSFORK T OWNSHIP
JACKSON TOWN SHIP
WARD TOWNSHI P
WAYNE TOWNSH IP
WHITE RIVER T O W N S H I P
ADAMS TOWNSH IP
BROWN TOWNSH IP
C E N T E R TOWNS HIP
D E L A W A R E TOW N S H I P
F R A N K L I N TOW N S H I P
JACKSON TOWN SHIP
L A U G H E R Y TOW N S H I P
O T T E R CREEK T O W N S H I P
SHELBY TOWNS HIP
A N D E R S O N TOW N S H I P
C E N T E R TOWNS HIP
JACKSON TOWN SHIP
NOBLE TOWNSH IP
ORANGE TOWNS HIP
PCSEY TOWNSH IP
RICHLAND TOW N S H I P
RIPLEY TOWNS HIP
RUSHVILLE TO WNSH IP
U N I O N TOWNSH IP
TREASURY
ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE
THE
TEST
51
PAGE
05/23/78
A
:
J/;; ^pARTMENT
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
TITLE
15
WALKER T O W N S H I P
15
WASHINGTON T O W N S H I P
15
GREENE TOWNSHIP
15
LINCOLN T O W N S H I P
15
PENN TOWNSHIP
15
PCRTAGE TOWNSHIP
15
FINLEY T O W N S H I P
15
JENNINGS T O W N S H I P
15
JCHNSON T O W N S H I P
15
LEXINGTON T O W N S H I P
15
ADDISON T O W N S H I P
15
BRANDYWINE C I V I L TWP
15 L I B E R T Y T O W N S H I P
15
DAVIS TOWNSHIP
15
RAILROAD T O W N S H I P
15
WAYNE TOWNSHIP
15
BROWNSVILLE T O W N S H I P
15
UNION TOWNSHIP
15
CLINTON TOWNSHIP
15
EUGENE TOWNSHI^
15
HELT T O W N S H I P
15
HARRISON T O W N S H I P
15
PRAIRIETON T O W N S H I P
15
RILEY TOWNSHIP
15
SUGAR CREEK T O W N S H I P
15
CHESTER TOWNSHIP
15
NCBLE TOWNSHIP
15
PLEASANT T O W N S H I P
15
PINE T O W N S H I P
15
STEUBEN TOWNSHIP
15
WARREN T O W N S H I P
15
OALTON T O W N S H I P
15
FRANKLIN TOWNSHIP
15
GREENE TOWNSHIP
15
JACKSON TOWNSHIP
15
JEFFERSON TOWNSHIP
15
NEW GARDEN T O W N S H I P
15
WASHINGTON TOWNSHIP
15
WAYNE T O W N S H I P
15
JACKSON TOWNSHIP
15
WEST POINT T O W N S H I P
STATE - 15: 501 RECORDS
OF THE
TREASURY
62
^
t:l;TrwMMMCy
0 5 / 2 3/78 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED
AREA
PAGE
OF THE T R E A S U R Y
ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STAT E
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
TITLE
ADAMS COUNTY
APPANOOSE COUNTY
AUDU80N COUNTY
DECATUR CCUNTY
RINGGOLD COUNTY
TAYLOR COUNTY
WAYNE COUNTY
O R I E N T TOWN
C A R B O N TOWN
N O D A W A Y TOWN
PRESCOTT TOWN
CENTERVILLE CITY
C I N C I N N A T I TOWN
E X L I N E TDW^
M O R A V I A TCWN
M C U L T O N TOWN
M Y S T I C CITY
NUMA TOWN
P L A N C TOWN
R A T H B U N TOWN
U D E L L TOWN
U N I O N V i L L E TOWN
B R A Y T O N TOWN
G R A Y TOWN
L U T H E R TOWN
J C L L E Y TOWN
D E L M A R TOWN
D A V I S CITY TOWN
DECATUR CITY TOWN
GAROEN GRCVE TOWN
G R A N D RIVER TOWN
L A M O N I CITY
LEON CITY
LE ROY TOWN
PLEASANTON TOWN
W E L D O N TOWN
C A S E Y TOWN
D U N L A P TOWN
hn.GNOLIA T C W N
HURSTVILLE TOWN
MONMOUTH CITY
C O L F A X CITY
D E L T A TOWN
H A R P E R TOWN
K E S W I C K TOWN
K E O K U K CITY
TEST
63
05/23/78
A
Jj;S^pARTHENT
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
TITLE
lb DERBY TOrfN
lb L U C A S TOWN
lb
W I L L I A M S O N TOWN
lb
BEVINGTCN TOWN
lb B A R N E S CIT Y TOWN
lb BEACON TOW N
lb NEW SHARON TOWM
lb RCSE HILL TOWN
lb
U N I V E R S I T Y PARK TOWN
lb KEOMAH CIT Y
lb MITCHELL T OWN
lb
8LANCHARD TOWN
lb CLARINDA C ITY
lb O I A G O N A L T OWN
lb
K E L L E R T O N TCWN
lb MALOY TOWN WN
lb
REDOING TO WN
lb T I N G L E Y TO WN
lb EARLING TO TOWN
lb
WESTPHALIA TOWN
lb
ATHELSTAN OWN
lb B L O C K T O N T N
lb CCNWAY TOW TOWN
lb
SHARPS8URG TOWN
lb
FARMINGTON N
lb
MILTON TOW LING TOWN
lb MOUNT STER OWN
lb E L D O N TOWN TOWN
lb S T AHTUEM E S=T Olb:
N T WN77 R E C O R D S
lb
MILLERTON
lb SEYMOUR TO
0F
THE T R E A S U R Y
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. DEPARTMENT
OISTRESSEO AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
17 ANDERSON COUNTY
17
ATCHISON COUNTY
17
C H A S E COUNTY
17
CHAUTAUQUA COUNTY
17
CHEROKEE COUNTY
17
CRAWFORD COUNTY
17
ELK COUNTY
17
LABETTE COUNTY
17
WYANDOTTE COUNTY
17
C O L O N Y CITY
17
G R E E L E Y CITY
17
LONE ELM C I T Y
17
WESTPHALIA CITY
17
ATCHISON CITY
17
LANCASTER CITY
17
MAPLETON CITY
17
FAIRVIEW CITY
17
H O R T O N CITY
17
M O R R I L L CITY
17
ROBINSON CITY
17
W I L L I S CITY
17
C E D A R POINT CITY
17
COTTONWOOD FALLS CITY
17
E L M D A L E CITY
17
CHAUTAUQUA CITY
17
E L G I N CITY
17
PERU CITY
17
SEDAN CITY
17
BAXTER S P R I N G S C I T Y
17
COLUMBUS CITY
17
GALENA CITY
17
T R E E C E CITY
17
WEIR CITY
17
RGSELAND CITY
17
G R I D L E Y CITY
17
W A V E R L Y CITY
17
CAMBRIDGE CITY
17
U O A L L CITY
17
ARCADIA CITY
17
ARMA CITY
17
CHEROKEE CITY
17
GIRARD CITY
17
H E P L E R CITY
17
KCCUNE CITY
17
MULBERRY C I T Y
17
PITTSBURG C I T Y
PAGE
OF THE
TREASURY
65
05/2 3/78 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
TITLE
WALNUT CITY
ENTERPRISE CITY
HCPE CITY
MANCHESTER CITY
ELK F A L L S C I T Y
H O W A R D CITY
L C N G T O N CITY
M C L I N E CITY
F A L L RIVER C I T Y
SEVE.RY CITY
V I R G I L CITY
COOLIDGE CITY
BLUFF CITY C I T Y
DANVILLE CITY
PENALOSA CITY
ALTAMCNT CITY
C H E T O P A CITY
EDNA CITY
L A B E T T E CITY
MOUND VA.LEY C I T Y
O S W E G O CITY
P A R S O N S CITY
L A N S I N G CITY
B U R N S CITY
LINCOLNVILLE CITY
RAMONA CITY
TAMPA CITY
A X T E L L CITY C I T Y
BLUE R A P I D S C I T Y
SUMMERFIELD CITY
LATIMER CITY
W H I T E CITY C I T Y
CENTRALIA CITY
C O R N I N G CITY
GCFF CITY
O N E I D A CITY
W E T M O R E CITY
B A Z I N E CITY
TESCOTT CITY
A L D E N CITY
O A M A R CITY
LIEBENTHAL CITY
RUSH C E N T E R C I T Y
PARADISE CITY
C E D A R CITY
CONWAY SPRINGS CITY
PAGE
OF
THE
TREASURY
6b
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. DEPARTMENT
DISTRESSED
AREA
(ELIGIBLE
STATE
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
PAGE
OF THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TITLE
ALMA CITY
ESKRIDGE CITY
M C F A R L A N D CITY
P A X I C O CITY
A L T O O N A CITY
B U F F A L O CITY
COYVILLE CITY
NEW ALBANY C I T Y
NEOSHO FALLS CITY
T O R O N T O CITY
EDWARDSVILLE CITY
K A N S A S CITY C I T Y
I N D I A N CREEK T O W N S H I P
LINCOLN TOWNSHIP
LONE ELM T O W N S H I P
OZARK T O W N S H I P
PUTNAM T O W N S H I P
REEDER TOWNSHIP
UNION TOWNSHIP
WALKER T O W N S H I P
WASHINGTON TOWNSHIP
WESTPHALIA TOWNSHIP
CENTER TOWNSHIP
FRANKLIN TOWNSHIP
MILL CREEK T O W N S H I P
WALNUT TOWNSHIP
MISSION TOWNSHIP
CEDAR TOWNSHIP
COTTONWOOD TOWNSHIP
DIAMOND CREEK TOWNSHIP
FALLS TOWNSHIP
MATFIELD TOWNSHIP
BELLEVILLE TOWNSHIP
CANEYVILLE TOWNSHIP
HARRISON TOWNSHIP
HENDRICKS TOWNSHIP
SALT CREEK T O W N S H I P
SEDAN T O W N S H I P
SUMMIT T O W N S H I P
WASHINGTON TOWNSHIP
CHEROKEE TOWNSHIP
CRAWFORD TOWNSHIP
LYON T O W N S H I P
MINERAL TOWNSHIP
NEOSHC T O W N S H I P
PLEASANT VIEW T O W N S H I P
TEST
67
05/23/78
A
J^5205EpARTMENT
DISTRESSED AREA ELIGIBILITY TE'ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
17 ROSS TOWNSHIP
17
SALAMANCA T O W N S H I P
17
AVON T O W N S H I P
17
LIBERTY TOWNSHIP
17
ROCK CREEK T O W N S H I P
17
STAR T O W N S H I P
17
CEDAR TOWNSHIP
17
GRANT TOWNSHIP
17
OMNIA T O W N S H I P
17
RICHLAND TOWNSHIP
17
WINDSOR TOWNSHIP
17
LINCOLN TOWNSHIP
17
SHERIDAN TOWNSHIP
17
SHERMAN T O W N S H I P
17
WALNUT TOWNSHIP
17
UNION TOWNSHIP
17
ELK F A L L S T O W N S H I P
17
HOWARD TOWNSHIP
17
LIBERTY TOWNSHIP
17
O A K VALLEY T O W N S H I P
17
UNION CENTER TOWNSHIP
17
O T T E R CRll^
TOWNSHIP
17
SALEM TOWNSHIP
17
CANADA T O W N S H I P
17
FAIRVIEW TOWNSHIP
17
HACK9ERRY TOWNSHIP
17
HOWARD T O W N S H I P
17
LABETTE TOWNSHIP
17
LIBERTY TOWNSHIP
17
MONTANA TOWNSHIP
17
M O U N D VALLEY T O W N S H I P
17
NEOSHO TOWNSHIP
17
OSAGE T O W N S H I P
17
OSWEGO TOWNSHIP
17
RICHLAND TOWNSHIP
17
RENO T O W N S H I P
17
PAXTCN TOWNSHI"
17
FAIRPLAY TOWNSHIP
17
O K E T O TOrfNSHIP
17
T O W N S H I P NO 9
17
T O W N S H I P NO 5
17
ADAMS TOWNSHIP
17
CAPIOMA TOWNSHIP
17
CENTER TOWNSHIP
17
C L E A R CREEK T O W N S H I P
17
OILMAN TOKNSHIP
0F
THE TREASURY
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
TITLE
GRANADA T O W N S H I P
HARRISON TOWNSHIP
HOME T O W N S H I P
ILLINOIS TOWNSHIP
MARION T O W N S H I P
NEUCHATEL T O W N S H I P
REILLY T O W N S H I P
RICHMOND TOWNSHIP
RCCK CREEK T O W N S H I P
WETMORE TOWNSHIP
HIGHPOINT TOWNSHIP
JACKSON TOWNSHIP
HENRY T O W N S H I P
VALVEROE T O W N S H I P
ALMA T O W N S H I P
KAW TOWNSHIP
CLIFTON TOWNSHIP
DUCK CREEK T O W N S H I P
F A L L RIVER T O W N S H I P
LIBERTY TOWNSHIP
TCRONTO TOWNSHIP
STATE = 17: 205 RECORDS
PAGE
OF THE
TREASURY
69
05/23/78 AT 31:25
U.S. D E P A R T M E N T
OF
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
16
BRACKEN COUNTY
18
BUTLER COUNTY
18
CALDWELL COUNTY
18
CAMPBELL COUNTY
18
CARLISLE COUNTY
18
FLEMING COUNTY
18
FULTON COUNTY
18
GALLATIN COUNTY
18
GARRARD COUNTY
18
GREEN COUNTY
18
JACKSON COUNTY
18
LEE COUNTY
18
LEWIS COUNTY
18
LINCOLN COUNTY
18
LOGAN COUNTY
16
MARION COUNTY
18
MARSHALL C O U N T Y
18
MCNROE COUNTY
16
MORGAN COUNTY
18
NELSON COUNTY
18
OWSLEY COUNTY
18
ROBERTSON COUNTY
18
SPENCER COUNTY
13
WASHINGTON C O U N T Y
18
AUGUSTA CITY
18
BROOKSVILLE CITY
18
FOSTER CITY
16
MORGANTOWN C I T Y
18
FREOONIA CITY
18
PRINCETON CITY
18
BELLEVUE CITY
18
CALIFORNIA CITY
16
CRtSTVIEW CITY
18
DAYTON CITY
18
HIGHLAND H E I G H T S CITY
18
NEWPORT CITY
18
SILVER GROVE C I T Y
18
SCUTHGATE CITY
18
WILDER CITY
18
MELBOURNE CITY
18
ARLINGTON CITY
18
BARDWELL CITY
18
FULTON CITY
18
HICKMAN CITY
18
WARSAW CITY
18
GLENCOE CITY
THE
TREASURY
PAGE
0 5 / 2 3/78 AT 3 1 : 2 5
U.S. DEPARTMENT
DISTRESSED
AREA
(ELIGIBLE
STATE
18
18
18
18
18
16
18
18
18
13
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
16
18
OF THE
ELIGIBILITY
GOVERNMENTS)
TITLE
L A N C A S T E R CITY
C A M P B E L L S B URG C I T Y
E M I N E N C E C ITY
SMITHFIELD CITY
C O L U M B U S C ITY
MC K E E CIT Y
B R O M L E Y CI TY
C C V I N G T C N CITY
L U D L O W CIT Y
V A N C E B U R G CI TY
TCLLESBORO CITY
CRAB ORCHA RD C I T Y
H U S T O M V I L L E CITY
S T A N F O R D C ITY
A U B U R N CIT Y
R U S S E L L V I L LE- C I T Y
B R A D F O R D S V ILLE C I T Y
L G R E T T O CI TY
B E N T O N CIT Y
H A R D I N CIT Y
C A L V E R T CI TY
TCMPKINSVI LLC CITY
G A M A L I E L C ITY
BLOOMFIELD CITY
NEW HAVEN C I T Y
F A I R F I E L D CI TY
CLAY CITY CI TY
MOUNT OLIV ET C I T Y
JAMESTOWN CI TY
R U S S E L L SP R I N G S C I T Y
T A Y L O R S V I L LE C I T Y
MACKVILLE CITY
WILLIS8URG CITY
S T A T E = 18:
79
TREASURY
RECORDS
TE»ST
71
PAGE
05/23/78
A
Jj;S^PARTM£NT
OF
THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
TITLE
ALLEN PARISH
AVOYELLES PARISH
BIENVILLE PARISH
CADDO PARISH
CALCASIEU PARISH
CATAHOULA PARISH
CLAIBORNE PARISH
CONCORDIA PARISH
OE SCTO PARISH
EAST CARROLL PARISH
EAST FELICIANA PARISH
EVANGELINE PARISH
FRANKLIN PARISH
IBERVILLE PARISH P O L I C L JURY
JACKSON PARISH POLICL JURY
JEFFERSON DAVIS PARISH
MADISON PARISH POLICE JURY
MCREHCUSE PARISH
NATCHITOCHES P A R I S H
PCINTE COUPEE PARISH
RAPIDES PARISH
RED RIVER PARISH
RICHLANO PARISH
ST JAMES PARISH
ST LANDRY PARISH
TANGIPAHOA PARISH
TENSAS PARISH
VERNON PARISH
WASHINGTON PARISH
xEBSTER PARISH
WEST CARROLL PARISH
WEST FELICIANA P A R I S H
WINN PARISH
KINDER TOWN
OAKDALE CITY
OBERLIN CITY
REEVES VILLAGE
ELIZABETH TOWN
OONALDSONVILLE C I T Y
SCRRENTC VILLAGE
BUNKIE TOWN
HESSMER VILLAGE
MARKSVILLE TOwN
MOREAUVILLE VILLAGE
PLAUCHEVILLE V I L L A G E
SIMMESPORT TCWN
TREASURY
72
05/23/78
AT 3 1 : 2 5
U.S. D E P A R T M E N T
PAGE
OF
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
19 ARCADIA TOWN
19
8IENVILLE VILLAGE
19
G I B S L A N D TflWN
19
RINGGOLD TOWN
19
SALINE VILLAGE
19
BRYCELAND VILLAGE
19
CASTOR VILLAGE
19
MOUNT L E B A N O N TCWN
19
JAMESTOWN VILLAGE
19
LUCKY VILLAGE
19
M C O R I N G S P O R T TOWN
19
OIL CITY TOWN
19
SHREVEPORT CITY
19
V I V I A N TOWN
19
BLANCHARD VILLAGE
19
BELCHER VILLAGE
19
G I L L I A M TOWN
19
H C S S T O N TOWN
19
IDA TOWN
19
RCOESSA TCWN
19
DE OUINCY C I T Y
19
LAKE C H A R L E S C I T Y
19
V I N T O N TOWN
19
WESTLAKE TOWN
19
CLARKS VILLAGE
19
HARRISONBURG VILLAGE
19
J C N E S V I L L E TOWN
19
S I C I L Y ISLAND V I L L A G E
19
ATHENS VILLAGE
19
H A Y N E S V I L L E TOWN
19
H O M E R TOWN
19
LISBON VILLAGE
19
CLAYTON VILLAGE
19
FERRIOAY TOWN
19
V I O A L I A TCWN
19
R I D G E C R E S T TOWN
19
L O G A N S P O R T TOWN
19
MANSFIELD CITY
19
SOUTH MANSFIELD VILLAGE
19
STANLEY VILLAGE
19
STONEWALL VILLAGE
19
LAKE P R O V I D E N C E TOWN
19
C L I N T O N TOWN
19
J A C K S O N TOWN
19
NORWOOD V I L L A G E
19
WILSON V I L L A G E
THE
TREASURY
73
05/2 3/78 AT 31:25
U.S. D E P A R T M E N T
PAGE
OF
DISTRESSED AREA ELIGIBILITY FEIST
(ELIGIBLE GOVERNMENTS)
STATE
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
TITLE
BASILE TOWN
MAMOU TOWN
VILLE PLATTE TOWN
TURKEY CREEK VILLAGE
PINE PRAIRIE VILLAGE
CHATAIGNIER VILLAGE
GILBERT VILLAGE
WINNSBORO TOWN
WISNER TOWN
BASKIN VILLAGE
CCLFAX TOWN
DRY PRONG VILLAGE
GEORGETOWN VILLAGE
MCNTGCNERY TOWN
POLLOCK TOWN
MARINGOUIN TOWN
PLAQUEMINE TOWN
CHATHMAN TOWN
HODGE VILLAGE
JCNESBORO TOWN
NORTH HODGE VILLAGE
EAST HODaE TOWN
ELTON TOWN
FENTON VILLAGE
JENNINGS CITY
LAKE ARTHUR TOWN
WELSH TOWN
LIVINGSTON VILLAGE
WALKER TOWN
FRENCH SETTLEMENT VILLAGE
OELTA VILLAGE
MOUND VILLAGE
TALLULAH VILLAGE
RICHMOND VILLAGE
8ASTR0P CITY
BCNITA VILLAGE
CCLLINSTON VILLAGE
MER ROUGE VILLAGE
OAK RIDGE VILLAGE
CAMPTI VILLAGE
CLARENCE VILLAGE
GOLCONNA VILLAGE
NATCHITOCHES CITY
PROVENCAL VILLAGE
RCBELINE VILLAGE
ASHLAND TOWN
THE
TREASJRY
74
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
19 POWHATAN TOWN
STATE = 19: 139 RECORDS
PAGE 75
TREASURY
PAGE 76
05/23/78 ^
s 2
5
D
£ p A R T M E N T
0F
T HE
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE
TITLE
19 NATCHEZ VILLAGE
STATE = 19* 1 RECORDS
TREASURY
05/2 3/78 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED
AREA
(ELIGIBLE
STATE
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
TITLE
NEW O R L E A N S CITY
NEW ROADS TOWN
FORDOCHE VILLAGE
ALEXANDRIA CITY
BOYCE TOWN
C H E N E Y V I L L E TOWN
FOREST HILL V I L L A G E
GLENMORA TOWN
LECOMPTE TOWN
WOOOWORTH V I L L A G E
CCUSHATTA TOWN
EDGEFIELD V I L L A G E
MARTIN VILLAGE
DELHI TOWN
MANGHAM TOWN
RAYVILLE TOWN
GRAMERCY TOWN
LUTCHER TOWN
GRAND COTEAU TOWN
KROTZ SPRINGS V I L L A G E
LEONVILLE VILLAGE
MELVILLE T O W N
OPELOUSAS CITY
PALMETTO VILLAGE
PCRT BARRE TOWN
SUNSET TOWN
WASHINGTON TOWN
CANKTON V I L L A G E
MADISCNVILLE TOWN
SUN VILLAGE
A M T E CITY TOW*
HAMMOND CITY
INDEPENDENCE TOWN
K E N T W O O O TOWN
PONCHATOULA TOWN
RCSELAND TOWN
TICKFAW V I L L A G E
TANGIPAHOA V I L L A G E
WOODHAVEN V I L L A G E
NEWELLTON TOWN
ST JOSEPH TOWN
WATERPROOF TOWM
HORNBECK TOWN
LEESVILLE TOWN
NEWLLANO V I L L A G E
RCSEPINE V I L L A G E
PAGE 77
OF THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
FE'ST
P A G E 78.
05/23/78 AT n « « M R T M E N T
op
TH£
TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE
STATE
GOVERNMENTS)
TITLE
19 SIMPSON VILL AGE
19 ANGIE VILLAG E
19 BCGALUSA CIT Y
19 FRANKLINTON TOWN
19 VARNADO VILL ACE
19 COTTON VALLE Y TOWN
19 CULLEN TOWN GE
19 HEFLIN VILLA
19 MINDEN CITY ACE
19 SAREPTA VILL ITY
19 SPRINGHILL C LLAGE
19 DIXIE INN VI LLAGE
19 SHONGALOO VI LLAGE
19 EPPS VILLAGE WN
19 KILBOURNE VI AGE
19 CAK GROVE TO GE
19 PIONEER VILL LLE TOWN
19 FOREST VILLA GE
19 ST FRANCISVI E
19 DCOSON VILLA TY
19 STATE
SIKES= 19:
VILLAGb 8 RECORDS
19 WINNFIELD CI
—
£
05/2 3/78 AT 31:25
U.S. DEPARTMENT
DISTRESSED
OF THE
TREASURY
AREA ELIGIBILITY TE«ST
(ELIGIBLE
STATE
PAGE 79.
TITLE
20
ANDROSCOGGIN COUNTY
20
AROOSTOOK COUNTY
20
KENNEBEC COUNTY
20
LINCOLN COUNTY
20
OXFORD COUNTY
20
PENOBSCOT COUNTY
20
PISCATAQUIS COUNTY
20
SAGADAHOC COUNTY
20
SCMERSET COUNTY
20
WALDO COUNTY
20
AUBURN CITY
20, LEWISTON CITY
20
PRESQUE ISLE CITY
20
CARIBOU CITY
20
PORTLAND CITY
20
SCUTH PORTLAND CITY
20
WESTBROO< CITY
20
AUGUSTA CITY
20
GARDINER CITY
20
HALLOWELL CITY
20
WATERVILLE CITY
20
RCCKLANO CITY
20
BANGOP CITY
20
BFEWER CITY
20
OLD TCWN CITY
20
BATH CITY
20
BELFAST CITY
20
CALAIS CITY
20
EASTPORT CITY
20
BIDDEFORD CITY
20
DURHAM TOWN
20
GREENE TCWN
20
LEEDS TOWN
20
LISBON TOWN
20
LIVERMORE TOWN
20
LIVERMORE FALLS TOWN
20
TURNER TOWNSHIP
20
WALES TO*N
20
SABATTUS TOWN
20
ALLAGASH PLANTATION
20
AMITY TOWN
20
ASHLANO TOWN
dO
BANCROFT TOWN
20
BLAINE TOWN
20
BRIDGEWATER TOWN
20
CARY PLANTATION
GOVERNMENTS)
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
20 CASTLE HILL TOWN
20
CASWELL PLANTATION
20
CHAPMAN TOWN
20
C R Y S T A L TOWN
20
CYR PLANTATION
20
DYER BROOK TOWN
20
E PLANTATION
20
EAGLE LAKE TOWN
20
E A S T O N TOWN
20
FORT F A I R F I E L D T O W N
20
FORT KENT TOWN
20
F R E N C H V I L L E TOWN
20
GARFIELD P L A N T A T I O N
20
GLENWOOD PLANTATION
20
GRAND ISLE TOWN
20
HAMLIN TOWN
20
HAMMOND P L A N T A T I O N
20
H A Y N E S V I L L E TOWN
20
HCDGDCN TOWN
20
H C U L T O N TOWN
20
LIMESTONE TOWN
20
L I N N E U S TOWM
20
LITTLETON TOWN
20
LUDLOW TOWN
20
MACWAHOC P L A N T A T I O N
20
MADAWASKA TOWN
20
MARS HILL TOWN
20
MASARDIS TOWN
20
MCNTICELLO TOWN
20
MCRC P L A N T A T I O N
20
NEW CANADA P L A N T A T I O N
20
NEW LIMERICK TOWN
20
NEW SWEDEN TOWN
20
O A K F I E L D TOWN
20
ORIENT TOWN
20
OXBOW PLANTATION
20
PERHAM TOWN
20
REED PLANTATION
20
ST AGATHA TOWN
20
ST FRANCIS TOWN
20
ST JOHN P L A N T A T I O N
20
STOCKHOLM TOWN
20
VAN BUREN TOwN
20
WADE TOWN
20
WALLAGRASS PLANTATION
20
W A S H B U R N TOWN
PAGE
OF THE
TREASURY
80
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
PAGE
OF
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
20 WESTFIELD TOWN
20
WESTMANLAND PLANTATION
20
W E S T O N TOWN
20
WINTERVILLE PLANTATION
20
W O O D L A N D TOWN
20
BRUNSWICK TOWN
20
C A P E E L I Z A 3 E T H TOWN
20
H A R P S W E L L TOWN
20
E U S T I S TOWN
20
I N D U S T R Y TOWN
20
MADRID TOWN
20
RANGELEY P L A N T A T I O N
20
RANGELEY T O W N
20
STRONG TOWN
20
WILTON TOWN
20
C A R R A B A S S E T T V A L L E Y TOWN
20
A t H E R S T TOWN
20
BAR HARBOR TCWN
20
O R L A N D TOWN
20
GREAT POND P L A N T A T I O N
20
S T O N I N G T O N TOWN
20
SULLIVAN TOWN
20
BENTON TOWN
20
C H E L S E A TOWN
20
F A R M I N G C A L E TOWN
20
F A Y E T T E TOWN
20
L I T C H F I E L D TOWN
20
MONMOUTH TOWN
20
P I T T S T O N TOWN
20
R A N D O L P H TOWN
20
WAYNE TOWN
20
WEST G A R D I N E R TOWN
20
W I N D S O R TOWN
20
ALNA T O W N S H I P
20
B C O T H B A Y TOWN
20
B G O T H B A Y H A R B O R TOWN
20
B R E M E N TOWN
20
DRESDEN TOWN
20
E D G E C O M B TOWN
20
NEWCASTLE TOWN
20
N O B L E B O R O U G H TOWN
20
SOMERVILLE TOWN
20
S C U T H B R I S T O L TOWN
20
SCUTHPORT TOWN
20
WESTPORT I S L A N D TOWN
20
WHITEFIELD TOWN
THE
TREASURY
81
0 5 / 2 3 / 7 8 AT 31:25
U.S. D E P A R T M E N T
OF THE
^t
TREASURY
PAG
^
82
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
20 WISCASSET TOWN
20
ANDOVER TOWN
20
BETHEL TOWN
20
BROWNFIELD TOWN
20
BUCKFIELD TOWN
20
BYRON TOWN
20
CANTON TOWN
20
DENMARK TOWN
20
DIXFIELD TOWN
20
FRYEBURC TOWN
20
GILEAD TOWN
20
GREENW003 TOWN
20
HANOVER TOWN
20
HARTFORD TOWN
20
HEBRON TOWN
20
HIRAM TOWN
20
LINCOLN PLANTATION
20
LCVELL TOWN
20
MAGALLOWAY P L A N T A T I O N
20
MEXICO TOWN
20
NEWRY TOWN
20
NCRWAY TOWN
20
OXFORD TOWN
20
PARIS TOWN
20
PERU TOWN
20
PORTER TOWN
20
RCXBURY TOWN
20
RUMFORD TOWN
20
STONEHAM TOWN
20
STOW TOWN
20
SUMNER TOWN
20
SWEDEN TOWN
20
UPTON TOWN
20
WATERF0R3 TOWN
20
WCODSTOCK TOWN
20
WEST PARIS TOWN
20
BRADFORD TOWN
20
BURLINGTON TOWN
20
CARMEL TOWN
20
CHARLESTON TOWN
20
CHESTER TOWN
20
CORINNA TOWN
20
CORINTH TOWN
20
OEXTER TOWN
20
DIXMONT TOWN
20
DREW PLANTATION
^mm
\
05/2 3/73 AT 3 1 : 2 5
U.S. D E P A R T M E N T OF
DISTRESSED
AREA
(ELIGIBLE
STATE
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
PAGE
THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TITLE
E D O I N G T C N TOWN
E N F I E L D TOWN
ETNA TOWN
EXETER TOWN
G A R L A N D TOWN
GLENBURN TOWN
GRAND FALLS PLANTATION
HERMON TOWN
H O L D E N TOWN
H C W L A N D TOWN
HUDSON TOWN
K E N D U S K E A G TOWN
LAKEVILLE PLANTATION
LEE TOWN
LEVANT TOWN
L I N C O L N TOWN
LOWELL TOWN
MATTAWAMKEAG TOWN
MAXFIELD TOrfN
NEWBURGH TOWN
NEWPORT TOWN
ORONO TOWN
O R R I N G T O N TOWN
PASSADUMKEAG TOWN
PATTEN TOWN
P L Y M O U T H TOWN
PRENTISS PLANTATION
SEBOEIS PLANTATION
S P R I N G F I E L D TOWN
STETSON TOWN
VEAZIE TOWN
WE3STER PLANTATION
WINN TOWN
W O O D V I L L E TOWN
CARROLL PLANTATION
ABBOT TOWN
ATKINSON TOWN
BARNARD P L A N T A T I O N
BLANCHARD P L A N T A T I O N
BCWERBANK TOWN
BROWNVILLE TOWN
DOVER F O X C R O F T TOWN
ELLIOTTSVILLE PLANTATION
GREENVILLE TOWN
GUILFORD TOWN
KINGSEURY PLANTATION
TEST
83
0 5 / 2 3 / 7 8 AT 31:25
U.S. D E P A R T M E N T OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
TITLE
LAKE VIEW P L A N T A T I O N
MILO TOWN
MCNSON TOWN
PARKMAN TOWN
SANGERVILLE TOWN
SEBEC TOWN
SHIRLEY TOWN
WELLINGTON TOWM
WILLMANTIC TOWN
MEDFORD TOWN
BEAVER COVE PLANTATION
ARROWSIC TOWN
BCWDOIN TOWN
8GWD0INHAM TOWN
GEORGETOWN
PHIPPSBURG TOWN
RICHMOND TOWN
TCPSHAM TOWN
WEST BATH TOWN
WOOLWICH TOWN
ANSON TOWN
ATHENS TOWN
BINGHAM TOWN
BRIGHTON P L A N T A T I O N
CAMBRIDGE TOWN
CANAAN TOWN
CARATUNK P L A N T A T I O N
CORNVILLE TOWN
DENNISTOWN P L A N T A T I O N
OETROIT TCWN
EHBDEN TOWN
FAIRFIELD TOWN
HARMONY TOWN
HARTLAND TOWN
HIGHLAND PLANTATION
JACKMAN TOWN
MADISCN TOWN
MOOSE RIVER TOWN
NEW PORTLAND TOWN
NCRRIDGEWCCK TOWN
PALMYRA TOWN
PITTSFIELD TOWN
PLEASANT RIDGE PL
MERCER TOWN
RIPLEY TOWN
ST ALBANS TCWN
p
A G E 84
05/2 3/78 AT 31:25
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
SKOWHEGAN TOWN
SMITHFIELD TOWN
SOLON TOWN
S T A R K S TOWN
THE FORKS P L A N T A T I O N
WEST FORKS P L A N T A T I O N
8 E L M 0 N T TOWN
B R O O K S TOWN
BURNHAM TOWN
FRANKFORT TOWN
F R E E D O M TOWN
ISLESBORO TOWN
J A C K S O N TOWN
KNOX TOWN
LIBERTY TOWN
L I N C O L N V I L L E TOWN
MONROE TOWN
MCNTVILLE TOWN
MORRILL TOWN
NORTHPORT TOWN
PALERMO TOWN
PROSPECT TOWN
SEARSMONT TOWN
SEARSPORT TOWN
S T O C K T O N S P R I N G S TOWN
SWANVILLE TOWN
THORNDIKE TOWN
TROY TOWN
UNITY-TCWN
WALDO TOWN
WINTERPORT TOWN
COOYVILLE P L A N T A T I O N
CRAWFORD TOWN
CUTLER TOWN
LUBEC TOWN
MACHIASPORT TOWN
MILBRIDGE TOWN
NORTHFIELD TOWN
TALMADGE TOWN
WHITING TOWN
WHITNEYVILLEi TOWN
ACTON TOWN
ALFRED TOWN
BUXTON TOWN
CCRNISH TOWN
DAYTON TOWN
PAGE 85
OF THE
TREASURY
05/2 3/78 AT 31:25
U.S. DEPARTMENT
DISTRESSED
OF THE
TREASURY
AREA ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE TITLE
20 HCLLIS TOWN
20
KENNEBUNKPORT TOWN
20
LEBANON TOWN
20
LIMERICK TOWN
20
LIMINGTON TOWN
20
LYMAN TOWN
20
NEWFIELD TOWN
20
NCRTH BERWICK TOWN
20
ARUNDEL TOWN
20
OLD ORCHARD BEACH TCWN
20
PARSONSFIELO TOWN
20
SANFORD TOWN
20
SHAPLEIGH TOWN
20
WATERBCR3 TOWN
STATE = 20: 33b RECORDS
PAGE 8b
TEST
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. DEPARTMENT
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
21 ALLEGANY COUNTY
21
CAROLINE COUNTY
21
C E C I L COUNTY
21
DCRCHESTER COUNTY
21
KENT COUNTY
21
SOMERSET COUNTY
21
WASHINGTON COUNTY
21
B A R T O N TOWN
21
CUMBERLAND CITY
21
FROSTBURG CITY
21
LCNACONING TOWN
21
LUKE TOWN
21
MIOLANO TOWN
21
W E S T E R N P O R T TOWN
21
BALTIMORE CITY
21
FE0ERALS3URG TOWN
21
G C L D S B O R O TOWN
21
G R E E N S B O R O TOWN
21
H E N O E R S O N TOWN
21
H I L L S B O R O TOWN
21
MARYOEL TOWN
21
RIDGELY TOWN
21
TANEYTOWM C I T Y
21
C E C I L T O N TOWN
21
C H A R L E S T O W N TOWN
21
C H E S A P E A K E C I T Y TOWN
21
E L K T C N TOWN
21
NORTH EAST TOWN
21
PERRYVILLE TOWN
21
PCRT D E P O S I T TOWN
21
BROOKVIEW TOWN
21
CAMBRIDGE CITY
21
EAST NEW MARKE T TOWN
21
E L D O R A D O TOWN
21
G A L E S T O W N TOWN
21
HURLOCK TOWN
21
SECRETARY TCWN
21
VIENNA TOWN
21
B U R K I T T S V I L L E TOWN
21
DEER PARK TCWN
21
FRIENDSVILLEi TOWN
21
K I T Z M I L L E R V I L L E TOWN
21
O A K L A N D TOWN
21
8 E T T E R T 0 N TOWN
21
C H E S T E R T O W N TOWN
21
GALENA TOWN
PAGE
OF
THE
TREASURY
87
05/23/78 AT 31:25
U.S. DEPARTMENT
DISTRESSED AREA
(ELIGIBLE GOVERNMENTS)
STATE TITLE
21 ROCK HAL. TOWN
21
BARCLAY TOWN
21
CENTREVILLE TOWN
21
CHURCH HILL TOWN
21
OUEENSTOWN TOWN
21
SUDLERSVILLE: TOWN
21
TEMPLEVILLE TOWN
21
CRISFIELD CITY
21
PRINCESS ANNE TOWN
21
CLEAR SPRING TOWN
21
FUNKSTOWN TOWN
21
HAGERSTOWN CITY
21
HANCOCK TOWN
21
SHARPS8URG TOWN
21
SMITHS8URG TOWN
21
WILLIAMSPORT TOWN
21
DELMAR TOWN
21
FRUITLAND TOWN
21
HEBRON TOWN
21
MARDELA SPRINGS TOWN
21
PITTSVILLE TOWN
21
SALISBURY CITY
21
SHARPTOWN TOWN
21
BERLIN TOWN
21
PCCOMOKE CITY
21
SNOW HILL TOWN
ST ATE = 21: 72 RECORDS
PAGE 88
OF THE
TREASURY
ELIGIBILITY TE'ST
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
22 BERKSHIRE COUNTY
22
BRISTOL COUNTY
22
ESSEX COUNTY
22
FRANKLIN COUNTY
22
HAMPDEN C O U N T Y
22
MIDOLESEX C O U N T Y
22
WORCESTER C O U N T Y
22
NCRTH ADAMS CITY
22
PITTSFIELD C I T Y
22
ATTLEBORO CITY
22
FALL RIVER C I T Y
22
NEW BEDFORD CITY
22
TAUNTON CITY
22
B E V E R L Y CITY
22
GLOUCESTER CITY
22
HAVERHILL CITY
ZZ
LAWRENCE CITY
22
LYNN CITY
22
NEWBURYPORT CITY
22
PEA30DY CITY
22
SALEM CITY
22
CHICOPEE CITY
22
H O L Y O K E CITY
22
S P R I N G F I E L D CITY
22
NCRTHAMPTCN CITY
22
CAMBRIDGE CITY
22
EVERETT CITY
22
LOWELL CITY
22
MALDEN CITY
22
MEDFORD CITY
22
MELROSE CITY
22
SOMERVILLE C I T Y
22
WALTHAM CITY
22
WOBURN CITY
22
OUINCY CITY
22
BOSTON CITY
22
CHELSEA CITY
22
REVERE CITY
22
FITCHBURG CITY
22
GARDNER CITY
22
WORCESTER CITY
22
BOURNE TOWN
22
ADAMS TOWN
22
CLARKSBURG TOWN
22
LEE TOWN
22
LENOX TOWN
PAGE
OF THE
TREASURY
89
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE 90
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
TITLE
ACUSHNET TOWN
BERKLEY TOWN
OARTMOUTH TOWN
DIGHTON TOWN
FAIRHAVEN TOWN
FREETOWN TOWN
NCRTH ATTLE30R0UGH TOWN
NORTON TOWN
RAYNHAM TOWN
REHOBOTH TOWN
SEEKONK TOWN
SOMERSET TOWN
WESTPCRT TOWN
AMESBURY TOWN
DANVERS TOWN
GROVELAND TOWN
MERRIMAC TOWN
METHUEN TOWN
MIDDLETON TO»N
NAHANT TOWN
NCRTH ANDOVER TOWN
SALISBURY TOWN
SAUGUS TOWN
ASHFIELD TOWN
BUCKLANO T3WN
CCLRAIN TOWN
ERVING TOWN
GREENFIELD TOWN
LEVERETT TOWN
LEYDEN TOWN
MONROE TOWN
MONTAGUE TOWN
NORTHFIELD TOWN
ORANGE TOWN
WENDELL TOWN
AGAWAM TOWN
BRIMFIELO TOWN
EAST LQNGMEAOOW TOWN
GRANVILLE TOWN
HAMPDEN TOWN
HOLLAND TOWN
LUOLOW TOWN
MONSON TOWN
PALMER TOWN
WEST SPRINGFIELD TOWN
GRANBY TOWN
TREASURY
0 5 / 2 3 / 7 8 AT 31:25
U.S. D E P A R T M E N T OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
22
ZZ
22
22
22
22
22
22
22
22
22
22
TITLE
S C U T H H A D L E Y TOWN
WARE TOWN
W I L L I A M S 3 U R G TOWN
ASHBY T O W N S H I P
A S H L A N D TOWN
AYER TOWN
S H I R L E Y TOWN
STONEHAM TOWN
W A K E F I E L 3 TOWN
WATERTOWN TOWN
W I L M I N G T O N TOWN
AVON TOWN
BELLINGHAM TOWN
DEOHAM TOWN
F 0 X B 0 R 0 U 3 H TOWN
F R A N K L I N TOWN
HCLBROOK TOWN
MEDWAY TOWN
WALPOLE TOWN
WEYMOUTH TOWN
W R E N T H A M TOWN
H A N O V E R TOWN
H A N S O N TOWN
HULL TOWN
K I N G S T O N TOWN
L A K E V I L L E TOWN
MARION TOWN
MARSHFIELO TOWN
M A T T A P O I S E T T TOWN
M I D D L E B O R O U G H TOWN
P E M B R O K E TOWN
ROCHESTER TOWN
R O C K L A N D TOWN
SCITUATE TOWN
WINTHROP TOWN
ASHBURNHAM TOWN
ATHCL TOWN
BARRE TOWN
B L A C K S T C N E TOWN
C L I N T O N TCWN
DUDLEY TOWN
HARDWICK TOWN
HARVARD TOWN
H C P E D A L E TOWN
LANCASTER TOWN
L U N E N B U R i TOWN
05/2 3/78 A T ^ 3 i : 2 5 p A R T M E N T
DISTRESSED AREA ELIGIBILITY TE*ST
(ELIGIBLE GOVERNMENTS)
STATE
22
22
22
22
22
22
22
22
ZZ
22
TITLE
MILLVILLE TOWN
N O R T H B R I D G E TOWM
P H I L L I P S T O N TOWN
ROYALSTON TOwN
S C U T H B R I D G E TOWN
T E M P L E T O N TOWN
UXBRIDGE TOWN
WARREN TOWN
W E B S T E R TOWN
W I N C H E N D O N TOWN
STATE = 22: 1^8 RECORDS
^
^
^
^
PAGE
92
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
23 ALGER COUNTY
23
ALLEGAN COUNTY
23
BARAGA C O U N T Y
23
BARRY COUNTY
23
BAY COUNTY
23
BERRIEN C O U N T Y
23
BRANCH COUNTY
23
CALHOUN COUNTY
23
C A S S COUNTY
23
GENESEE COUNTY
23
G L A D W I N COUNTY
23
G O G E B I C COUNTY
23
GRATIOT COUNTY
23
HOUGHTON COUNTY
23
HURON COUNTY
23
INGHAM COUNTY
23
IONIA COUNTY
23
IRON COUNTY
23
JACKSON COUNTY
23
KEWEENAW C O U N T Y
23
LAPEER COUNTY
23
LENAWEE COUNTY
23
LUCE COUNTY
23
MANISTEE C O U N T Y
23
MENOMINEE COUNTY
23
MIDLAND COUNTY
23
MONTCALM C O U N T Y
23
MUSKEGON C O U N T Y
23
OCEANA C O U N T Y
23
ONTONAGON COUNTY
23
PRESQUE ISLE C O U N T Y
23
ST CLAIR C O U N T Y
23
ST JOSEPH C O U N T Y
23
SCHOOLCRAFT C O U N T Y
23
SHIAWASSEE C O U N T Y
23
WAYNE COUNTY
23
MUNISING C I T Y
23
ALLEGAN CITY
23
D C U G L A S VILLAGE
23
F E N N V I L L E CITY
Zl
H O P K I N S VILLAGE
23
MARTIN VILLAGE
23
PLAINWELL CITY
23
SAUGATUCK V I L L A G E
23
WAYLAND CITY
23
CENTRAL LAKE V I L L A G E
PAGE
OF
THE
TREASURY
93
PAGE
05/23/78
^U.SIIEPARTMENT
OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
TITLE
BARAGA V I L L A G E
LANSE V I L L A G E
FREEPORT VILLAGE
HASTINGS CITY
MIODLEVILLE VILLAGE
NASHVILLE V I L L A G E
WOODLAND VILLAGE
BAY CITY
ELBERTA V I L L A G E
THOMPSONVILLE VILLAGE
B E N T O N H A R B O R CITY
BERRIEN SPRINGS VILLAGE
BRIDGMAN C I T Y
BUCHANAN C I T Y
COLOMA CITY
EAU CLAIRE V I L L A G E
GALIEN V I L L A G E
MICHIANA V I L L A G E
NEW BUFFALO CITY
N I L E S CITY
ST JOSEPH CITY
STEVENSVILLE VILLAGE
THREE OAKS V I L L A G E
WATERVLIET C I T Y
B R O N S O N CITY
C G L D W A T E R CITY
AL3I0N CITY
ATHENS VILLAGE
B A T T L E CREEK C I T Y
8URLINGT0N VILLAGE
HOMER V I L L A G E
MARSHALL C I T Y
S P R I N G F I E L D CITY
TEKONSHA VILLAGE
CASSOPOLIS VILLAGE
DOWAGIAC CITY
MARCELLUS V I L L A G E
8GYNE F A L L S V I L L A G E
CHARLEVOIX CITY
C H E B O Y G A N CITY
SAULT SAINTE MARIE CITY
GRAYLING CITY
ESCANAOA CITY
GLADSTONE CITY
NORWAY CITY
PETOSKEY CITY
94
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED
AREA
PAGE
OF
23
Z3
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
ZZ
23
23
Zl
23
23
23
23
23
23
23
23
23
23
23
23
23
23
Zl
23
23
23
23
23
23
23
23
TITLE
C L I O CITY
O A V I S O N CITY
F E N T O N CITY
F L I N T CITY
FLUSHING CITY
MCNTROSE VILLAGE
MCUNT M O R R I S C I T Y
OTISVILLE VILLAGE
S W A R T Z CREEK C I T Y
B U R T O N CITY
BEAVERTON CITY
G L A D W I N CITY
BESSEMER CITY
IRONWOOD C I T Y
WAKEFIELD CITY
ALMA CITY
ASHLEY VILLAGE
PERRINTON VILLAGE
ST L O U I S C I T Y
ALLEN VILLAGE
HILLSDALE CITY
WALDRON VIuLAGE
CALUMET VILLAGE
C O P P E R CITY V I L L A G E
HANCOCK CITY
HOUGHTON CITY
LAKE L I N D E N V I L L A G E
LAURIUM VILLAGE
S O U T H RANGE V I L L A G E
BAD AXE CITY
CASEVILLE VILLAGE
ELKTON VILLAGE
H A P B O R BEACH C I T Y
KINDE V I L L A G E
PIGEON VILLAGE
PORT A U S T I N V I L L A G E
PORT HOPE V I L L A G E
SEBEWAINi VILLAGE
UBLY V I L L A G E
L A N S I N G CITY
CLARKSVILLE VILLAGE
HU8BARDST0N VILLAGE
IONIA CITY
MUIR V I L L A G E
PEWAMC V I L L A G E
ALPHA V I L L A G E
TREASURY
ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE
THE
TEST
95
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. DEPARTMENT
DISTRESSED
AREA
(ELIGIBLE
STATE
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
Zl
23
23
23
Zl
23
23
23
23
23
23
23
23
23
23
23
Zl
23
23
TITLE
CASPIAN CITY
CRYSTAL FALLS CITY
GAASTPA CITY
IRON RIVER C I T Y
STAMBAUGH CITY
BROOKLYN VILLAGE
CCNCORO VILLAGE
G R A S S LAKE V I L L A G E
HANOVER VILLAGE
J A C K S O N CITY
PARMA V I L L A G E
SPRINGPORT V I L L A G E
KALAMAZOO CITY
AHMEEK V I L L A G E
ALMONT VILLAGE
CLIFFORD VILLAGE
COLUMBIAVILLE VILLAGE
DRYDEN VILLAGE
IMLAY CITY
LAPEER CITY
METAMORA V I L L A G E
NCRTH BRANCH V I L L A G E
O T T E R LAKE V I L L A G E
ADRIAN CITY
CLAYTON VILLAGE
H U O S O N CITY
MORENCI CITY
ONSTED VILLAGE
TECUMSEH CITY
NEWBERRY VILLAGE
ST IGNACE C I T Y
ARMADA V I L L A G E
CENTER LINE CITY
E R A S E R CITY
NEW B A L T I M O R E C I T Y
NEW HAVEN V I L L A G E
RICHMOND VILLAGE
R C S E V I L L E CI TY
WARREN CITY
BEAR LAKE V I L L A G E
COPEMISH VILLAGE
EAST LAKE V I L L A G E
KALEVA V I L L A G E
MANISTEE CITY
ONEKAMA V I L L A G E
MARQUETTE CITY
PAGE
OF THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TEST
9b
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE 97
OF THE
DISTRESSED AREA ELIGIBILITY TE«ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
23 NEGAUNEE CITY
23
LUDINGTON CITY
23
MORLEY VILLAGE
23
MENOMINEE CITY
23
POWERS VILLAGE
23
STEPHENSON CITY
23
CCLEMAN CITY
23
SANFORD VILLAGE
23
LUNA PIER CITY
23
CARSON CITY
23
EDMORE VILLAGE
23
GREENVILLE CITY
23
HOWARD CITY VILLAGE
23
LAKEVIEW VILLAGE
23
MCBRIDE VILLAGE
23
PIERSON VILLAGE
23
SHERIDAN VILLAGE
23
STANTON CITY
23
FRUITPORT VILLAGE
23
MONTAGUE CITY
23
MUSKEGON CITY
23
MUSKEGON HEIGHTS CITY
23
NORTH MUSKEGON CITY
23
RAVENNA VILLAGE
23
ROOSEVELT PARK CITY
23
WHITEHALL CITY
23
LAKEWOOD CLUB VILLAGE
23
NORTON SHORES CITY
23
BERKLEY CITY
23
BINGHAM FARMS VILLAGE
23
BIRMINGHAM CITY
23
CLAWSON CITY
23
FERNDALE CITY
23
HAZEL PARK CITY
23
HOLLY VILLAGE
23
HUNTINGTON WOODS CITY
23
KEEGO HARBOR CITY
23
LAKE ORION VILLAGE
23
LEONARD VILLAGE
23
MADISON HEIGHTS CITY
23
MILFORD VILLAGE
23
ORTONVILLE VILLAGE
23
OXFORD VILLAGE
23
PLEASANT RIDGE CITY
23
PCNTIAC CITY
23
SOUTH LYON CITY
TREASURY
05/23//8 A T J l : Z 5 p A R i M E N T
QF
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
23 SYLVAN LAKE CITY
23
W A L L E D LAKE CITY
23
WOLVERINE LAKE VILLAGE
23
BEVERLY HILLS VILLAGE
23
FRANKLIN VILLAGE
23
HART CITY
23
PENTWATER V I L L A G E
23
SHELBY VILLAGE
23
WALKERVILLE VILLAGE
23
RCTH8URY VILLAGE
23
ONTONAGON VILLAGE
23
VANDERBILT V I L L A G E
23
MILLERSBURG VILLAGE
23
ONAWAY CITY
23
PCSEN V I L L A G E
23
ROGERS CITY CITY
23
SAGINAW CITY
23
ALGONAC CITY
23
CAPAC VILLAGE
23
EKMETT V I L L A G E
23
MARINE CITY
23
MARYSVILLE CITY
23
PORT HURON C I T Y
Zl
ST C L A I R C I T Y
23
YALE CITY
23
BURR OAK V I L L A G E
23
CENTREVILLE VILLAGE
23
COLON VILLAGE
23
CCNSTANTINE VILLAGE
23
MENOON VILLAGE
23
S T U R G I S CITY
23
THREE RIVERS CITY
23
W H I T E PIGEON V I L L A G E
23
CARSONVILLE VILLAGE
23
M I N D E N CITY V I L L A G E
23
PECK V I L L A G E
23
MANISTIQUE CITY
23
BANCROFT VILLAGE
23
BYRON V I L L A G E
23
C O R U N N A CITY
23
O U R A N D CITY
23
LAINGSBURG CITY
23
MGRRICE VILLAGE
23
NEW L O T H R O P V I L L A G E
23
O w O S S O CITY
23
PERRY CITY
^
„,„„„..
PA
"
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED
AREA
(ELIGIBLE
STATE
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
TITLE
VERNON V I L L A G E
G A G E T O W N V I L L A GE
BLOOMINGDALE V ILLAGE
B R E E D S V I L L E VI L L A G E
DECATUR VILLAG E
HARTFORD CITY
PAW PAW V I L L A G E
S C U T H HAVEN CI TY
YPSILANTI CITY
D E T R O I T CITY
E C O R S E CITY
G A R D E N CITY CI TY
HAMTRAMCK C I T Y
H I G H L A N D PARK CITY
I N K S T E R CITY
RIVER ROUGE CI TY
WAYNE CITY
WYANDOTTE CITY
TAYLOR CITY
R O M U L U S CITY
HARRIETTA VILL AGE
H A R R I S V I L L E TO W N S H I P
HAYNES TOWNSHI P
L I M E S T O N E TQiWN SHIP
M A T H I A S T O W N S H IP
A L L E G A N T O W N S H IP
CASCO TOWNSHIP
C H E S H I R E T O W N S HI P
CLYDE TOWNSHIP
DORR T O W N S H I P
FILLMORE TOWNS HIP
G A N G E S TOWNSHI P
G U N P L A I N T O W N S HIP
H O P K I N S TOWNSH IP
LEE T O W N S H I P
L E I G H T O N T O W N S HIP
M A N L I U S T O W N S H IP
MARTIN TOWNSHI P
M C N T E R E Y T O W N S HI P
OTSEGO TOWNSHI P
OVERISEL TOWNS HIP
SALEM T O W N S H I P
SAUGATUCK TOWN SHIP
T R O W B R I D G E TOW N S H I P
VALLEY T O W N S H I P
WATSON T O W N S H I P
PAGE
OF THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TEST
99
05/23/78
A
J^;-^pARTMENT
of
DISTRESSED AREA ELIGIBILITY TElST
(ELIGI8LE GOVERNMENTS)
STATE
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
TITLE
WAYLANO TOWNSHIP
ALPENA TOWNSHIP
MAPLE RIDGE TOWNSHIP
WILSON TOWNSHIP
KEARNEY TOWNSHIP
ADAMS TOWNSHIP
MASON TOWNSHIP
WHITNEY TOWNSHIP
ARVON TOWNSHIP
BARAGA TOWNSHIP
COVINGTON T O W N S H I P
LANSE TOWNSHIP
SPURR TOWNSHIP
ASSYRIA TOWNSHIP
BALTIMORE TOWNSHIP
BARRY TOWNSHIP
CARLTON TOWNSHIP
CASTLETON TOWNSHIP
HASTINGS T O W N S H I P
HOPE TOWNSHIP
IRVING TOWNSHIP
JOHNSTOWN T O W N S H I P
MAPLE GROVE TOWNSHIP
ORANGEVILLE TOWNSHIP
PRAIREVILLE TWP
RUTLANO TOWNSHIP
THORNAPPLE T O W N S H I P
WCODLAND T O W N S H I P
YANKEE S P R I N G S T O W N S H I P
3ANG0R TOWNSHIP
BEAVER TOWNSHIP
GARFIELD TOWNSHIP
MOUNT FOREST T O W N S H I P
PORTSMOUTH T O W N S H I P
WILLIAMS TOWNSHIP
C R Y S T A L LAKE T O W N S H I P
G I L M O R E TOWNSHIP
HOMESTEAD T O W N S H I P
JOYFIELD TOWNSHIP
WELDON TOWNSHIP
BAINBRIDGE T O W N S H I P
BENTON TOWNSHIP
BERRIEN TOWNSHIP
TOWNSHIP
COLOMA
CHIKAMING
BERTRAND
T OT WO NW SN HS IH IP P
JHE
TREASURY
PAGE100
^
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE101
OF THE
TREASURY
DISTRESSED AREA ELIGIBILITY TE'ST
(ELIGIBLE
STATE
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
Zl
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
TITLE
GALIEN TOW NSHIP
HAGAR TOWN SHIP
LAKE TOWNS HI P
LINCOLN TO WNSHIP
NEW BUFFAL 0 TOWNSHIP
NILES TOWN SHIP
ORONOKO TO WNSHIP
PIPESTONE TOWNSHIP
ST JOSEPH TOWNSHIP
SCDUS TOWN SHIP
THREE OAKS TOWNSHIP
WATERVLIET TOWNSHIP
WEESAW TOW NSHIP
ALGANSEE T OWNSHIP
BETHEL TOW NSHIP
BRONSON TO WNSHIP
8UTLER TOW NSHIP
CALIFORNIA TOWNSHIP
GILEAD TOW NSHIP
KINDERHOOK TOWNSHIP
MATTESON T OWNSHIP
UNION TOWN SHIP
ALBION TOW NSHIP
ATHENS TOW NSHIP
BATTLE CRE EK TOWNSHIP
BEDFORD TO WNSHIP
BURLINGTON TOWNSHIP
CLARENCE T OWNSHIP
CLARENDON TOVNSHIP
CONVIS TOW NSHIP
ECKFORO TO WNSHIP
EMMETT TOW NSHIP
FREDONIA T OWNSHIP
HOMER TCWN SHIP
LEE TOWNSH IP
LE ROY TOW NSHIP
MARENGO TO WNSHIP
MARSHALL T OWNSHIP
NEWTON TOW NSHIP
PENNFIELD TOWNSH IP
SHERIDAN T OWNSHIP
TEKONSHA T OWNSHIP
HOWARD TOW NSHIP
LA GRANGE TOWNSHIP
MILTON TOW NSHIP
NEWBERG TO WNSHIP
GOVERNMENTS)
„ , -,« AT ^1 -?s
05/23/78 A J j ; - ^ p
PAGE102
A R T M E N T
OF THE
TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
23 PCKAGON TOWNSHIP
23
BGYNE VALLEY T O W N S H I P
23
MELROSE TOWNSHIP
23
PEAINE TOWNSHIP
23
CHIPPEWA T O W N S H I P
23
HULBERT TOWNSHIP
23
PICKFORD TOWNSHIP
23
REODING T O W N S H I P
23
WINTERFIELD T O W N S H I P
23
BREEN TOWNSHIP
23
WEST BRANCH T O W N S H I P
23
ARGENTINE T O W N S H I P
23
ATLAS TOWNSHIP
23
CLAYTON T O W N S H I P
23
DAVISON T O W N S H I P
23
FLINT TOWNSHIP
23
FOREST TOWNSHIP
23
GAINES TOWNSHIP
23
GENESEE T O W N S H I P
23
MCNTROSE T O W N S H I P
23
MCUNT MORRIS T O W N S H I P
23
MUNDY TOWNSHIP
23
RICHFIELD T O W N S H I P
23
THETFORD T O W N S H I P
23
VIENNA T O W N S H I P
23
BEAVERTON T O W N S H I P
23
BENTLEY T O W N S H I P
23
BILLING T O W N S H I P
23
BCURRETT T O W N S H I P
23
BUCKEYE TOWNSHIP
23
BUTMAN T O W N S H I P
23
CLEMENT T O W N S H I P
23
GLAOWIN T O W N S H I P
23
GRIM TOWNSHIP
23
G R O U T TOWNSHIP
23
HAY TOWNSHIP
23
SAGE TOWNSHIP
23
SECORD T O W N S H I P
23
SHERMAN T O W N S H I P
23
TOBACCO T O W N S H I P
23
BESSEMER T O W N S H I P
23
ERWIN TOWNSHIP
23
IRONWCOD T O W N S H I P
23
MARENISCO T O W N S H I P
23
WAKEFIELD T O W N S H I P
23
WATERSMEET T O W N S H I P
^
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED
AREA
(ELIGIBLE
STATE
23
23
23
23
23
23
23
23
23
Zl
Zl
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
TITLE
LONG LAKE T O W N S H I P
ARCADA T O W N S H I P
BETHANY TOWNSHIP
ELBA T O W N S H I P
EMERSON TOWNSHIP
FULTON TOWNSHIP
HAMILTON TOWNSHIP
NEWARK T O W N S H I P
NEW HAVEN T O W N S H I P
NORTH SHADE T O W N S H I P
N C R T H STAR T O W N S H I P
PINE RIVER T O W N S H I P
SEVILLE TOWNSHIP
SUMNER T O W N S H I P
WASHINGTON TOWNSHIP
WHEELER TOWNSHIP
ADAMS TOWNSHIP
ALLEN T O W N S H I P
CAMBRIA T O W N S H I P
HILLSDALE TOWNSHIP
LITCHFIELD TOWNSHIP
RANSOM TOWNSHIP
WC0D8RID3E TOWNSHIP
WRIGHT TOWNSHIP
ADAMS TOWNSHIP
CALUMET TOWNSHIP
CHASSELL TOWNSHIP
D U N C A N TOWNSHIP
ELM RIVER T O W N S H I P
FRANKLIN TOWNSHIP
HANCOCK TOWNSHIP
LAIRD TOWNSHIP
OSCEOLA T O W N S H I P
PCRTAGE TOWNSHIP
QUINCY T O W N S H I P
SCHOOLCRAFT TOWNSHIP
STANTON TOWNSHIP
T O R C H LAKE T O W N S H I P
3INGHAM T O W N S H I P
BLOOMFIELD TOWNSHIP
BROOKFIELD TOWNSHIP
CHANDLER TOWNSHIP
COLFAX T O W N S H I P
DWIGHT T O W N S H I P
FAIRHAVEN TOWNSHIP
GORE T O W N S H I P
PAGE103
OF THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TE»ST
05/23/78
A
;^--2D5EpARTMENT
PAGE104
OF
THE
TREASURY
DISTRESSED AREA ELIGIBILITY TE»ST
(ELIGIBLE GOVERNMENTS)
STATE
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
Zl
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
TITLE
GRANT TOWNSHIP
HUME T O W N S H I P
H U R O N TOWNSHIP
LINCOLN TOWNSHIP
MCKINLEY T O W N S H I P
MEADE TOWNSHIP
PARIS TOWNSHIP
PCINTE AUX B A R Q U E S TWP
PORT AUSTIN T O W N S H I P
RUBICON T O W N S H I P
SAND BEACH T O W N S H I P
SEBEWAING T O W N S H I P
SHERIDAN T O W N S H I P
SHERMAN TOWNSHIP
S I G E L TOWNSHIP
VERONA T O W N S H I P
WINSOR TOWNSHIP
ALAIEDON TOWNSHIP
AURELIUS TOWNSHIP
BERLIN TOWNSHIP
EASTON T O W N S H I P
IONIA TOWNSHIP
KEENE TOWNSHIP
NORTH PLAINS T O W N S H I P
ORANGE TOWNSHIP
OTISCO T O W N S H I P
ALABASTER T O W N S H I P
AU SABLE T O W N S H I P
OSCODA T O W N S H I P
RENO TOWNSHIP
8ATES TOWNSHIP
HEMATITE T O W N S H I P
IRON RIVER T O W N S H I P .
DENVER TOWNSHIP
FREMONT TOWNSHIP
G I L M O R E TOWNSHIP
LINCOLN TOWNSHIP
VERNON T O W N S H I P
WISE TOWNSHIP
BLACKMAN T O W N S H I P
CCLUMBIA T O W N S H I P
CONCORD TOWNSHIP
G R A S S LAKE T O W N S H I P
HANOVER TOWNSHIP
HENRIETTA T O W N S H I P
LEONI TOWNSHIP
>=
05/23/78 AT 01:25
U.S. DEPARTMENT
PAGE105
OF THE
TREASURY
DISTRESSED AREA ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
Zl
23
23
Zl
23
23
23
23
23
23
23
Zl
23
23
23
23
23
23
23
TITLE
NAPOLEON TOW NSHIP
NCRVELL TOWN SHIP
PARMA TOWNSH IP
PULASKI TOWN SHIP
RIVES TOWNSH IP
SANDSTONE TO WNSHIP
SPRING ARBOR TOWNSHIP
SPRINGPORT T OWNSHIP
SUMMIT TOWNS HIP
TCMPKINS TOW NSHI P
WATERLOO TOW NSHIP
ALLOUEZ TOWN SHIP
EAGLE HARBOR TOWNSHIP
GRANT TOWNSH IP
HCUGHTON TOW NSHI P
SHERMAN TOWN SHIP
ELK TOWNSHIP
ALMONT TOWNS HIP
ARCADIA TOWN SHIP
ATTICA TOWNS HIP
BURLINGTON T OWNSHIP
BURNSIDE TOW NSHIP
DEERFIELD TO WNSH IP
ORYDEN TOWNS HIP
ELBA TOWNSHI P
GCODLAND TOW NSHIP
HAOLEY TOWNS HIP
IMLAY TOWNSH IP
LAPEER TOWNS HIP
MARATHON TOW NSHIP
MAYFIELD TOW NSHIP
METAMORA TOW NSHIP
NORTH BRANCH TOWNSHIP
OREGON TOWNS HIP
RICH TOWNSHI P
EMPIRE TOWNS HIP
SOLON TOWNSH IP
ADRIAN TOWNS HIP
CAMBRIOGE TO WNSHIP
CLINTON TOWN SHIP
DEERFIELD TO WNSHIP
DOVER TOWNSH IP
FAIRFIEL3 TO WNSHIP
FRANKLIN TOW NSHIP
HUDSON TOWNS HIP
MACON TOWNSH IP
TEST
PAGElOb
05/23/78
A
S
Ls! OE%ARTMENT
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
Zl
Zl
TITLE
MADISON TOWNSHIP
MEOINA TOWNSHIP
OGDEN TOWNSHIP
PALMYRA TOWNSHIP
RAISIN TOWNSHIP
RIGA TOWNSHIP
ROLLIN TOWNSHIP
ROME TOWNSHIP
SENECA TOWNSHIP
TECUMSEH .TOWNSHIP
WOODSTOCK TOWNSHIP
CONWAY TOWNSHIP
PENTLAND T O W N S H I P
HENDRICKS T O W N S H I P
HUDSON TOWNSHIP
MARQUETTE TOWNSHIP
MCRAN TOWNSHIP
ARMADA TOWNSHIP
CHESTERFIELD T O W N S H I P
LENOX TOWNSHIP
MACOMB TOWNSHIP
RICHMOND T O W N S H I P
ARCADIA TOWNSHIP
BEAR LAKE T O W N S H I P
BROWN TOWNSHIP
CLEON TOWNSHIP
DICKSON TOWNSHIP
FILER TOWNSHIP
MANISTEE T O W N S H I P
MAPLE GROVE TOWNSHIP
MARILLA TOWNSHIP
NORMAN TOWNSHIP
ONEKAMA TOWNSHIP
PLEASANTON T O W N S H I P
SPRINGOALE T O W N S H I P
STRONACH T O W N S H I P
EWING TOWNSHIP
HUMBOLDT T O W N S H I P
REPUBLIC T O W N S H I P
SANDS TOWNSHIP
AMBER TOWNSHIP
EDEN TOWNSHIP
PERE MARQUETTE T O W N S H I P
SHERIDAN T O W N S H I P
AETNA TOWNSHIP
CHIPPEWA T O W N S H I P
TREASURY
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. DEPARTMENT
DISTRESSED
AREA
(ELIGIBLE
STATE
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
TITLE
FAITHORN TOWNSHIP
HOLMES TOWNSHIP
INGALLSTON T O W N S H I P
LAKE T O W N S H I P
MEYER TOWNSHIP
NADEAU TOWNSHIP
SPALOING TOWNSHIP
EDENVILLE T O W N S H I P
GENEVA T O W N S H I P
GREENDALE TOWNSHIP
HOMER TOWNSHIP
HCPE T O W N S H I P
JASPER T O W N S H I P
JEROME T O W N S H I P
LARKIN T O W N S H I 0
LEE TOWNSHIP
LINCOLN TOWNSHIP
MIDLAND T O W N S H I P
MILLS T O W N S H I P
MCUNT HALEY T O W N S H I P
PORTER TOWNSHIP
WARREN T O W N S H I P
AETNA T O W N S H I P
ENTERPRISE TOWNSHIP
RICHLAND T O W N S H I P
ERIE T O W N S H I P
EXETER TOWNSHIP
MONROE TOWNSHIP
BELVIOERE T O W N S H I P
BLOOMER TOWNSHIP
BUSHNELL TOWNSHIP
CATO T O W N S H I P
CRYSTAL T O W N S H I P
DAY TOWNSHIP
DCUGLASS TOWNSHIP
EUREKA TOWNSHIP
EVERGREEN T O W N S H I P
FAIRPLAIN TOWNSHIP
F E R R I S TOWNSHIP
HOME T O W N S H I P
MAPLE VALLEY T O W N S H I P
MCNTCALM TOWNSHIP
PIERSON T O W N S H I P
PINE T O W N S H I P
REYNOLDS T O W N S H I P
RICHLAND TOWNSHIP
PAGE137
OF THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TEIST
°5'25"9 'I.IVHWHM
Of THE m.SURt
'"OE10',
DISTRESSED AREA ELIGIBILITY TE'ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
23 SIDNEY TOWNSHIP
23
WINFIELD T O W N S H I P
23
BLUE LAKE T O W N S H I P
23
CASNOVIA T O W N S H I P
23
CEDAR CREEK TOWNSHIP
23
DALTON TOWNSHIP
23
EGELSTON T O W N S H I P
23
FRUITLAND T O W N S H I P
23
FRUITPORT T O W N S H I P
23
HOLTON TOWNSHIP
23
LAKETON TOWNSHIP
23
MONTAGUE T O W N S H I P
23
MOORLAND T O W N S H I P
23
MUSKEGON T O W N S H I P
23
RAVENNA TOWNSHIP
23
SULLIVAN T O W N S H I P
23
WHITEHALL T O W N S H I P
23
WHITE RIVER T O W N S H I P
23
ASHLAND TCWNSHIP
23
BRIDGETON T O W N S H I P
23
DAYTON TOWNSHIP
23
DENVER TOWNSHIP
23
GCODWELL T O W N S H I P
23
MERRILL TOWNSHIP
23
NORWICH T O W N S H I P
23
SHERIDAN T O W N S H I P
23
SHERMAN TOWNSHIP
23
ADDISON TOWNSHIP
23
BRANDON TCWNSHIP
23
COMMERCE T O W N S H I P
23
GROVELANO T O W N S H I P
23
HIGHLAND T O W N S H I P
23
HOLLY TOWNSHIP
23
INDEPENDENCE T O W N S H I P
23
MILFORO TOWNSHIP
23
ORION TOWNSHIP
23
OXFORO T O W N S H I P
23
ROSE T O W N S H I P
23
SOUTHFIELD T O W N S H I P
23
SPRINGFIELD TOWNSHIP
23
WATERFORD T O W N S H I P
23
WHITE LAKE T O W N S H I P
23
BENONA T O W N S H I P
23
CLAYBANKS TOWNSHIP
23
COLFAX TOWNSHIP
23
CRYSTAL TOWNSHIP
"N
0 5 / 2 3 / 7 6 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
23 EL6RIDGE TOWNSHIP
23
FERRY TOWNSHIP
23
G O L D E N TOWNSHIP
23
GRANT TOWNSHIP
23
GREENWOOD T O W N S H I P
23
HART TOWNSHIP
23
LEAVITT TOWNSHIP
23
NEWFIELD T O W N S H I P
23
OTTO TOWNSHIP
23
PENTWATER T O W N S H I P
23
SHELBY TOWNSHIP
23
WEARE TOWNSHIP
23
BERGLANO T O W N S H I P
23
BCHEMIA T O W N S H I P
23
CARP LAKE T O W N S H I P
23
GREENLAND TOWNSHIP
23
HAIGHT TOWNSHIP
23
INTERIOR T O W N S H I P
23
MCMILLAN T O W N S H I P
23
MATCHWOOD T O W N S H I P
23
ONTONAGON T O W N S H I P
23
ROCKLAND T O W N S H I P
23
STANNARD T O W N S H I P
23
HIGHLAND T O W N S H I P
23
SYLVAN TOWNSHIP
23
ALLIS TOWNSHIP
23
BEARINGER T O W N S H I P
23
BELKNAP TOWNSHIP
23
BISMARCK T O W N S H I P
23
CASE TOWNSHIP
23
KRAKOW TOWNSHIP
23
METZ TOWNSHIP
Zl
MOLTKE TOWNSHIP
23
NORTH ALLIS TOWNSHIP
23
OCQUEOC TOWNSHIP
23
POSEN TOWNSHIP
23
PRESQUE ISLE T O W N S H I P
23
PULAWSKI T O W N S H I P
23
ROGERS TOWNSHIP
23
BERLIN TOWNSHIP
23
BROCKWAY T O W N S H I P
23
BURTCHVILLE TOWNSHIP
23
CASCO TOWNSHIP
23
CHINA TOWNSHIP
23
CLAY TOWNSHIP
23
CLYDE TOWNSHIP
PAGE109
OF THE
TREASURY
PAGE110
05/23/78
A
Jj;
S
^
p A R T K E N T
OF THE
TREASURY
DISTRESSED AREA ELIGIBILITY TE'ST
(ELIGIBLE GOVERNMENTS)
STATE
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
TITLE
COTTRELLVILLE TOWNSHIP
EAST CHINA T O W N S H I P
EMMETT TOWNSHIP
FORT GRATIOT T O W N S H I P
GRANT TOWNSHIP
GREENWOOD T O W N S H I P
IRA TOWNSHIP
KENOCKEE T O W N S H I P
KIMBALL TOWNSHIP
LYNN TOWNSHIP
MUSSEY TOWNSHIP
PORT HURON T O W N S H I P
RILEY TOWNSHIP
ST CLAIR T O W N S H I P
WALES TOWNSHIP
BURR OAK T O W N S H I P
COLON TOWNSHIP
CONSTANTINE T O W N S H I P
FA3IUS TOWNSHIP
FAWN RIVER T O W N S H I P
FLORENCE T O W N S H I P
FLOWERFIELD T O W N S H I P
LEONIDAS TOWNSHIP
LCCKPORT T O W N S H I P
MENDON TOWNSHIP
MOTTVILLE T O W N S H I P
NCTTAWA TOWNSHIP
STURGIS TOWNSHIP
WHITE PIGEON T O W N S H I P
ARGYLE TOWNSHIP
AUSTIN TOWNSHIP
DELAWARE T O W N S H I P
ELK TOWNSHIP
ELMER TOWNSHIP
F L Y N N TOWNSHIP
GREENLEAF T O W N S H I P
MARION TOWNSHIP
MINDEN TOWNSHIP
MOORE TOWNSHIP
WHEATLAND T O W N S H I P
MUELLER T O W N S H I P
ANTRIM T O W N S H I P
BENNINGTON T O W N S H I P
BURNS TOWNSHIP
CALEDONIA T O W N S H I P
FAIRFIELO T O W N S H I P
s*
0 5 / 2 3 / 7 8 AT 31:25
U.S. D E P A R T M E N T
DISTRESSED
AREA
PAGE1U
OF
Zl
23
23
23
23
23
23
23
Zl
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
Zl
23
23
TITLE
HAZELTON TOWNSHIP
MID0LE3URY T O W N S H I P
NEW HAVEN T O W N S H I P
OWOSSO T O W N S H I P
PERRY TOWNSHIP
RUSH TOWNSHIP
SCIOTA TOWNSHIP
SHIAWASSEE T O W N S H I P
VENICE TOWNSHIP
VERNON TOWNSHIP
WCODHULL TOWNSHIP
AKRON TCWNSHIP
ALMER TOWNSHIP
ELMWOOD T O W N S H I P
INDIANFIELDS T O W N S H I P
TUSCOLA TOWNSHIP
WATERTOWN T O W N S H I P
W E L L S TOWNSHIP
BLOOMINGDALE T O W N S H I P
COVERT TOWNSHIP
ANTIOCH T O W N S H I P
BOON T O W N S H I P
CLAM LAKE T O W N S H I P
HARING TOWNSHIP
HENDERSON TOWNSHIP
SLAGLE TOWNSHIP
S C U T H 8RANCH TOWNSHIP
STATE = 23:
855
RECORDS
TREASURY
ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE
THE
TEST
PAGE112
05/23/78
A
:
;j; ^
p A R T M
ENT
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
24 CARLTON COUNTY
24
CLEARWATER C O U N T Y
24
KANABEC COUNTY
24
KOOCHICHING COUNTY
24
LAKE OF THE WOODS C O U N T Y
24
MORRISON C O U N T Y
24
ROSEAU COUNTY
24
ST L O U I S C O U N T Y
24
TODD COUNTY
24
WINONA COUNTY
24
AITKIN VILLAGE
24
TAMARACK V I L L A G E
24
CALLAWAY V I L L A G E
24
OGEMA VILLAGL
24
WOLF LAKE V I L L A G E
24
BEMIDJI CITY
24
F U N K L E Y VILLAGE
24
KELLIHER V I L L A G E
24
TURTLE RIVER V I L L A G E
24
8ARNUM VILLAGE
24
CARLTON VILLAGE
24
CLOQUET CITY
24
CROMWELL V I L L A G E
24
KETTLE RIVER V I L L A G E
24
MOOSE LAKE V I L L A G E
24
SCANLON VILLAGE
24
THOMSON VILLAGE
24
WRENSHALL CITY
24
WRIGHT VILLAGE
24
BACKUS VILLAGE
24
BOY RIVER V I L L A G E
24
CASS LAKE VILLAGE
24
PILLAGER V I L L A G E
24
8AGLEY VILLAGE
24
CLEARBROOK V I L L A G E
24
GCNVICK V I L L A G E
24
LEONARD VILLAGE
24
SHEVLIN VILLAGE
24
CROSBY VILLAGE
24
FIFTY LAKES VILLAGE
24
AKELEY VILLAGE
24
PARK RAPIDS V I L L A G E
24
BCVEY VILLAGE
24
CALUMET VILLAGE
24
CGLERAINE V I L L A G E
24
NASHWAUK V I L L A G E
TREASURY
0 5 / 2 3/78 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED
AREA
PAGE113
OF THE
ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
TITLE
ZEMPLE VIL L A G E
G R A S S T O N V ILLA GE
MORA VILLA GE
O G I L V I E VI LLAG
QUAMBA VIL LAGE
BIG FALLS VILL AGE
MIZPAH VIL L A G E
N C R T H O M E V ILLA GE
B A U D E T T E V ILLA GE
BUCKMAN VI LLAG E
E L M D A L E VI LLAG E
F L E N S B U R G VILL AGE
HARDING VI LLAG E
H I L L M A N VI LLAG E
L A S T R U P VI LLAG r
RANDALL VI LLAG E
S O B I E S K I V ILLA GE
ASKOV VI-L AGE
DENHAM VIL LAGE
F I N L A Y S O N VILL AGE
H E N R I E T T E VILL AGE
K E R R I C K VI LLAG E
PINE CITY VILL AGE
SANDSTONE VILL AGE
S T U R G E O N L AKE V I L L A G E
WILLOW FIV ER V ILLAGE
H A T F I E L D V ILLA GE
MCRRISTOWN VIL LAGE
BAOGER VIL L A G E
STRATHCONA VIL LAGE
AURORA VIL L A G E
B A B B I T T VI LLAG E
BIWABIK CI TY
B R O O K S T O N VILL AGE
BUHL VILLA GE
C H I S H O L M C ITY
COOK VILLA
ELY CITY
E V E L E T H CI TY
FLCODWOCD VILLAGE
F R A N K L I N V ILLAGE
G I L B E R T CI TY
HIBBING VI L L A G E
HCYT LAKES V I L L A G E
IRON JUNCT ION V I L L A G E
KINNEY VIL LAGE
TREASURY
TEST
PAGE114
05/2
3/78 AT
31:25
U.S. DEPARTMENT
TDCACIIDV
OF THE
DISTRESSED AREA ELIGIBILITY TE'ST
(ELIGIBLE GOVERNMENTS)
STATE
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
TITLE
LEONIDAS CITY
MCKINLEY VILLAGE
MEAOOWLANDS VILLAGE
PROCTOR VILLAGE
TOWER CITY
VIRGINIA
WINTON VILLAGE
FREEPCRT VILLAGE
HOLDINGFDRD VILLAGE
NEW MUNICH VILLAGE
RICHMOND VILLAGE
ROSCOE VILLAGE
ST ANTHONY VILLAGE
ST CLOUD CITY
ST ROSA VILLAGE
SAUK CENTRE CITY
BROWERVILLE CITY
ALTURA VILLAGE
MINNESOTA CITY VILLAGE
RCLLINGSTONE VILLAGE
STOCKTON VILLAGE
UTICA VILLAGE
WINONA CITY
WAVERLY VILLAGE
BALL BLUFF TOWNSHIP
CORNISH TOWNSHIP
FLEMING TOWNSHIP
IDUN TOWNSHIP
KIMBERLY TOWNSHIP
LAKESIDE TOWNSHIP
LEE TOWNSHIP
LOGAN TOWNSHIP
MACVILLE TOWNSHIP
MALMO TOWNSHIP
PLINY TOWNSHIP
RICE RIVER TOWNSHIP
SALO TOWNSHIP
SEAVEY TOWNSHIP
SPENCER TOWNSHIP
TURNER TOWNSHIP
VEROON TOWNSHIP
WHITE PINE TOWNSHIP
WILLIAMS TOWNSHIP
CALLAWAY TOWNSHIP
MAPLE GROVE TOWNSHIP
OSAGE TCWNSHIP
TREASURY
05/23/76 AT 01:25
U.S. DEPARTMENT
PAGE115
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
24 PINE POINT TOWNSHIP
24
RICEVILLE TOWNSHIP
24
RCUNO LAKE TOWNSHIP
24
SHELL LAKE TOWNSHIP
24
SPRING CREEK TOWNSHIP
24
BENVILLE TOWNSHIP
24
8UZZLE TOWNSHIP
24
CCRMANT TOWNSHIP
24
HAGALI TOWNSHIP
24
HAMRE TOWNSHIP
24
MINNIE TOWNSHIP
24
NEBISH TOWNSHIP
24
PCRT HOPE TOWNSHIP
24
RCOSEVELT TOWNSHIP
24
SHOTLEY TOWNSHIP
24
TAYLOR TWP
24
ATKINSON TOWNSHIP
24
AUTOMBA TOWNSHIP
24
BARNUM TOWNSHIP
24
BESEMAN TOWNSHIP
24
BLACKHOOF TOWNSHIP
24
HCLYOKE TOWNSHIP
24
KALEVALA TOWNSHIP
24
LAKEVIEW TOWNSHIP
24
MAHTOWA TOWNSHIP
24
MCOSE LAKE TOWNSHIP
24
SILVER TOWNSHIP
24
SKELTCN TOWNSHIP
24
SPLIT ROCK TOWNSHIP
24
THOMPSON TOWNSHIP
24
TWIN LAKES TOWNSHIP
24
WRENSHALL TOWNSHIP
24
PERCH LAKE TWP
24
BEULAH TOWNSHIP
24
BCY LAKE TOWNSHIP
24
DEERFIELD TOWNSHIP
24
GOULD TOWNSHIP
24
INGUADONA TOWNSHIP
24
LEECH LAKE TOWNSHIP
24
MCKINLEY TOWNSHIP
24
MEADOW BROOK TOWNSHIP
24
PINE LAKE TOWNSHIP
24
POPLAR TOWNSHIP
24
REMER TOWNSHIP
24
ROGERS TOWNSHIP
24
SHINGOBEE TOWNSHIP
V
TREASURY
PAGEllb
05/23/78
A
^0s;:^pARTMENT
OF THE
TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
24 THUNDER LAKE TOWNSHIP
24
BEAR CREEK TOWNSHIP
24
CLOVER TOWNSHIP
24
COPLEY TOWNSHIP
24
DUDLEY TOWNSHIP
24
EDDY TOWNSHIP
24
FALK TOWNSHIP
24
GREENWOOD T O W N S H I P
24
HANGAARD T O W N S H I P
24
HOLST TCWNSHIP
24
ITASCA TOWNSHIP
24
LA PRAIRIE T O W N S H I P
24
LEON TOWNSHIP
24
MINERVA TOWNSHIP
24
MOOSE CREEK TOWNSHIP
24
NORA TOWNSHIP
24
PINE LAKE TOWNSHIP
24
POPPLE TOWNSHIP
24
RICE TOWNSHIP
24
SHEVLIN TOWNSHIP
24
SINCLAIR T O W N S H I P
24
WINSOR TOWNSHIP
24
DEAN LAKE T O W N S H I P
24
LITTLE PINE TOWNSHIP
24
OAK LAWN T O W N S H I P
24
ROSS LAKE TOWNSHIP
24
TIMOTHY TOWNSHIP
24
BELVIOERE T O W N S H I P
24
GOODHUE TOWNSHIP
24
BADOURA TCWNSHIP
24
CROW WINS LAKE TWP
24
LAKE ALICE T O W N S H I P
24
LAKE EMMA T O W N S H I P
24
LAKE GEORGE TOWNSHIP
24
MANTRAP TOWNSHIP
24
ARDENHURST T O W N S H I P
24
BEARVILLE T O W N S H I P
24
BIGFORK T O W N S H I P
24
BLACKBERRY T O W N S H I P
24
FEELEY TOWNSHIP
24
GOOD HOPE T O W N S H I P
24
GOODLANO TOWNSHIP
24
KINGHURST T O W N S H I P
24
MAX TOWNSHIP
24
NCRE T O W N S H I P
24
SAND LAKE T O W N S H I P
^*
05/23/73 AT 31:25
U.S. DEPARTMENT
PAGE117
OF THE
TREASURY
DISTRESSED AREA ELIGIBILITY TE<ST
(ELIGIBLE
STATE
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
2-4
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
TITLE
SPANG TOWNSHIP
STOKES TOWNSHIP
THIRD RIVER TOWNSHIP
ANN LAKE TOWNSHIP
ARTHUR TOWNSHIP
BRUNSWICK TOWNSHIP
CCMFORT TOWNSHIP
FCRD TOWNSHIP
GRASS LAKE TOWNSHIP
HAY BROOK TOWNSHIP
HILLMAN TOWNSHIP
KANABEC TOWNSHIP
K M F E LAKE TOWNSHIP
KROSCHEL TOWNSHIP
PEACE TOWNSHIP
POMROY TOWNSHIP
SCUTH FORK TOWNSHIP
8EJ0U TOWNSHIP
GREGORY TOWNSHIP
HEIER TOWNSHIP
LAKE GROVE TOWNSHIP
OAKLANO TOWNSHIP
AUGS8URG TOWNSHIP
GRAND PLAIN TOWNSHIP
MOYLAN TOWNSHIP
VALLEY TOWNSHIP
BUCKMAN TOWNSHIP
BUH TOWNSHIP
CLOUGH TOWNSHIP
CULDRUM TOWNSHIP
CUSHING TOWNSHIP
HILLMAN TOWNSHIP
LAKIN TOWNSHIP
LEIGH TOWNSHIP
RAIL PRAIRIE TOWNSHIP
RICHARDSON TOWNSHIP
SWANVILLE TOWNSHIP
ADAMS TOWNSHIP
BENNINGTON TOWNSHIP
CLAYTON TOWNSHIP
FRANKFORD TOWNSHIP
GRAND MEADOW TOWNSHIP
LOOI TOWNSHIP
MARSHALL TOWNSHIP
PLEASANT VALLEY TWP
CLOVER LEAF TOWNSHIP
GOVERNMENTS)
05/23/78 AT 3 1 : 2 5 ^ ^ ^
op
^
DISTRESSED AREA ELIGIBILITY TE«ST
(ELIGIBLE GOVERNMENTS)
STATE
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
24
TITLE
GOODRIDGE TOWNSHIP
HIGHLANDING TOWNSHIP
SILVERTON TOWNSHIP
BROOK PARK TOWNSHIP
OANFORTH TOWNSHIP
HINCKLEY TOWNSHIP
KERRICK TOWNSHIP
MISSION CREEK TOWNSHIP
NEW DOSEY TOWNSHIP
NICKERSON TOWNSHIP
NORMAN TOWNSHIP
STURGEON LAKE TOWNSHIP
AETNA TOWNSHIP
ALTONA TOWNSHIP
ELMER TOWNSHIP
ROCK TOWNSHIP
GERVAIS TOWNSHIP
LAMBERT TOWNSHIP
LOUISVILLE TOWNSHIP
WYLIE TOWNSHIP
MCRRISTOWN TOWNSHIP
NCRTHFIELD TOWNSHIP
SHIELDSVILLE TOWNSHIP
BARNETT TOWNSHIP
BARTO TOWNSHIP
DIETER TOWNSHIP
ENSTROM TOWNSHIP
HEREIM TOWNSHIP
LINO TOWNSHIP
MICKINOCK TOWNSHIP
MOOSE TOWNSHIP
PCPLAR GROVE TOWNSHIP
REINE TOWNSHIP
SKAGEN TOWNSHIP
STAFFORD TOWNSHIP
STOKES TOWNSHIP
ALANGO TOWNSHIP
ALBORN TOWNSHIP
ALDEN TOWNSHIP
ANGORA TOWNSHIP
ARROWHEAD TOWNSHIP
AULT TOWNSHIP
BASSETT TOWNSHIP
BIWABIK TOWNSHIP
BREITUNG TOWNSHIP
8REVAT0R TOWNSHIP
^
^
PAGEU8
05/23/78 AT 01:25
U.S. DEPARTMENT
PAGE119
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
24 CANOSIA TOWNSHIP
24
CEDAR VALLEY TOWNSHIP
24
CHERRY TOWNSHIP
24
CCLVIN TOWNSHIP
24
COTTON TOWNSHIP
24
CULVER TOWNSHIP
24
DULUTH TOWNSHIP
24
ELLSBURG TOWNSHIP
24
ELMER TOWNSHIP
24
EMBARRASS TOWNSHIP
24
FAIRBANKS TOWNSHIP
24
FIELD TOWNSHIP
24
FINE LAKES TOWNSHIP
24
FLOOOWOCD TOWNSHIP
24
GNESEN TOWNSHIP
24
HALOEN TOWNSHIP
24
INDUSTRIAL TOWNSHIP
24
KELSEY TOWNSHIP
24
KUGLER TOWNSHIP
24
LAKEWOOO TOWNSHIP
24
LAVELL TOWNSHIP
24
LINDEN GROVE TOWNSHIP
24
MCDAVITT TOWNSHIP
24
MEADOWLANDS TOWNSHIP
24
MIDWAY TOWNSHIP
24
MISSABE MOUNTAIN TWP
24
MORCOM TOWNSHIP
24
MORSE TOWNSHIP
24
NESS TOWNSHIP
24
NEW INOEPENOENCE TWP
24
NORMANNA TOWNSHIP
24
NCRTHLAND TOWNSHIP
24
OWENS TOWNSHIP
24
PAYNE TOWNSHIP
24
PIKE TOWNSHIP
24
PCRTAGE TOWNSHIP
24
PRAIRIE LAKE TOWNSHIP
24
RICE LAKE TOWNSHIP
24
SANDY TOWNSHIP
24
SOLWAY TOWNSHIP
24
STONEY BROOK TOWNSHIP
24
STUNTZ TOWN
24
STURGEON TOWNSHIP
24
TOIVOLA TOWNSHIP
24
VAN BUREN TOWNSHIP
24
VERMILION LAKE TOWNSHIP
TREASURY
PAGE120
05/23/78 A T n : ^ ^ ^ ^
Qf
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
24 WAASA TCWNSHIP
24
WHITE TCWNSHIP
24
WILLOW VALLEY TOWNSHIP
24
ASHLEY TOWNSHIP
24
CROW LAKE TOWNSHIP
24
KRAIN TOWNSHIP
24
RCCKVILLE TOWNSHIP
24
BERTHA TOWNSHIP
24
BIRCHDALL TOWNSHIP
24
BRUCE TOWNSHIP
24
EAGLE VALLEY TOWNSHIP
24
FAWN LAKE TOWNSHIP
24
GERMANIA TOWNSHIP
24
LESLIE TOWNSHIP
24
MORAN TOWNSHIP
24
REYNOLDS TOWNSHIP
24
OFESBACH TOWNSHIP
24
ELBA TCWNSHIP
24
FREMONT TOWNSHIP
24
HART TOWNSHIP
24
HILLSDALE TOWNSHIP
24
MOUNT VERNON TOWNSHIP
24
PLEASANT HILL TOWNSHIP
24
RCLLINGSTONE TOWNSHIP
24
ST CHARLES TOWNSHIP
24
SARATOGA TOWNSHIP
24
UTICA TOWNSHIP
24
WISCOY TOWNSHIP
STATE = 24:
396 RECORDS
m
TREASlJRY
05/23/78 AT 01:25
U.S. DEPARTMENT OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
25 ADAMS COUNTY
25
ALCORN COUNTY
25
AMITE COUNTY
25
ATTALA COUNTY
25
BENTON COUNTY
25
BOLIVAR COUNTY
25
CALHOUN COUNTY
25
CARROLL COUNTY
25
CHICKASAW COUNTY
25
CHOCTAW COUNTY
25
CCAHOMA COUNTY
25
COPIAH COUNTY
25
FRANKLIN COUNTY
25
GEORGE COUNTY
25
GREENE COUNTY
25
GRENADA COUNTY
25
HOLMES COUNTY
25
HUMPHREYS COUNTY
25
JASPER COUNTY
25
JEFFERSON COUNTY
25
JEFFERSON DAVIS COUNTY
25
JCNES COUNTY
25
KEMPER COUNTY
25
LAUDERDALE COUNTY
25
LAWRENCE COUNTY
25
LEFLORE COUNTY
25
LINCOLN COUNTY
25
MADISON COUNTY
25
MARION COUNTY
25
MONROE COUNTY
25
MONTGOMERY COUNTY
25
NEWTON COUNTY
25
NCXUBEE COUNTY
25
PANOLA COUNTY
25
PEARL RIVER COUNTY
25
PIKE COUNTY
25
QUITMAN COUNTY
25
SHARKEY COUNTY
25
SIMPSON COUNTY
25
SUNFLOWER COUNTY
25
TALLAHATCHIE COUNTY
25
TATE COUNTY
25
TISHOMINGO COUNTY
25
TUNICA COUNTY
25
WALTHALL COUNTY
25
WARREN COUNTY
PAGE121
TREASURY
PAG El 22
05/23/78
A
:
^^ ^pARTMENT
OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
25 WASHINGTON COUNTY
25 WAYNE COUNTY
25 WILKINSON COUNTY
25 WINSTON COUNTY
25 YALOBUSHA COUNTY
25 YAZOO COUNTY
25 NATCHEZ CITY
25 CORINTH CITY
25 KOSSUTH VILLAGE
25 RIENZI TOWN
25 GLOSTER TOWN
25 LIBERTY TOWN
25 ETHEL TOWN
25 KOSCIUSKO CITY
25 MCCOOL TOWN
25 SALLIS TOWN
25 ASHLAND TOWN
25 HICKORY FLAT VILLAGE
25 ALLIGATOR TOWN
25 BENOIT TOWN
25 BEULAH TOWN
25 BOYLE TOWN
25 CLEVELAND CITY
25 DUNCAN TOWN
25 GUNNISON TOWN
25 MERIGOLO TOWN
25 MOUND BAYOU TOWN
25 PACE TOWN
25 RCSEOALE CITY
25 SHAW TOWN
25 SHEL8Y CITY
25 WINSTONVILLE TOWN
25 BIG CREEK VILLAGE
25 BRUCE TOWN
25 CALHOUN CITY TOWN
25 DERMA TOWN
25 SLATE SPRINGS VILLAGE
25 VARDAMAN TOWN
25 HCULKA TOWN
25 HCUSTON CITY
25 OKOLONA CITY
25 WCOOLAND VILLAGE
25 ACKERMAN TOWN
25 WEIR TOWN
25 CLARKSOALE CITY
25 FRIARS POINT TOWN
05/23/76 AT 31:25
U.S. DEPARTMENT
PAGE123
OF THE
OISTRESSEO AREA ELIGIBILITY TEiST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
25 JONESTOWN TOWN
25
LULA TOWN
25
LYON TOWN
25
BEAUREGARD VILLAGE
25
CRYSTAL SPRINGS CITY
25
GEORGETOWN TOWN
25
HAZLEHURST CITY
25
WESSON TOWN
25
BUDE TOWN
25
ROXIE TOWN
25
LUCEOALE TOWN
25
LEAKESVILLE TOWN
25
MCLAIN TOWN
25
GRENADA CITY
25
BAY ST LOUIS CITY
25
BILOXI CITY
25
CRUGER TOWN
25
OURANT TOWN
25
GCODMAN TOWN
25
LEXINGTON CITY
25
PICKENS TOWN
25
TCHULA TOWN
25
WEST TOWN
25
BELZONI CITY
25
LOUISE TOWN
25
SILVER CITY TOWN
25
BAY SPRINGS TOWN
25
HEIDEL8ERG TOWN
25
LOUIN TOWN
25
MCNTR05E TOWN
25
FAYETTE TOWN
25
BASSFIELD TOWN
25
PRENTISS TOWN
25
SCSO TOWN
25
OE KALB TOWN
25
SC003A TOWN
25
MERIDIAN CITY
25
MARION CITY
25
NEWHEBRON VILLAGE
25
GUNTOWN TOWN
25
GREENWOOD CITY
25
ITTA BENA TOWN
25
SIOON TOWN
25
MORGAN CITY TOWN
25
SCHLATER TOWN
25
BROOKHAVEN CITY
TREASURY
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
25 CANTON CITY
25
FLORA TOWN
25
C O L U M B I A CITY
25
HCLLY S P R I N G S CITY
25
ABERDEEN CITY
25
AMORY CITY
25
GATTMAN V I L L A G E
25
SMITHVILLE TOWN
25
DUCK HILL TOWN
25
KILMICHAEL TOWN
25
WINONA CITY
25
D E C A T U R TOWN
25
HICKORY TOWN
25
NEWTON CITY
25
B R O O K S V I L L E TOWN
25
MACON CITY
25
SHUGUALA* TOWN
25
BATESVILLE CITY
25
COURTLAND VILLAGE
25
POPE VILLAGE
25
S A R D I S TOWN
25
PICAYUNE CITY
25
P C P L A R V I L L E CITY
25
MCCCMB CITY
25
MAGNOLIA C I T Y
25
OSYKA TOWN
25
SUMMIT TOWN
25
LAMBERT TOWN
25
M A R K S CITY
25
S L E D G E TOWN
25
F A L C O N TOWN
25
ANGUILLA T O W N
25
CARY TOWN
25
RCLLING FORK TOWN
25
BRAXTON V I L L A G E
25
DLO TCWN
25
D C D D S V I L L E TOWN
25
DREW CITY
25
INDIANOLA C I T Y
25
INVERNESS TOWN
25
MCORHEAD TOWN
25
RULEVILLE TOWN
25
SUNFLOWER TOWN
25
CHARLESTON CITY
25
GLENDORA VILLAGE
9^
<;ilMWFB
TflUN
PAGE124
OF THE
TREASURY
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED
(ELIGIBLE GOVERNMENTS)
STATE TITLE
25 TUTWILER TOWN
25
WEB8 TOWN
25
COLDWATER TOWN
25
SENATCBIA CITY
25
IUKA CITY
25
PADEN VILLAGE
25
GOLDEN VILLAGE
25
TUNICA TOWN
25
MYRTLE TOWN
25
NEW ALBANY C I T Y
25
VICKSBURG CITY
25
ARCOLA TOWN
25
GREENVILLE CITY
25
HOLLANOALE C I T Y
25
LELAND CITY
25
WAYNESBORO C I T Y
25
W C O O V I L L E TOWN
25
LCUISVILLE CITY
25
NCXAPATER TOwN
25
C O F F E E V I L L E TOWN
25
WATER VALLEY C I T Y
25
TILLATOBA V I L L A G E
25
8ENT0NIA TOWN
25
EDEN VILLAGE
25
SATARTIA V I L L A G E
25
YAZOO CITY C I T Y
STATE = 25: 210 RECORDS
AREA
PAGE125
OF THE
TREASURY
ELIGIBILITY
TEST
PAGE12G
05/23/78
A
^
3
:
s
; ^pARTMENT
OF
THE
OISTRESSEO AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
2b ATCHISCN COUNTY
2b
BARTON COUNTY
2b
BUCHANAN COUNTY
2b
CARROLL COUNTY
2b
CLARK COUNTY
2b
COOPER COUNTY
2b
DAVIESS COUNTY
2b DOUGLAS COUNTY
2b GRUNDY COUNTY
2b
HENRY COUNTY
2b
HCWARD COUNTY
2b
JACKSON COUNTY
2b JASPER COUNTY
2b
JOHNSON COUNTY
2b
KNOX COUNTY
2b LACLEDE COUNTY
2b
LINN COUNTY
2b LIVINGSTON COUNTY
2b
MACON COUNTY
2b
MAOISON COUNTY
2b
MARIES COUNTY
2b
MARION COUNTY
2b
MERCER COUNTY
2b
MISSISSIPPI COUNTY
2b
MONITEAU COUNTY
2b
MONROE COUNTY
2b
OREGON COUNTY
2b
PEMISCOT COUNTY
2b
PETTIS COUNTY
2b
PIKE COUNTY
2b
PULASKI COUNTY
2b
RANDOLPH COUNTY
2b
RIPLEY COUNTY
2b
ST FRANCOIS COUNTY
2b
SCHUYLER COUNTY
2b
SHANNON COUNTY
2b
SULLIVAN COUNTY
2b
TEXAS COUNTY
2b
WASHINGTON COUNTY
2b
RCCKPORT CITY
2b
TARKIO CITY
2b
WATSON TOWN
2b
WESTBORO TOWN
2S FARBER CITY
2b
BURGESS TOWN
2b
GOLDEN CITY CITY
TREASURY
05/23/78 AT 01:25
U.S. DEPARTMENT
PAGE127
OF THE
DISTRESSED AREA ELIGIBILITY FEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
2b LIBERAL CITY
2b
MINDENMINES CITY
2b
AMORET CITY
2b
FOSTER TOWN
2b
HUME TOWN
2b
MERWIN TOWN
2b
PASSAIC TOWN
2b
LUTESVILLE CITY
26
SEDGEWICKVILLE TOWN
Zb
ZALMA TOWN
2b
AGENCY VILLAGE
2b
OE KALB TOWN
2b
RUSHVILLE TOWN
2b
ST JOSEPH CITY
2b
NEELYVILLE TOWN
2b
POPLAR BLUFF CITY
2b
BCGARO TOWN
2b
BOSWORTH CITY
2b
CARROLLTON TOWN
2b
WAKENDA TOWN
Z6
ELLSINORE TOWN
2b
ELOORAOO SPRINGS CITY
2b
BRUNSWICK CITY
2b
DALTON TOWN
2b
ROTHVILLE TOWN
2b
ALEXANDRIA TOWN
Zb
KAHOKA CITY
2b
LURAY TOWN
2b
WAYLAND CITY
2b
WYACONDA CITY
2b
BOONVILLE CITY
2b
BUNCETON CITY
2b
OTTERVILLE CITY
2b
PILOT GROVE CITY
2b
WOOLDRIDGE TOWN
2b
ALTAMONT TOWN
2b
COFFEY CITY
2b
JAMESON TOWN
Zi> LOCK SPRING VILLAGE
Z6
PATTONSOURG CITY
2b
AVA CITY
Zt
CAMPBELL CITY
2b
HORNERSVILLE CITY
2b
KENNETT CITY
2b
SENATH CITY
2b
BERGER CITY
TREASURY
05/23/78
A
;j;S^pART„eNT
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
2b NEW HAVEN CITY
2b
WASHINGTON CITY
2b
BLAND CITY
2b
GASCONADE CITY
2b
OWENSVILLE CITY
2b
ROSEBUD CITY
2b
BRIMSON TOWN
2b
GALT CITY
Zb
SPICKARDSVILLE C I T Y
2b
TINDALL TOWN
2b
TRENTON CITY
2b
CALHOUN CITY
2b
WINDSOR CITY
2b
ARMSTRONG CITY
2b
FAYETTE CITY
2b
FRANKLIN TOWN
2b
KANSAS CITY
2b
SUGAR CREEK CITY
2b
SIBLEY TOWN
2b
TARSNEY L A K E S TCWN
2b
LCNEJACK TOWN
2b
ASBURY TOWN
26
AVILLE TOWN
2b
CARTHAGE CITY
2b
JASPER CITY
2b
JOPLIN CITY
2b
ORONOGO CITY
2b
PURCELL CITY
2b
WACO TOWN
2b
WEBB CITY CITY
2b
DUENWEG CITY
2b
DUQUESNE VILLAGE
2b
BROOKLYN H E I G H T S VILLAGE:
2b
FIDELITY TOWN
2b
CENTERVIEW TOWN
Zb
HOLDEN CITY
2b
KINGSVILLE TOWN
2b
KNOB NOSTER CITY
Zb
LA TOUR TOWN
2b
LEETON CITY
2b
WARRENSBURG CITY
2b
BARING TOWN
2b
KNOX CITY CITY
2b
NEWARK TOWN
Zb
NOVELTY TOWN
2b
CONWAY CITY
TREASURY
05/2 3/78 AT 31 :25
U.S. D E P A R T M E N T
DISTRESSED
AREA
(ELIGIBLE
STATE
TITLE
26
L E B A N O N CITY
2b
P H I L L I P S 3 U R G TOWN
2b
F R E I S T A T T TOWN
2b
MILLER CITY
Zb
PIERCE CITY CITY
2b
VERONA TOWN
2b
HALLTOWN V I L L A G E
26
HC8ERG V I L L A G E
2b
CANTON CITY
2b
LA B E L L E C I T Y
Zb
LA GRANGE CITY
26
BROOKFIELD CITY
2b . B U C K L I N CITY
2b
L A C L E D E CITY
2b
L I N N E U S CITY
26
MARCELINE CITY
2b
P U R D I N TOWN
2b
CHULA CITY
2b
LUDLOW TOWN
2b
ANDERSON CITY
2b
S C U T H WEST C I T Y TOWN
2b
ATLANTA CITY
2b
BEVIER CITY
2b
C A L L A O CITY
2b
E L M E R TOWN
2b
MACON CITY
Zb
NEW CAMBRIA TOWN
2b
SOUTH G I F F O R Q TOWN
Zb
FREDERICKTOWN CITY
2b
MARQUAND TOWN
2b
C C 8 A L T CITY V I L L A G E
2b
JUNCTION C I T Y V I L L A G E
2b
VIENNA TOWN
2b
PRINCETON C I T Y
Zb
CHARLESTON C I T Y
2b
EAST PRAIRIE C I T Y
2b
WYATT CITY
2b
...LSON CITY TOWN
2b
ANNISTON TOWN
2b
CALIFORNIA C I T Y
2b
CLARKS8URG CITY
2b
JAMESTOWN C I T Y
2b
L U P U S TOWN
Zb
TIPTON CITY
2b
MADISON CITY
2b
S T O U T S V I L L E TOWN
PAGE129
OF THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TEIST
05/23/78
AT
u
^s;:^pARTMENT
OF THE
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
26 SYRACUSE TOWN
26
VERSAILLES C I T Y
2b
ARKOE TOWN
26
BURLINGTON J U N C T I O N C I T Y
26
CLEARMGNT TOWN
26
CLYDE TCWN
26
CONCEPTION J U N C T I O N TOWN
26
ELMO TOWN
26
GUILFORD TOWN
26
HOPKINS CITY
26
PARNELL CITY
26
PICKERING TCWN
26
QUITMAN TOWN
26
RAVENWOCD CITY
26
SKIDMORE CITY
26
ALTON CITY
26
KCSHKONONG CITY
26
THAYER CITY
26
CHAMOIS CITY
26
META CITY
26
CARUTHERSVILLE C I T Y
26
HAYTI CITY
26
HOLLAND TOWN
26
STEELE CITY
26
WARDELL TOWN
26
COOTER TOWN
26
HCMESTOWN CITY
2b
BRAGG CITY TOWN
2b
HAYTI HEIGHTS CITY
2b
PASCOLA TOWN
2b
NORTH WARDELL V I L L A G E
2b
G R E E N RIDGE TOWN
2b
HLUSTONIA CITY
2b
LA MONTE C I T Y
Zb
SEDALIA CITY
Zb
SMITHTON CITY
2b
HUGHESVILLE V I L L A G E
Zb
BOWLING GREEN CITY
2b
CURRYVILLE TOWN
2b
FRANKFORD CITY
2b
LOUISIANA CITY
2b
ANNADA TOWN
2b
ECLIA VILLAGE
STATE = 2b: 227 RECORDS
TREASURY
0 5 / 2 3 / 7 8 AT 31:25
U.S. D E P A R T M E N T
PAGE131
OF THE
DISTRESSED AREA ELIGIBILITY TE'ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
2b PAYNESVILLE TOWN
STATE = 2b: 1 RECOROS
TREASURY
PAGE132
05/23/78
A
Jj;
;2
0t
%ARTMENT
OF
THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
2b
2b
2b
2b
2b
2b
2b
2b
2b
2b
2b
2b
2b
2b
2b
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
TITLE
CROCKER CITY
RICHLAND CITY
ST ROEERT CITY
CLIFTON HILL TOWN
HUNTSVILLE CITY
JACKSONVILLE TOWN
RENICK TOWN
DCNIPHAN CITY
NAYLOR CITY
BISMARCK CITY
BCNNE TERRE CITY
DESLOGE CITY
ELVINS CITY
ESTHER CITY
FAIRVIEW ACRES VILLAGE
FARMINGTON CITY
FLAT RIVER CITY
HIGHLEY HEIGHTS VILLAGE
RIVERMINES TOWN
LEAOINGTON VILLAGE
LEADWOOD CITY
BELLA VILLA CITY
BEL RIDGE VILLAGE
BERKELEY CITY
BRECKENRIDGE HILLS VILL
BRIDGETON TERRACE CITY
COOL VALLEY VILLAGE
DELLWOOD CITY
EDMUNDSON VILLAGE
ELLISVILLE CITY
FERGUSON CITY
HANLEY HILLS VILLAGE
HAZELWOOD CITY
HILLSDALE VILLAGE
JENNINGS CITY
KINLOCH CITY
MAPLEWOCD CITY
NCRMANDY TOWN
OVERLAND CITY
PAGEDALE CITY
PINE LAWN CITY
RIVERVIEW VILLAGE
RCCK HILL CITY
ST ANN CITY
ST JOHN CITY
SCHUERMANN H E I G H T S VILLAGE
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE133
OF THE
TREASURY
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE
STATE
26
26
26
26
26
26
26
26
26
26
26
26
26
26
2b
2b
Zb
Zb
2b
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
2b
TITLE
TIMES BEACH CITY
VALLEY PARK CITY
VELDA VILLAG E
VINITA PARK CITY
WELLSTON CIT Y
WINCHESTER C ITY
WCODSON TERR ACE CITY
ST LOUIS CIT Y
GRAND PASS T OWN
MARSHALL CIT Y
MOUNT LEONAR D TOWN
SWEET SPRING S CITY
DOWNING CITY
GLENWOOD VIL LAGE
LANCASTER CI TY
QUEEN CITY C ITY
BIRCH TREE C ITY
EMINENCE CIT Y
WINONA CITY
CLARENCE CIT Y
GREENCASTLE CITY
GREEN CITY C ITY
HARRIS TOWN
HUMPHREYS TO WN
MILAN CITY
NEWTOWN TOWN
OSGOOD TOWN
HCUSTON CITY
LICKING CITY
RAYMONDVILLE TOWN
CALEDONIA TO WN
IRONDALE CIT Y
MINERAL POIN T TOWN
POTOSI CITY
PIEDMONT CIT
MILL SPRING VILLAGE
SEYMOUR CITY
ALLENDALE TO WN
DENVER TOWN
GRANT CITY
WORTH TOWN
GOLDEN CITY TOWNSHIP
NASHVILLE TO WNSHIP
NEWPORT TCWN SHIP
OZARK TOWNSH IP
CARROLLTON T OWNSHIP
GOVERNMENTS)
05/23/78 A ; j J : ^ p A R T H E N T
QF
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
2b COMBS TOWNSHIP
2b
EGYPT TOWNSHIP
2b
EUGENE TOWNSHIP
2b
HILL TOWNSHIP
2b
HURRICANE TOWNSHIP
2b
MIAMI TOWNSHIP
2b
RIDGE TOWNSHIP
2b
RCCKFORD T O W N S H I P
2b
STOKES MOUND T O W N S H I P
2b
SUGARTREE T O W N S H I P
2b
TROTTER TOWNSHIP
2b
VAN HORN T O W N S H I P
2b
WAKENDA TOWNSHIP
26
BEE BRANCH T O W N S H I P
26
BRUNSWICK TOWNSHIP
26
CLARK TOWNSHIP
26
CCCKRELL T O W N S H I P
26
MISSOURI T O W N S H I P
26
BENTON TOWNSHIP
26
HARRISON T O W N S H I P
26
JACKSON TOWNSHIP
26
JEFFERSON T O W N S H I P
26
LIBERTY TOWNSHIP
2b
LINCOLN TOWNSHIP
2b
MARION TOWNSHIP
2b
SALEM TOWNSHIP
2b
SHERIDAN T O W N S H I P
2b
WASHINGTON T O W N S H I P
26
CLAY TOWNSHIP
26
FREEBORN T O W N S H I P
26
INDEPENDENCE TOWNSHIP
26
SALEM TOWNSHIP
26
FRANKLIN T O W N S H I P
26
JEFFERSON T O W N S H I P
26
LIBERTY TOWNSHIP
26
LINCOLN TCWNSHIP
26
MARION TOWNSHIP
26
MYERS TOWNSHIP
26
TAYLOR TOWNSHIP
26
TRENTON TOWNSHIP
26
BIG CREEK T O W N S H I P
26
OSAGE TOWNSHIP
26
SHAWNEE T O W N S H I P
26
TEBG TOWNSHIP
26
WHITE OAK T O W N S H I P
26
W I N O S O R TOWNSHIP
THE TREASURY
PAGE135
0 5 / 2 3 / 7 8 AT 0 1 : 2 5
U.S. D E P A R T M E N T
OF THE
D I S T R E S S E D AREA
(ELIGIBLE
STATE
26
26
26
26
26
26
2b
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
26
TREASURY
ELIGIBILITY
GOVERNMENTS)
TITLE
BENTON TOWNS HIP
BROOKFIELO T O W N S H I P
ENTERPRISE T O W N S H I P
GRANTSVILLE TOWNSHIP
J A C K S O N TOWN SHIP
JEFFERSON TO WNSHIP
L C C U S T CREEK T O W N S H I P
MARCELINE TO WNSHIP
BLUE MOUND T OWNSHIP
CREAM RIDGE T O W N S H I P
GRAND RIVER T O W N S H I P
JACKSCN TCWN SHIP
MEDICINE TOW NSHIP
MONROE TOWNS HIP
HARRISON TOW NSHI P
MAOISON TOWN SHIP
MARION TOWNS HIP
MEDICINE TOW NSHIP
MORGAN TOWNS HIP
SOMERSET TOW NSHIP
A T C H I S O N TOW NSHIP
GRANT TOWNSH IP
G R E E N TOWNSH IP
H O P K I N S TOWN SHIP
INDEPENDENCE T O W N S H I P
J A C K S O N TOWN SHIP
JEFFERSON TO WNSHIP
MCWROE TOWNS HIP
UNION TOWNSH IP
WASHINGTON T O W N S H I P
BOWMAN TOWNS HIP
BUCHANAN TOW NSHIP
CLAY TOWNSHI P
JACKSON TOWN SHIP
LIBERTY TOWN SHIP
MORRIS TOWNS HIP
PENN TOWNSHI P
PLEASANT HIL L T O W N S H I P
POLK TOWNSHI P
TAYLOR TOWNS HIP
UNION TOWNSH IP
800NE TCWNSH IP
BURDINE TOWN SHIP
CARROLL TOWN SHIP
CASS TOWNSHI P
C L I N T O N TOWN SHIP
TEST
PAGE136
05/23/78
A
;/s;
s2
5
D
EpARTMENT
OF THE
DISTRESSED AREA ELIGIBILITY TE»ST
(ELIGIBLE GOVERNMENTS)
STATE
26
26
26
26
26
2b
2b
26
26
26
26
26
TITLE
CURRENT TOWNSHIP
DATE TOWNSHIP
JACKSON TOWNSHIP
LYNCH TOWNSHIP
MORRIS TOWNSHIP
OZARK TOWNSHIP
PIERCE TOWNSHIP
PINEY TOWNSHIP
ROUBIDOUX TOWNSHIP
SARGENT TOWNSHIP
SHERRILL T O W N S H I P
UPTON TOWNSHIP
STATE = 2b: 19b RECORDS
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
27
27
27
Z7
27
27
27
27
27
27
27
27
27
27
27
27
27
27
27
27
Z7
27
27
27
27
27
27
27
27
27
27
TITLE
CARTER COUNTY
DEER L0D3E COUNTY
GARFIELD COUNTY
GLACIER COUNTY
GRANITE COUNTY
LINCOLN COUNTY
MEAGHER COUNTY
PETROLEUM COUNTY
RAVALLI COUNTY
SILVER BOW COUNTY
EKALAKA TOWN
ANACONOA CITY
DRUMMOND TOWN
PHILIPSBURG CITY
BCULDER TOWN
ST IGNATIUS TOWN
EUREKA TOWN
LIBBY CITY
TROY TOWN
REXFORD TOWN
ENNIS TOWN
WHITE SULPHUR SPRGS CITY
WINNETT TOWN
BROADUS TOWN
DARBY TOWN
HAMILTON CITY
STEVENSVILLE) TOWN
HOT SPRINGS TOWN
BUTTE CITY
WALKERVILLE CITY
JUOITH GAP CITY
STATE = 27:
31
RECORDS
TREASURY
05/23/78
A
.« oc
Jj;:^pARTM£NT
PAGE138
OF THE
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
28 BLAINE COUNTY
28
BCONE COUNTY
28
BURT COUNTY
26 CHERRY COUNTY
28 GRANT COUNTY
28 GREELEY COUNTY
28 JOHNSON COUNTY
28 KEYA PAHA COUNTY
28
KNOX COUNTY
28
MCPHERSON COUNTY
28
RICHAROSON COUNTY
28
SIOUX COUNTY
28
THURSTON COUNTY
28 WAYNE COUNTY
28 WHEELER COUNTY
28
PR05SER VILLAGE
28
BREWSTER VILLAGE
28 OUNNING VILLAGE
28
PETERSBURG VILLAGE
28
PRIMROSE VILLAGE
28 CRAIG VILLAGE
28
OAKLAND CITY
28 GARRISON VILLAGE
28 OCTAVIA VILLAGE
28
SURPRISE VILLAGE
28
ALVO VILLAGE
28
AVOCA VILLAGE
28 GREENWOOD VILLAGE
28 OOERT V I L L A G E
28 CCDY VILLAGE
28 KILGORE VILLAGE
28
MERRIMAN VILLAGE
28
WOOD LAKE VILLAGE
28
ANSLEY VILLAGE
28
DIXON VILLAGE
28
BLUE SPRINGS VILLAGE
28
GREELEY CENTER VILLAGE
28
SCOTIA VILLAGE
28
SPALOING VILLAGE
28 CAIRO VILLAGE
28 CUSHING VILLAGE
28
DILLER VILLAGE
28
HARBINE VILLAGE
28
STEELE CITY VILLAGE
28
CRAB ORCHARD VILLAGE
26
BURTON VILLAGE
TREASURY
05/23/78 AT 01:25
U.S. DEPARTMENT
PAGE139
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
28 CROFTON VILLAGE
28
VERDIGRE VILLAGE
28
GANDY- VILLAGE
28
BROADWATER CITY
28
GENOA CITY
28
BROCK VILLAGE
28
8R0WNVILLE VILLAGE
28
JULIAN VILLAGE
28
NEMAHA VILLAGE
28
PERU CITY
28
DUBOIS VILLAGE
28
STEINAUER VILLAGE
28
ATLANTA VILLAGE
26
HADAR VILLAGE
28
MCLEAN VILLAGE
28
PIERCE CITY
28
BARAOA VILLAGE
28
PRESTON VILLAGE
28
RULC CITY
28
SALEM VILLAGE
28
SHUBERT VILLAGE
28
STELLA VILLAGE
28
VALPARAISO VILLAGE
28
8EE VILLAGE
28
TAMORA VILLAGE
28
HARRISON VILLAGE
28
PENDER VILLAGE
28
ROSALIE VILLAGE
28
THURSTON VILLAGE
28
WALTHILL VILLAGE
28
WINNEBAGO VILLAGE
28
ARCADIA VILLAGE
28
ELYRIA VILLAGE
28
NORTH LOUP VILLAGE
28
HCSKINS VILLAGE
28
WAYNE CITY
28
GUIDE ROCK VILLAGE
28
BARTLETT VILLAGE
28
ERICSON VILLAGE
28
ARIZONA TOWNSHIP
28
CRAIG TOWNSHIP
28
DECATUR TOWNSHIP
28
LGGAN TOWNSHIP
28
OAKLAND TOWNSHIP
28
PERSHING TOWNSHIP
28
RIVERSIDE TOWNSHIP
TREASURY
05/23/78 A J ^ 5 2 D 5 E p A R T M E N T OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TE»ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
28 SILVER CREEK TOWNSHIP
28
LINWOCC TCWNSHIP
28
OAK CREEK T O W N S H I P
28
PLUM CREEK TOWNSHIP
28
BISMARK TCWNSHIP
28
BLAINE TOWNSHIP
28
CUMING TOWNSHIP
28
ELKHORN TOWNSHIP
28
GARFIELD T O W N S H I P
28
GRANT TOWNSHIP
28
LCGAN TOWNSHIP
28
MONTEREY TOWNSHIP
28
NELIGH TOWNSHIP
28
SHERMAN TOWNSHIP
28
ALGERNON TOWNSHIP
28
ANSLEY TOWNSHIP
28
CLIFF TCWNSHIP
28
CCMSTOCK TOWNSHIP
28
DELIGHT TOWNSHIP
23
DOUGLAS GROVE TOWNSHIP
28
EAST CUSTER TOWNSHIP
28
LILLIAN TOWNSHIP
26
LOUP TOWNSHIP
28
RYNO TOWNSHIP
28
SPRING CREEK TOWNSHIP
28
VICTORIA T O W N S H I P
28
WESTERVILLE TCWNSHIP
26
CONCORD TOWNSHIP
28
LOGAN TOWNSHIP
28
BLUE SPRINGS T O W N S H I P
28
HOOKER TOWNSHIP
28
ISLAND GROVE TOWNSHIP
28
MIOLAND TOWNSHIP
28
RIVERSIOE TOWNSHIP
28
HARRISON T O W N S H I P
28
LAKE TOWNSHIP
28
MARTIN TOWNSHIP
28
MAYFIELD T O W N S H I P
28
CHAMBERS T O W N S H I P
28
CGLEMAN TOWNSHIP
28
FRANCIS TOWNSHIP
28
GREEN VALLEY TOWNSHIP
Zd
HCLT CREEK T O W N S H I P
28
STUART TOWNSHIP
28
ADOISON TOWNSHIP
28
BOHEMIA TOWNSHIP
05/23/78 AT 31:25
U.S. DEPARTMENT
DISTRESSED
OF THE
TREASURY
AREA ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE TITLE
28 CREIGHTON TOWNSHIP
28
DOLPHIN TOWNSHIP
26
DCWLING TOWNSHIP
28
EASTERN TOWNSHIP
28
FRANKFORT TOWNSHIP
28
HERRICK TOWNSHIP
28
HILL TOWNSHIP
28
JEFFERSON TOWNSHIP
28
LOGAN TOWNSHIP
28
PEORIA TOWNSHIP
28
RAYMOND TOWNSHIP
28
SPADE TOWNSHIP
28
SPARTA TOWNSHIP
28
VALLEY TOWNSHIP
28
VERDIGRE TOWNSHIP
28
WALNUT GROVE TOWNSHIP
28
WASHINGTON TOWNSHIP
28
WESTERN TOWNSHIP
28
GENOA TOWNSHIP
28
CHESTER TOWNSHIP
28
ANDERSON TOWNSHIP
28
BLACKBIRD TOWNSHIP
28
BRYAN TOWNSHIP
28
DAWES TOWNSHIP
28
FLOURNOY TOWNSHIP
28
MERRY TOWNSHIP
28
OMAHA TOWNSHIP
28
PENDER TOWNSHIP
28
PERRY TOWNSHIP
28
THAYER TOWNSHIP
28
WINNEBAGO TOWNSHIP
28
ARCADIA TOWNSHIP
28
NCRTH LOUP TOWNSHIP
28
GERANIUM TOWNSHIP
ST ATE = 28: 172 RECORDS
PAGE141
TUST
PAGEU2
05/23/78
A
;/s;S^pARTMENT
OF THE
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
29 NYE COUNTY
29
WHITE PINE COUNTY
29
NORTH LAS VEGAS CITY
29
YERINGTON CITY
29 GA8BS CITY
29 LOVELOCK CITY
29
ELY CITY
STATE = 29: 7 RECORDS
TREASURY
05/2 3/78 AT 31:25
U.S. DEPARTMENT OF THE
DISTRESSED
30
30
50
30
30
30
30
30
30
30
30
30
30
30
30
30
30
30
30
30
TITLE
CCOS COUNTY
BERLIN CITY
MANCHESTER CITY
NASHUA CITY
CHATHAM TOWN
CLARKSVILLE TOWN
CCLEBROOK TOWN
OUMMER TOWN
ERROL TOWN
GORHAM TOWN
LANCASTER TOWN
NORTHUMBERLAND TOWN
STRATFORD TOWN
EASTON TOWN
LINCOLN TOWN
LISBON TOWN
LITTLETON TOWN
ORFORD TOUN
WOODSTOCK TOWN
SUGAR HILL TOWN
STATE = 30
TREASURY
AREA ELIGIBILITY
(ELIGIBLE
STATE
PAGE143
20 RECORDS
GOVERNMENTS)
TEST
.,r ^« .OCL
05/23/78
A
J/5;-^pARTM£NT
PAGE144
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
31 ATLANTIC COUNTY
31
BERGEN COUNTY
51 CAMDEN COUNTY
31
CUMBERLAND COUNTY
31
ESSEX COUNTY
31 GLOUCESTER COUNTY
31
HUDSON COUNTY
51
MIDDLESEX COUNTY
31
MORRIS COUNTY
31
PASSAIC COUNTY
31
SALEM COUNTY
31
UNION COUNTY
31
WARREN COUNTY
31
ABSECON CITY
31
ATLANTIC CITY CITY
31
BRIGANTINE CITY
31
BUENA BOROUGH
31
CORBIN CITY CITY
31
EGG HARBOR CITY
31 ESTELL MANOR CITY
31
FOLSOM BOROUGH
51
HAMMONTON TOWN
31
MARGATE CITY
31
NCRTHFIELD CITY
31
PLEASANTVILLE CITY
31
ALLENDALE 30R0UGH
31
BERGENFIELD BOROUGH
31
BOGOTA BOROUGH
31
CARLSTADT 30R0UGH
31
CLOSTER 30R0UGH
31
CRESSKILL BOROUGH
31
DEMAREST BOROUGH
31
DUMONT BOROUGH
31
ELMWOOD PARK BOROUGH
31
EAST RUTHERFORD BOROUGH
31
EDGEWATER 80R0UGH
31
EFERSON BOROUGH
31
ENGLEWOOD CITY
31
FAIR LAWN 30R0UGH
31
FAIRVIEW BOROUGH
31
FRANKLIN LAKES BOROUGH
31
GARFIELD CITY
31
GLEN ROCK BOROUGH
31
HACKENSACK CITY
31
HARRINGTON PARK BOROUGH
31
HASBROUCK HEIGHTS BORO
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGEU5
OF THE
DISTRESSED AREA ELIGIBILITY TE'ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
31 HAWORTH BOROUGH
31
HILLSDALE 30R0UGH
31
HC-HO-KUS BORO
31
LEONIA BOROUGH
31
LITTLE FERRY BOROUGH
31
LODI BOROUGH
31
MAYWOOD BOROUGH
31
MIDLAND PARK BOROUGH
31
MCNTVALE BOROUGH
31
MOONACHIE 30R0UGH
31
NEW MILFORD BOROUGH
31
NCRTH ARLINGTON BOROUGH
31
NORTHVALE 3CR0UGH
31
NORWOOD BOROUGH
31
OAKLAND 30R0UGH
31
ORADELL BOROUGH
31
PALISADES PARK BOROUGH
31
PARAMUS BOROUGH
31
RAMSEY BOROUGH
31
RIOGEFIELD BOROUGH
31
RIOGEFIELD PARK VILLAGE
31
RIDGEWGOD VILLAGE
31
RIVER EDGE BOROUGH
31
ROCKLEIGH HOROUGH
31
RUTHERFORD BOROUGH
31
TENAFLY BOROUGH
31
TETERE0R3 30R0UGH
31
WALDWICK BOROUGH
31
WALLINGTON BOROUGH
31
WESTWOOD BOROUGH
31
WOOD RIDGE BOROUGH
31
BEVERLY CITY
31
BURLINGTON CITY
31
FIEL0S3ORO BOROUGH
31
PALMYRA BOROUGH
31
PEMBERTON BOROUGH
31
RIVERTON BOROUGH
31
WRIGHTSTOWN BOROUGH
31
AUDUBON 30ROUGH
31
AUDUBON PARK BOROUGH
31
BARRINGTON 80R0UGH
31
BELLMAWR BOROUGH
31
BERLIN BOROUGH
31
BROOKLAWN 30R0UGH
31
CAMDEN CITY
31
CHESILHURST BOROUGH
TREASURY
PAGE14G
05/23/78
A
J^
1:
^PARTMENT
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
31 COLLINGSWOOD BOROUGH
31 GIBBSBORO BOROUGH
31 GLOUCESTER CITY CITY
31
HADOONFIELD BOROUGH
31
HADDON HEIGHTS BOROUGH
31
HI-NELLA BOROUGH
31
LAWNS1DE BOROUGH
31
MAGNOLIA BOROUGH
31
MERCHANTVILLE BOROUGH
31
MCUNT EPHRAIM 30R0UGH
31
OAKLYN BOROUGH
31
PINE VALLEY BOROUGH
31
RUNNEMEDE 30R0UGH
31
STRATFORD 3QR0UGH
31
TAVISTOCK BOROUGH
31
WOOO LYNNE BOROUGH
31
CAPE MAY CITY
31
WILDWCOD CITY
31 WOODBINE BOROUGH
31
BRIDGETON CITY
31
MILLVILLE CITY
31
SHILOH BOROUGH
31
VINELAND CITY
31
BELLEVILLE TOWN
31
8L00MFIEL0 TOWN
31 EAST ORANGE CITY
31
IRVINGTCN TOWN
31
MCNTCLAIR TOWN
31
NEWARK CITY
31
ORANGE CITY
31
CLAYTON 30R0UGH
31
GLASSBORO 30R0UGH
31
NATIONAL PARK 30R0UGH
31
NEWFIELD BOROUGH
31
PAULSBORO BOROUGH
31
PITMAN BOROUGH
31
SWEDESBORC BOROUGH
31
WENCNAH 30R0UGH
31
WESTVILLE 30R0UGH
31
WOODBURY CITY
31
WOODBURY HEIGHTS BOROUGH
31
BAYONNE CITY
31
EAST NEWARK BOROUGH
31
GUTTEN3ERG TOWN
31
HARRISON TOWN
31
HOBOKEN CITY
TREASURY
05/23/78
AT 0 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED
AREA
(ELIGIBLE
STATE
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
PAGE147
OF
THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TITLE
JERSEY CITY CITY
SECAUCUS TOWN
UNIGN CITY CITY
WEST NEW YORK TOWN
GLEN GARDNER B O R O U G H
LAMBERTVILLE C I T Y
TRENTON C ITY
CARTERET B O R O U G H
DUNELLEN B O R O U G H
HELMETTA B O R O U G H
H I G H L A N D PARK 30R0UGH
METUCHEN B O R O U G H
MIDDLESEX 3 0 R 0 U G H
NEW BRUNSWICK CITY
PERTH AM30Y CITY
SAYREVILLE B O R O U G H
SCUTH AM30Y CITY
SOUTH PLAINFIELD BOROUSH'
SOUTH RIVER 30R0UGH
ASBURY PARK CITY
EATONTOWN 3 0 R 0 U G H
KEYPORT 30R0UGH
UNION BEACH B O R O U G H
BCONTON TOWN
BUTLER BOROUGH
CHATHAM BOROUGH
CHESTER 30R0UGH
DCVER TCWN
FLORHAM PARK B O R O U G H
LINCOLN PARK B O R O U G H
MADISON BOROUGH
MORRIS P L A I N S BOROUGH
MORRISTOWN TOWN
MCUNTAIN L A K E S 30R0UGH
MCUNT ARLINGTON BOROUGH
NETCONG 30R0UGH
RIVERDALE 3 0 R 0 U G H
ROCKAWAY B O R O U G H
VICTORY GARDENS BOROUGH
WHARTON BOROUGH
SOUTH TOMS RIVER BOROUGH
C L I F T O N CITY
HALEDON BOROUGH
HAWTHORNE 3 0 R 0 U G H
PASSAIC CITY
PATERSON CITY
TEST
05/23/78 AT 31:25
U.S. DEPARTMENT
TDITAQIIPV
OF THE
DISTRESSED AREA ELIGIBILITY TE»ST
(ELIGIBLE GOVERNMENTS)
STATE
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
TITLE
PCMPTON LAKES 30R0UGH
PROSPECT PARK 3CR0UGH
TOTOWA BOROUGH
WANAQUE 30R0UGH
WEST PATERSON BOROUGH
ELMER 80RCUGH
PENNS GROVE 30R0UGH
SALEM CITY
WOODSTOWN 30R0UGH
PEAPACK GLADSTONE B O R O U G H
FRANKLIN BOROUGH
ELIZABETH CITY
FANWOOD BOROUGH
GARWOOD 30RGUGH
KENILWORTH BOROUGH
LINDEN CITY
MOUNTAINSIDE BOROUGH
NEW PROVIDENCE BOROUGH
PLAINFIELD CITY
RAHWAY CITY
RCSELLE BOROUGH
RCSELLE PARK BOROUGH
SUMMIT CITY
ALPHA BOROUGH
PHILLIPS8URG TOWN
BUENA VISTA TOWNSHIP
EGG HARBOR TOWNSHIP
GALLOWAY TOWNSHIP
HAMILTON T O W N S H I P
MULLICA TOWNSHIP
WEYMOUTH TOWNSHIP
LYNDHURST TOWNSHIP
ROCHELLE PARK TOWNSHIP
SADDLE BROOK TOWNSHIP
SO HACKENSACK TOWNSHIP
WASHINGTON TOWNSHIP
WYCKOFF TOWNSHIP
BASS RIVER T O W N S H I P
3URLINGT0N TOWNSHIP
CHESTERFIELD TOWNSHIP
DELANCO TOWNSHIP
FLORENCE TOWNSHIP
HAINESPORT TOWNSHIP
MOORESTCWN T O W N S H I P
NEW HANOVER TOWNSHIP
NCRTH HANOVER TOWNSHIP
TREASURY
PAGEU8
05/2 3/78 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED
AREA
PAGE149
OF THE
ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
TREASURY
TITLE
RIVERSIDE TO WNSHIP
SPRINGFIELD TOWNSHIP
WASHINGTON T O W N S H I P
WESTAMPTON T OWNSHIP
WILLINGBORO TOWNSHIP
W C O D L A N D TOW N S H I P
BERLIN TOWNS HIP
GLOUCESTER T OWNSHIP
HADDON TOWNS HIP
PENNSAUKEN T O W N S H I P
WINSLOW TOWN SHIP
COMMERCIAL T O W N S H I P
DEERFIELD TO WNSHIP
DCWNE TOWNSH IP
F A I R F I E L D TO WNSH IP
H O P E W E L L TOW NSHIP
LAWRENCE TOW NSHIP
MAURICE RIVE R T O W N S H I P
U P P E R DEERFI ELD T O W N S H I P
O E P T F C R D TOW NSHIP
ELK TOWNSHIP
F R A N K L I N TOW NSHIP
G R E E N W I C H TO WNSHIP
H A R R I S O N TOW N S H I P
LCGAN TOWNSH IP
MANTUA TOWNS HIP
MONROE TOWNS HIP
SOUTH H A R R I S ON T O W N S H I P
WASHINGTON T OWNSHIP
W C O L W I C H TOW N S H I P
NCRTH BERGEN T O W N S H I P
WEEHAWKEN TO WNSHIP
OLD BRIDGE T WP
MONROE TOWNS HIP
PISCATAWAY T O W N S H I P
E D I S O N TOWNS HIP
WCODBRIDGE T OWNSHIP
NEPTUNE TOWN SHIP
HAZLET TOWNS HIP
BCONTON TOWN SHIP
CHATHAM TOWN SHIP
D E N V I L L E TOW N S H I P
HARDING TOWN SHIP
MINE HILL TO W N S H I P
MORRIS TOWNS HIP
P A S S A I C TOWN SHIP
TE'ST
05/23/78
^,-<^
;j;^E5pARTMENT
4T
A
PAGE150
OF
THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
31 PEQUANNCCK TOWNSHIP
31
RCCKAWAY TOWNSHIP
31
ROXBURY TOWNSHIP
51
LITTLE FALLS T O W N S H I P
31
WEST MILFORD T O W N S H I P
31
ALLCWAY TOWNSHIP
31
ELSINBORO T O W N S H I P
31
LCWER ALLOWAYS CREEK TWP
31
PENNSVILLE TOWNSHIP
31
OLDMANS TOWNSHIP
31
PITTSGROVE T O W N S H I P
31
CARNEYS POINT TWP
31
UPPER PITTSGROVE TWP
31
FRANKLIN T O W N S H I P
31
BERKELEY H E I G H T S T O W N S H I P
31
CLARK TOWNSHIP
31
HILLSIDE T O W N S H I P
31
SCOTCH PLAINS T O W N S H I P
31
SPRINGFIELD T O W N S H I P
31
UNION TOWNSHIP
31
WINFIELD T O W N S H I P
31
BLAIRSTOWN T O W N S H I P
31
FRANKLIN T O W N S H I P
31
GREENWICH T O W N S H I P
31
HARDWICK T O W N S H I P
31
HOPE TOWNSHIP
31
INDEPENDENCE T O W N S H I P
31
KNOWLTON T O W N S H I P
31
MANSFIELD T O W N S H I P
31
OXFORD T O W N S H I P
31
PAHAQUARRY T O W N S H I P
31
POHATCONa T O W N S H I P
STATE = 31: 308 RECORDS
TREASURY
05/23/78
AT 31:25
U.S. D E P A R T M E N T
DISTRESSED
AREA
(ELIGIBLE GOVERNMENTS)
STATE TITLE
32 CATRON COUNTY
52
DE BACA COUNTY
32
GUADALUPE COUNTY
32
MCRA COUNTY
32
OTERO COUNTY
32
QUAY COUNTY
32
ROOSEVELT COUNTY
32
SAN MIGUEL C O U N T Y
IZ
SOCORRO COUNTY
52
RESERVE VILLAGE
32
CIMARRON VILLAGE
52
MAXWELL VILLAGE
32
SPRINGER TOWN
IZ
FORT SUMNER V I L L A G E
52
HATCH V I L L A G E
32
L A S CRUCES C I T Y
32
BAYARD VILLAGE
32
CENTRAL VILLAGE
IZ
SANTA ROSA CITY
IZ
VAUGHN TOWN
32
C O L U M B U S VILLAGE
52
WAGON MOUND VILLAGE
32
ALAMOGORDO CITY
32
CLOUDCROFT V I L L A G E
52
TULAROSA V I L L A G E
52
SAN JON VILLAGE
52
TOCUMCARI CITY
52
ELIOA TOWN
52
PORTALES CITY
52
DORA VILLAGE
52
FLOYD V I L L A G E
52
L A S VEGAS CITY
52
PECOS VILLAGE
32
MAGDALENA V I L L A G E
32
S O C O R R O CITY
32
E N C I N O VILLAGE
IZ
MOUNTAINAIR TOWN
32
GRANTS TOWN
32
MILAN VILLAGE
STATE = 32: 39 RECORDS
OF THE
TREASURY
ELIGIBILITY
TEIST
PAGE152
oc
05/23/78
A
;^
: 2
^
p A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
55 ALBANY COUNTY
53
ALLEGANY C O U N T Y
35
BROOME COUNTY
55
CATTARAUGUS C O U N T Y
55
CAYUGA COUNTY
55
CHAUTAUQUA C O U N T Y
55
CHEMUNG COUNTY
55
CHENANGO C O U N T Y
55
COLUMBIA C O U N T Y
55
CCRTLAND C O U N T Y
55
DELAWARE C O U N T Y
53
ERIE COUNTY
35
ESSEX COUNTY
33
FRANKLIN C O U N T Y
35
F U L T O N COUNTY
55
GENESEE COUNTY
55
HERKIMER C O U N T Y
55
JEFFERSON COUNTY
33
L E W I S COUNTY
35
MCNROE COUNTY
55
MCNTGOMERY C O U N T Y
53
NASSAU COUNTY
33
NIAGARA COUNTY
33
ONEIDA COUNTY
33
ONONDAGA C O U N T Y
35
ORANGE COUNTY
55
ORLEANS COUNTY
53
O T S E G O COUNTY
35
RENSSELAER C O U N T Y
55
ST LAWRENCE COUNTY
35
SCHENECTADY COUNTY
53
SCHOHARIE COUNTY
35
SCHUYLER COUNTY
55
SENECA COUNTY
53
STEU3EN COUNTY
35
SULLIVAN C O U N T Y
33
ULSTER COUNTY
33
WARREN COUNTY
35
WASHINGTON C O U N T Y
55
WAYNE COUNTY
55
WYOMING COUNTY
53
YATES COUNTY
II
ALBANY CITY
55
C C H O E S CITY
55
COLONIC VILLAGE
53
G R E E N ISLAND V I L L A G E
OF THE T R E A S U R Y
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE153
OF THE
TREASURY
DISTRESSED AREA ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE
35
53
33
33
33
33
33
33
35
33
33
55
53
35
33
35
55
55
53
35
55
55
55
55
53
35
53
55
53
33
33
35
33
35
55
55
55
35
55
53
35
53
33
35
53
35
TITLE
WATERVLIET CITY
ALFRED VIL LAGE
ALMOND VIL LAGE
ANDOVER VI LLAGE
ANGELICA V ILLAGE
BELMONT VI LLAGE
BOLIVAR VI LLAGE
CANASERAGA VILLA GE
CUBA VILLA GE
FILLMORE V ILLAGE
RICHBURG V ILLAGE
WELLSVILLE VILLA GE
BINGHAMTON CITY
ENOICOTT V ILLAGE
JCHNSCN CI TY VIL LAGE
LISLE VILL AGE
PORT DICKI NSON V ILLAGE
WINDSOR VI LLAGE
ALLEGANY V ILLAGE
CATTARAUGU S VILL AGE
OELEVAN VI LLAGE
EAST RANDO LPH VI LLAGE
ELLICCTTVI LLE VI LLAGE
FRANKLINVI LLE VI LLAGE
LIMESTONE VILLAG E
LITTLE VAL LEY VI LLAGE
OLEAN CITY
PORTVILLE VILLAG E
SALAMANCA CITY
SOUTH DAYT ON VIL LAGE
AUBURN CIT Y
AURORA VIL LAGE
CATO VILLA GE
CAYUGA VIL LAGE
FAIR HAVEN VILLA GE
MERIDIAN V ILLAGE
MCRAVIA VI LLAGE
PORT BYRON VILLA GE
UNION SPRI NGS VI LLAGE
WEEDSPORT VILLAG E
6EMUS POIN T VILL AGE
BROCTCN VI LLAGE
CASSADAGA VILLAG E
CELORON VI LLAGE
CHERRY CRE EK VIL LAGE
DUNKIRK CI TY
TEST
0 5 / 2 3 / 7 8 AT 31:25
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TE'ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
35 FALCONER VILLAGE
35
FREDONIA V I L L A G E
35
JAMESTOWN CITY
53
LAKEWOOD V I L L A G E
35
MAYVILLE V I L L A G E
55
PANAMA VILLAGE
55
SHERMAN VILLAGE
55
SILVER CREEK V I L L A G E
53
SINCLAIRVILLE V I L L A G E
35
WESTFIELD V I L L A G E
55
ELMIRA CITY
55
ELMIRA H E I G H T S V I L L A G E
53
HCRSEHEADS V I L L A G E
35
MILLPORT V I L L A G E
55
VAN ETTEN V I L L A G E
55
WELLSBURG V I L L A G E
55
AFTON VILLAGE
35
BAIN8RIDGE V I L L A G E
55
GREENE VILLAGE
53
NEW BERLIN V I L L A G E
35
NORWICH CITY
53
OXFORD VILLAGE
33
SHERBURNE V I L L A G E
33
SMYRNA VILLAGE
55
DANNEMORA V I L L A G E
33
CHATHAM V I L L A G E
35
HUDSON CITY
11
KINDERHOOK V I L L A G E
33
PHILMONT V I L L A G E
33
VALATIE V I L L A G E
H
CORTLAND C I T Y
H
HCMER VILLAGE
33
MCGRAW VILLAGE
35
MARATHON V I L L A G E
55
ANDES VILLAGE
33
DELHI VILLAGE
33
FLEISCHMANNS VILLAGE
35
FRANKLIN V I L L A G E
53
HANCOCK V I L L A G E
33
HOBART VILLAGE
33
MARGARETVILLE VILLAGE
33
SIDNEY VILLAGE
33
STAMFCRO V I L L A G E
33
WALTON VILLAGE
33
8EACCN CITY
33
PCUGHKEEPSIE CITY
PAGE154
OF THE
TREASURY
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
PAGE155
OF THE
TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE
STATE
35
11
33
35
35
55
55
33
35
55
53
35
55
53
33
35
55
53
33
33
35
53
33
33
35
53
55
55
55
55
55
55
55
55
53
35
53
33
11
55
33
33
35
55
53
33
TITLE
AKRON V I L L A G E
ALDEN V I L L A G E
ANGOLA V I L L A G E
BLASOELL VILLAGE
BUFFALO CITY
FARNHAM V I L L A G E
KENMORE VILLAGE
LACKAWANNA CITY
LANCASTER VILLAGE
NCRTH C O L L I N S V I L L A G E
SLOAN V I L L A G E
SPRINGVILLE VILLAGE
TONAWANDA CITY
BLOOMINGDALE VILLAGE
ELIZABETHTOWN VILLAGE
LAKE PLACID V I L L A G E
PORT HENRY V I L L A G E
TICONDEROGA V I L L A G E
8RUSHT0N VILLAGE
BURKE V I L L A G E
CHATEAUGAY VILLAGE
MALONE VILLAGE
TUPPER LAKE V I L L A G E
GLOVERSVILLE CITY
JOHNSTOWN C I T Y
MAYFIELD VILLAGE
NORTHVILLE VILLAGE
ALEXANDER V I L L A G E
BATAVIA CITY
BERGEN VILLAGE
CORFU VILLAGE
ELBA V I L L A G E
LE ROY VILLAGE
OAKFIELD VILLAGE
CATSKILL VILLAGE
CCXSACKIE VILLAGE
TANNERSVILLE VILLAGE
COLD BROOK V I L L A G E
FRANKFORT VILLAGE
HERKIMER VILLAGE
ILION V I L L A G E
LITTLE F A L L S C I T Y
MIODLEVILLE VILLAGE
MCHAWK V I L L A G E
NEWPORT V I L L A G E
POLAND V I L L A G E
GOVERNMENTS)
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. DEPARTMENT
QF
THE
TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE
STATE
33
35
55
53
II
35
35
53
35
33
53
35
53
33
11
33
33
35
55
53
35
55
53
35
55
55
55
53
33
33
35
33
33
35
55
55
33
11
II
II
55
53
35
53
33
II
GOVERNMENTS)
TITLE
WEST W I N F I E L O V I L L A G E
ADAMS V I L L A G E
ALEXANDRIA B A Y V I L L A G E
ANTWERP VILLAGE
BLACK RIVER V I L L A G E
BROWNVILLE VILLAGE
CAPE V I N C E N T V I L L A G E
CARTHAGE VILLAGE
CHAUMONT VILLAGE
CLAYTON VILLAGE
DEFERIET VILLAGE
DEXTER VILLAGE
ELLISBURG VILLAGE
GLEN PARK V I L L A G E
HERRINGS VILLAGE
MANNSVILLE VILLAGE
PHILADELPHIA VILLAGE
SACKETS HARBOR VILLAGE
THERESA VILLAGE
WATERTOWN CITY
WEST C A R T H A G E V I L L A G E
EVANS MILLS VILLAGE
CASTORLAND VILLAGE
CCNSTABLEVILLE VILLAGE
COPENHAGEN VILLAGE
CROGHAN VILLAGE
HARRISVILLE VILLAGE
LOWVILLE VILLAGE
LYONS FALLS VILLAGE
PORT L E Y D E N V I L L A G E
TURIN VILLAGE
AVON V I L L A G E
DANSVILLE VILLAGE
LEICESTER VILLAGE
MOUNT M O R R I S V I L L A G E
CANASTOTA VILLAGE
HAMILTON VILLAGE
MADISON VILLAGE
O N E I D A CITY
EAST ROCHESTER VILLAGE
ROCHESTER CITY
AMES V I L L A G E
AMSTERDAM CITY
CANAJOHARIE VILLAGE
FONDA VILLAGE
FORT JOHNSON VILLAGE
PAGE15G
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
OF THE
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
33
33
35
55
55
35
53
33
35
33
35
53
35
53
35
55
55
35
55
53
35
53
33
33
33
35
55
53
33
11
33
33
33
33
33
33
35
35
53
11
55
55
55
53
33
11
FCRT PLAIN V I L L A G E
FULTONVILLE VILLAGE
HAGAMAN V I L L A G E
NELLISTON
VILLAGE
P A L A T I N E B R I O G E VILLAGE
ST J O H N S V I L L E V I L L A G E
BAXTER E S T A T E S V I L L A G E
3ELLER0SE V I L L A G E
BROOKVILLE V I L L A G E
CEOARHURST V I L L A G E
C E N T R E ISLAND V I L L A G E
COVE NECK V I L L A G E
EAST HILLS V I L L A G E
EAST ROCKAWAY V I L L A G E
EAST W I L L I S T O N V I L L A G E
FARMINGDALE VILLAGE
F L O R A L PK V I L L A G E
F L O N E R HILL
VILLAGE
FREEPORT VILLAGE
GLEN COVE CITY
G R E A T NECK V I L L A G E
G R E A T NECK E S T A T E S V I L L A G E
G R E A T NECK PLAZA VILLAGE
HEMPSTEAD V I L L A G E
HEWLETT BAY PARK VILLAGE
HEWLETT NECK V I L L A G E
ISLAND PARK VILLAGE
KENSINGTON VILLAGE
LAKE SUCCESS V I L L A G E
LATTINGTOWN VILLAGE
LAUREL HOLLCW V I L L A G E
LAWRENCE V I L L A G E
LONG BEACH C I T Y
LYNBRCOK V I L L A G E
MALVERNE V I L L A G E
MANORHAVEN V I L L A G E
MASSAPEQUA PARK VILLAGE
MATINECOCK V I L L A G E
MILL NECK V I L L A G E
MINEOLA V I L L A G E
MUTTONTOWN V I L L A G E
NEW HYDE PARK V I L L A G E
NCRTH HILLS V I L L A G E
OLD WEST3URY V I L L A G E
OYSTER BAY C O V E VILLAGE
PLANDOME V I L L A G E
TREASURY
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
PAGE158
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
33 PLANDOME HEIGHTS VILLAGE
33
PLANDCME MANOR V I L L A G E
35
PORT WASHINGTON N VILLAGE
33
RCCKVILLE CENTRE VILLAGE
35
ROSLYN VILLAGE
53
ROSLYN HARBOR VILLAGE
33
RUSSELL G A R D E N S VILLAGE
33
SAODLE ROCK VILLAGE
33
SEA CLIFF VILLAGE
35
SOUTH FLORAL PARK VILLAGE
53
STEWART MANOR VILLAGE
33
THOMASTON V I L L A G E
33
UPPER BROCKVILLE VILLAGE!
33
VALLEY STREAM V I L L A G E
35
WESTBURY V I L L A G E
53
WILLISTON PARK VILLAGE
33
WOODSBURGH V I L L A G E
33
ATLANTIC B E A C H
33
NEW YORK CITY
33
BARKER VILLAGE
33
L E W I S T O N VILLAGE
33
LCCKPORT CITY
33
MIDDLEPORT V I L L A G E
33
NIAGARA F A L L S CITY
33
NORTH TCNAWANDA CITY
33
W I L S O N VILLAGE
33
YOUNGSTOWN V I L L A G E
33
BOONVILLE V I L L A G E
53
B R I D G E W A T E R VILLAGE
11
CAMDEN VILLAGE
33
CLAYVILLE V I L L A G E
33
CLINTON VILLAGE
SI
HOLLAND PATENT VILLAGE
33
NEW HARTFORO V I L L A G E
33
NEW YORK M I L L S V I L L A G E
33
ONEIDA C A S T L E VILLAGE
33
O R I S K A N Y VILLAGE
33
ORISKANY F A L L S VILLAGE
33
P R O S P E C T VILLAGE
33
R E M S E N VILLAGE
33
ROME CITY
II
SHERRILL CITY
33
BARNEVELD VILLAGE
33
UTICA CITY
33
VERNON VILLAGE
33
WATERVILLE VILLAGE
TREASURY
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
PAGE159
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
33 WHITES60RC VILLAGE
33
YORKVILLE V I L L A G E
33
SYLVAN BEACH V I L L A G E
35
BALDWINSVILLE VILLAGE
33
CAMILLUS VILLAGE
33
EAST SYRACUSE V I L L A G E
35
ELBRIOGE VILLAGE
55
FABIUS VILLAGE
33
FAYETTEVILLEi V I L L A G E
33
JORDAN VILLAGE
33
LIVERPOOL V I L L A G E
35
MARCELLUS V I L L A G E
55
MINOA V I L L A G E
53
NORTH SYRACUSE V I L L A G E
33
SOLVAY V I L L A G E
33
SYRACUSE CITY
35
TULLY V I L L A G E
33
C L I F T C N S P R I N G S VILLAGE
35
EAST B L O O M F I E L D VILLAGE
53
GENEVA CITY
35
PHELPS VILLAGE
55
CHESTER VILLAGE
55
CORNWALL VILLAGE
53
G R E E N W O O D LAKE V I L L A G E
33
HARRIMAN V I L L A G E
33
HIGHLAND FALLS VILLAGE
35
MAYBROOK V I L L A G E
55
MIDDLETOWN CITY
55
MONROE VILLAGE
55
MCNTGOMERY V I L L A G E
53
NEWBURGH C I T Y
35
PORT J E R V I S CITY
55
T U X E D O PARK V I L L A G E
33
UNIONVILLE VILLAGE
33
WALDEN V I L L A G E
33
WASHINGTONVILLE VILLAGE
33
K I R Y A S JOEL V I L L A G E
33
F U L T O N CITY
33
PHOENIX V I L L A G E
33
C H E R R Y VALLEY V I L L A G E
35
CCOPERSTOWN VILLAGE
33
GILBERTSVILLE VILLAGE
35
LAURENS VILLAGE
55
MILFORO V I L L A G E
55
MORRIS VILLAGE
55
ONEONTA CITY
TREASURY
05/2 3/78 AT 31:25
U.S. DEPARTMENT
DISTRESSED
PAGE160
OF THE
AREA ELIGIBILITY TE'ST
(ELIGIBLE GOVERNMENTS)
STATE
TREASURY
TITLE
OTEGO VILLAGE
53
RICHFIELD SPRINGS VILLAGE
33
SCHENEVUS VILLAGE
33
UNADILLA VILLAGE
33
COLD SPRING VILLAGE
33
CASTLEION ON HUDSON VILL
33
HOOSICK FALLS VILLAGE
33
NASSAU VILLAGE
33
RENSSELAER CITY
33
SCHAGHTICOKE VILLAGE
33
TROY CITY
33
VALLEY FALLS VILLAGE
53
HILL3URN VILLAGE
11
NYACK VILLAGE
33
CANTON VILLAGE
35
EDWARDS VILLAGE
33
GCUVERNEJR VILLAGE
33
HAMMOND VILLAGE
33
HERMON VILLAGE
33
HEUVELTON VILLAGE
53
MASSENA VILLAGE
35
MORRISTOWN VILLAGE
33
NORWOOD VILLAGE
33
0GDENS3URG CITY
33
POTSDAM VILLAGE
33
RENSSELAER FALLS VILLAGE
33
RICHVILLE VILLAGE
35
WAODINGTON VILLAGE
53
CORINTH VILLAGE
33
HECHANICVILLE ^ J T Y
33
SCHUYLERVILLE " L L A G E
33
SOUTH GLENS FALLS VILLAGE
35
VICTORY TOWN
53
WATERFORL) VILLAGE
33
RCUNO LAKE VILLAGE
33
DELANSON VILLAGE
33
SCHENECTADY CITY
11
SCOTIA VILLAGE
SI
CCBLESK1LL VILLAGE
35
ESPERANCE VILLAGE
33
MIODLEBURGH VILLAGE
33
M
D
VILLAGE
R rC HMC^VILLE
33
<;rnGHARlE VILLAGE
33
S ^ R O N SPRINGS VILLAGE
33
RURDETT VILLAGE
33
B U
M GN?OUR FALLS VILLAGE
33
0 5 / 2 3 / 7 8 AT 31:25
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TE»ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
33 WATKINS GLEN VILLAGE
35
INTERLAKEN V I L L A G E
53
LODI V I L L A G E
35
OVID V I L L A G E
33
SENECA F A L L S V I L L A G E
SI
WATERLOO VILLAGE
33
ADDISON VILLAGE
33
ARKPORT V I L L A G E
33
AVOCA V I L L A G E
35
BATH VILLAGE
53
CANISTEC VILLAGE
33
CORNING CITY
33
HAMMONDSPORT V I L L A G E
35
HORNELL CITY
33
NORTH HORNELL V I L L A G E
33
P A I N T E D POST V I L L A G E
35
RIVERSIDE V I L L A G E
55
SAVONA VILLAGE
55
SCUTH CORNING V I L L A G E
55
WAYLAND VILLAGE
33
WCODHULL VILLAGE
35
GREENPORT V I L L A G E
53
PATCHOGUE V I L L A G E
35
BL00MING8URGH VILLAGE
55
JEFFERSGNVILLE VILLAGE
55
LIBERTY VILLAGE
55
MCNTICELLO V I L L A G E
53
WOOORIOGE V I L L A G E
35
WURTSOORO V I L L A G E
53
FREEVILLE VILLAGE
35
ITHACA CITY
55
TRUMANSBURG V I L L A G E
33
ELLENVILLE VILLAGE
33
KINGSTON CITY
35
NEW PALTZ V I L L A G E
33
PINE HILL V I L L A G E
SI
RCSENDALE V I L L A G E
11
SAUGERTIES V I L L A G E
35
G L E N S FALLS
55
ARGYLE VILLAGE
55
CAMBRIDGE V I L L A G E
53
F C R T ANN V I L L A G E
33
FCRT EDWARD V I L L A G E
33 / GRANVILLE V I L L A G E
33
GREENWICH VILLAGE
33
HUDSON F A L L S V I L L A G E
PAGE161
OF THE
TREASURY
05/23/78 A J j ; S ^ p A R T M E N T
PAGE1S2
QF
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
35 SALEM VILLAGE
55
WHITEHALL V I L L A G E
53
CLYDE VILLAGE
33
L Y O N S VILLAGE
33
NEWARK VILLAGE
35
PALMYRA V I L L A G E
53
RED CREEK V I L L A G E
55
SAVANNAH V I L L A G E
35
SODUS VILLAGE
55
WCLCOTT V I L L A G E
33
ELMSFORD V I L L A G E
35
MOUNT KISCO V I L L A G E
55
MOUNT VERNON C I T Y
55
NEW R O C H E L L E C I T Y
53
NORTH TARRYTOWN V I L L A G E
35
OSSINING V I L L A G E
55
PORT CHESTER V I L L A G E
55
Y C N K E R S CITY
55
ATTICA VILLAGE
55
CASTILE V I L L A G E
55
PIKE VILLAGE
55
DRESDEN V I L L A G E
55
DUNDEE VILLAGE
55
PENN YAN V I L L A G E
55
COLONIE TOWN
55
G R E E N ISLAND TOWN
55
ALFRED TOWN
55
ALLEN TCWN
55
ALMA TOWN
53
ALMOND TOWN
35
AMITY TOWN
53
ANDOVER TOWN
II
ANGELICA TOWN
35
BELFAST TOWN
55
3IRDSALL TOWN
55
BOLIVAR TCWN
35
BURNS TOWN
55
CANEADEA TOWN
55
C E N T E R V I L L E TOWN
55
CLARKSVILLIE TOWN
55
CU3A TOWN
55
F R I E N D S H I P TOWN
53
G E N E S E E TOWN
35
GRANGER TOWN
55
GROVE TOWN
53
HUME TOWN
THE TREASURY
0 5 / 2 3/78 AT 3 1 : 2 5
U.S. DEPARTMENT
DISTRESSED
AREA
(ELIGIBLE
STATE
35
53
33
33
35
53
35
55
53
33
33
35
55
53
35
55
55
55
55
55
53
35
55
53
33
35
55
53
53
55
55
55
55
33
33
33
35
55
53
35
55
53
35
53
35
53
TITLE
I N D E P E N D E N C E TOWN
NEW HUDSON TOWN
RUSHFORD TOWN
SCIO TOWN
WARD TOWN
W E L L S V I L L E TOWN
WEST ALMOND TOWN
W I L L I N G TCWN
WIRT TOWN
BARKER TOWN
B I N G H A M T O N TOWN
C H E N A N G O TOWN
D I C K I N S O N TOWN
KIRKWOOD TOWN
MAINE TOWN
S A N F O R D TOWN
UNION TOWN
W I N D S O R TOWN
ALLEGANY T O W N
A S H F O R D TOWN
C A R R O L L T O N TOWN
C G L D S P R I N G TOWN
CONEWANGO TOWN
D A Y T O N TOWN
EAST OTTO TOWN
E L L I C O T T V I L L E TOWN
F A R M E R S V I L L E TOWN
F R A N K L I N V I L L E TOWN
F R E E O O M TOWN
G R E A T VALLEY TOWN
HINSDALE TOWN
HUMPHREY TOWN
ISCHUA TOWN
LEON TOWN
LITTLE VALLEY TOWN
LYNDON TOWN
M A C H I A S TOWN
MANSFIELD TOWN
NAPOLI TOWN
NEW ALBION TOWN
OLEAN TOWN
OTTO TUWN
PERRYS8URG TOWN
PERSIA TOWN
PORTVILLE TOWN
RANDOLPH TOWN
PAGE163
OF THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TEIST
0 5 / 2 3 / 7 8 AT 31:25
U.S. DEPARTMENT
DISTRESSED
33
35
11
11
35
55
35
53
33
33
33
33
35
53
55
53
33
33
33
35
11
11
11
11
55
55
55
55
55
53
33
35
53
33
33
35
11
55
55
53
35
53
11
33
35
55
OF THE
TREASURY
AREA ELIGIBILITY
(ELIGIBLE
STATE
PAGE164
TITLE
RED HOUSE TOWN
SALAMANCA TOWN
S C U T H VALLEY TOWN
Y O R K S H I R E TOWN
AURELIUS TOWN
8 R U T U S TOWN
C A T O TOWN
CONQUEST TOWN
F L E M I N G TOWN
G E N O A TOWN
IRA TOWN
L E D Y A R D TOWN
L O C K E TOWN
MENTZ TOWN
MCNTEZUMA TOWN
MORAVIA TOWN
N I L E S TGWN
OWASCO TOWN
S C I P I O TOWN
S E M P R O N I U S TOWN
S E N N E T T TOWN
S P R I N G P O R T TOWN
STERLING TOWN
SUMMERHILL TOWN
T H R O O P TOWN
V E N I C E TOWN
V I C T O R Y TOWN
A R K W R I G H T TOWN
8USTI TOWN
C A R R O L L TOWN
C H A R L O T T E TOWN
C H A U T A U Q U A TOWN
C H E R R Y CREEK TOWN
CLYMER TOWN
D U N K I R K TOWN
E L L E R Y TOWN
E L L I C O T T TOWN
E L L I N G T O N TOWN
F R E N C H CREEK TOWN
G E R R Y TOWN
H A N O V E R TOWN
H A R M O N Y TOWN
KIANTONE TOWN
MINA TOWN
N C R T H H A R M O N Y TOWN
P O L A N D TOWN
GOVERNMENTS)
TEST
0 5 / 2 5 / 7 3 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
55 POMFRET TOWN
53
P O R T L A N D TUWN
35
RIPLEY TOWN
53
S H E R I D A N TOWN
II
SHERMAN TOWN
33
STOCKTON TOWN
35
VILLENOVA TOWN
53
WESTFIELD TOWN
35
ASHLAND TOWN
55
B A L D W I N TOWN
53
CATLIN TOWN
33
CHEMUNG TOWN
33
ELMIRA TOWN
33
ERIN TOWN
35
H C R S E H E A D S TOWN
53
SCUTHPOKT TOWN
55
VAN ETTEN TOWN
11
VETERAN TOWN
55
AFTON TCWN
55
BAINBRIDGE TOWN
55
C O L U M B U S TOWN
55
C O V E N T R Y TOWN
55
GERMAN TOWN
55
G R E E N E TOWN
53
G U I L F O R D TOWN
35
L I N C K L A E N TOWN
35
MCDONOUGH TOWN
55
NEW BERLIN TOWN
55
NCRTH NORWICH TOWN
55
NORWICH TOWN
53
OTSELIC TOWN
33
OXFORD TOWN
33
PHARSALIA TOWN
33
PITCHER TOWN
33
PLYMOUTH TOWN
33
PRESTON TOWN
35
SHERBURNE TOWN
55
SMITHVILLE TOWN
55
SMYRNA TOWN
55
ALTONA TOWN
53
BLACK BROOK TOWN
35
C L I N T O N TOWN
53
DANNEMURA TOWN
33
ELLENBUR3 TOWN
35
ANCRAM TOWN
55
A U S T E R L I T Z TOWN
PAGE165
OF THE
TREASURY
0 5 / 2 5 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
53 CANAAN TOWN
35
CHATHAM TOWN
55
CLAVERAC* TOWN
55
CLERMONT TOWN
53
COPAKE TOWN
55
GERMANTOWN TOWN
55
GHENT TOWN
55
GREENPORT TOWN
55
HILLSDALE TOWN
33
KINDERHOOK TOWN
35
LIVINGSTON TOWN
55
NEW LEBANON TOWN
53
STOCKPORT TOWN
35
STUYVESANT TOWN
55
TAGHKANIC TOWN
55
C I N C I N N A T U S TOWN
35
CCRTLANDVILLE TOWN
53
CUYLER TOWN
35 FREETOWN TOWN
55
HARFORD TCWN
33
HOMER TOWN
35
LAPEER TOWN
55
MARATHON TOWN
55
PREBLE TOWN
55
SCOTT TOWN
55
SOLON TOWN
55
TAYLOR TOWN
53
TRUXTCN TOWN
33
VIRGIL TOWN
33
WILLET TOWN
33
ANOES TOWN
35
80VINA TOWN
55
COLCHESTER TOWN
53
DAVENPORT TOWN
33
DELHI TOWN
35
DEPOSIT TOWN
35
FRANKLIN TOWN
55
HAMDEN TOWN
33
HANCOCK TOWN
33
HARPERSFIELD. TOWN
33
KORTRIGHT TOWN
11
MASONVILLE TOWN
33
MEREOITH TOWN
33
MIODLETOWN TOWN
33
ROXBURY TOWN
35
SIDNEY TOWN
PAGElbb
OF
THE
TREASURY
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TE«ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
35 STAMFCRD TOWN
33
T O M P K I N S TOWN
35
WALTON TOWN
33
AMENIA TOWN
35
D C V E R TOWN
55
P O U G H K E E P S I E TOWN
55
A L D E N TOWN
53
AURORA TOWN
35
BOSTON TOWN
55
BRANT TOWN
55
C H E E K T O W A G A TOWN
33
CLARENCE TOWN
11
CCLOEN TOWN
35
C O L L I N S TOWN
55
C O N C O R D TOWN
55
EOEN TOWN
53
ELMA TOWN
33
E V A N S TOWN
35
G R A N D ISLAND TOWN
55
HAMBURG TOWN
33
H O L L A N O TOWN
53
L A N C A S T E R TOWN
33
MARILLA TOWN
35
NEWSTEAD TOWN
53
NCRTH C O L L I N S TOWN
35
SAROINIA TOWN
55
TCNAWANDA TOWN
55
W A L E S TOWN
55
WEST SENECA TOWN
55
C H E S T E R F I E L D TOWN
55
CROWN POINT TOWN
53
E L I Z A B E T H T O W N TOWN
SI
E S S E X TCWN
33
JAY TCWN
35
KEENE TOWN
55
L E W I S TOWN
55
MINERVA TOWN
53
MORIAH TOWN
33
NEWCOMB TOWN
35
NORTH ELBA TOWN
55
NCRTH HUDSON TOWN
33
ST ARMAND TOWN
35
S C H R O O N TOWN
53
T I C O N D E R O G A TOWN
35
W E S T P O R T TOWN
55
WILLSBORO TOWN
PAGE167
OF
THE
TREASURY
05/25/76
A
^;:2E%ARTM£Nf
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
55
55
55
55
55
35
55
55
55
55
55
55
33
11
33
35
33
35
55
55
55
55
55
53
33
35
55
53
II
11
33
33
35
53
33
35
53
33
35
55
55
55
55
35
53
TITLE
WILMINGTON TOWN
ALTAMONT TOWN
BANGOR TOWN
BELLMONT TOWN
BCMBAY TOWN
BRANDON TOWN
BRIGHTON TOWN
BURKE TCWN
CHATEAUGAY TOWN
CONSTABLE TOWN
DICKINSON TOWN
DUANE TOWN
FORT COVINGTON TOWN
FRANKLIN TOWN
HARRIETSTOWN TOWN
MALONE TOWN
MCIRA TOWN
SANTA CLARA TOWN
WAVERLY TOWN
WESTVILLE TOWN
BLEECKER TOWN
BROADALBIN TOWN
CAROGA TOWN
EPHRATAH TOWN
JOHNSTOWN TOWN
MAYFIELD TOWN
NORTHAMPTON TOWN
OPPENHEIM TOWN
PERTH TOWN
STRATFORD TOWN
ALABAMA TOWN
ALEXANDER TOWN
BATAVIA TOWN
BERGEN TOWN
BETHANY TOWN
BYRON TOWN
DARIEN TOWN
ELBA TOWN
LE ROY TOWN
OAKFIELD TOWN
PAVILION TOWN
PEMBROKE TOWN
LONG
WINDHAM
BENSON
STAFFORO
LAKE
TOWN
TOWN
TOWN
TOWN
Qfr J H E
TREASURY
PAGE168
0 5 / 2 3 / 7 8 AT 31:25
U.S. D E P A R T M E N T OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE G O V E R N M E N T S )
STATE TITLE
35
55
53
33
35
33
33
33
33
33
35
33
55
53
35
55
55
35
53
33
11
11
33
33
35
55
55
53
33
35
55
55
53
35
55
55
55
33
35
53
35
33
35
55
53
35
MOREHOUSE TOWN
W E L L S TOWN
C O L U M B I A TOWN
DANUBE TOWN
F A I R F I E L D TOWN
F R A N K F O R T TOWN
GERMAN F L A T T S TOWN
HERKIMER TOWN
L I T C H F I E L D TOWN
LITTLE F A L L S TOWN
MANHEIM TOWN
NEWPORT TOWN
NORWAY TOWN
OHIO TOWN
RUSSIA TOWN
SALISBURY TOWN
S C H U Y L E R TOWN
STARK TOWN
WARREN TOWN
WEBB TOWN
W I N F I E L O TOWN
ADAMS TOWN
ALEXANDRIA TOWN
A M W E R P TOWN
6R0WNVILLE TOWN
CAPE VINCENT TOWN
C H A M P I O N TOWN
C L A Y T O N TOWN
ELLISBURG TOWN
HENDERSON TOWN
HOUNSFIELO TOWN
LE RAY TOWN
LORRAINE TOWN
LYME TOWN
O R L E A N S TOWN
PAMELIA TOWN
PHILADELPHIA TOWN
RODMAN TOWN
RUTLAND TOWN
THERESA TOWN
WATERTOWN TOWN
WILNA TOWN
WORTH TCWN
CROGHAN TOWN
DENMARK TOWN
DIANA T C M N
PAGE169
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE170
OF THE
DISTRESSED AREA ELIGIBILITY TElST
(ELIGI8LE GOVERNMENTS)
STATE TITLE
33 GREIG TOWN
33
HARRISBURG TOWN
33
LEWIS TCWN
33
LEYOEN TOWN
33
LOWVILLE TOWN
33
LYONSDALE TOWN
33
MARTINSBURG TOWN
33
MONTAGUE TOWN
33
NEW 8REHEM TOWN
33
OSCEOLA TOWN
35
PINCKNEY TOWN
53
TURIN TOWN
33
WATSON TOWN
33
WEST TURIN TOWN
33
CALEDONIA TOWN
35
GROVELAND TOWN
53
LEICESTER TOWN
33
MOUNT MORRIS TOWN
33
NORTH DANSVILLE TOWN
35
OSSIAN TOWN
53
WEST SPARTA TOWN
35
YORK TOWN
53
8R00KFIELD TOWN
11
DE RUYTER TOWN
35
FENNER TOWN
55
GEORGETOWN TOWN
55
HAMILTON TOWN
53
LENOX TOWN
33
NELSON TOWN
33
SMITHFIELD TOWN
35
CLARKSON TOWN
55
RUSH TOWN
33
AMSTERDAM TOWN
33
CANAJOHARIE TOWN
33
CHARLESTON TOWN
35
FLORIDA TOWN
33
GLEN TOWN
33
MINOEN TOWN
35
MOHAWK TOWN
55
PALATINE TOWN
33
RCOT TOWN
33
ST JOHNSVILLE TOWN
33
HEMPSTEAD TOWN
33
NORTH HEMPSTEAD TOWN
35
OYSTER BAY TOWN
53
CAMBRIA TOWN
TREASURY
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
33 HARTLAND TOWN
33
L E W I S T O N TOWN
35
L C C K P O R T TOWN
53
NEWFANE TOWN
35
NIAGARA TOWN
55
PENDLETON TOWN
55
PORTER TOWN
55
R G Y A L T O N TOWN
55
S O M E R S E T TOWN
55
W H E A T F I E L D TOWN
55
WILSON TOWN
55
ANNSVILLE TOWN
53
AUGUSTA TCWN
35
AVA TCWN
53
BOONVILLE TOWN
33
B R I D G E W A T E R TOWN
33
CAMDEN TOWN
33
DEERFIELD TOWN
35
F L O R E N C E TOWN
55
FLOYD TOWN
33
F O R E S T P O R T TOWN
33
K I R K L A N D TOWN
35
LEE TOWN
33
MARCY TOWN
35
MARSHALL TOWN
55
NEW HARTFORD TOWN
53
P A R I S TOWN
33
REMSEN TOWN
35
S A N G E R F I E L D TOWN
55
S T E U B E N TOWN
55
T R E N T O N TOWN
55
VERNON TOWN
55
VERONA TOWN
55
VIENNA TOWN
53
WESTERN TOWN
35
W E S T M O R E L A N D TOWN
11
WHITESTOWN TOWN
33
C A M I L L U S TOWN
11
C I C E R O TOWN
35
DE WITT TOWN
33
ELBRIDGE TOWN
35
F A B I U S TOWN
53
G E D D E S TOWN
11
L A F A Y E T T E TOWN
11
L Y S A N D E R TOWN
11
MARCELLUS TOWN
PAGE17L
OF THE
TREASURY
05/23/78 AT ^ ' 2 |
p A R T M E M T
QF
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
33 ONONDAGA TOWN
33
OTISCC TOWN
33
PCMPEY TOWN
33
SALINA TOWN
33
SKANEATELES TOWN
33
SPAFFORD TOWN
33
TULLY TOWN
33
VAN BUREN TOWN
53
GCRHAM TOWN
35
HOPEWELL TOWN
33
BLOOMING GROVE TOWN
35
CHESTER TOWN
33
CORNWALL TOWN
33
CRAWFORD TOWN
33
DEERPARK TOWN
33
GREENVILLE TOWN
33
HIGHLANDS TOWN
35
MONROE TOWN
53
MONTGOMERY TOWN
33
MOUNT HOPE TOWN
35
NEWBURGH TOWN
33
NEW WINDSOR TOWN
33
TUXEDO TOWN
33
WALLKILL TOWN
33
WAWAYANDATOWN
33
BARRE TOWN
53
CARLTON TOWN
33
CLARENDON TOWN
33
GAINES TOWN
II
MURRAY TOWN
33
RIDGEWAY TOWN
33
SHELBY TOWN
33
80YLSTON TOWN
33
NEW HAVEN TOWN
35
BURLINGTON TOWN
33
BUTTERNUTS TOWN
33
CHERRY VALLEY TOWN
35
DECATUR TOWN
53
EOMESTON TOWN
33
EXETER TOWN
33
HARTWICK TOWN
33
LAURENS TOWN
35
MARYLAND TOWN
33
MIDDLEFIELD TOWN
53
M1LFORD TOWN
*7
MH3RTS
TOWN
THE
TRE,SURY
'
05/2 3/78 AT 3 1 : 2 5
U.S. DEPARTMENT
DISTRESSED
AREA
(ELIGIBLE
STATE
35
53
33
33
33
35
53
35
33
33
35
55
55
53
33
35
53
35
53
33
33
55
53
55
55
53
35
55
55
55
53
33
33
33
35
55
55
55
55
55
55
55
53
35
55
55
TITLE
NEW LISBON TOWN
O K E O N T A TOWN
OTEGO TOWN
OTSEGO TOWN
P I T T S F I E L D T OWN
P L A I N F I E L D T OWN
RICHFIELD TO WN
ROSEBOOM TOW N
S P R I N G F I E L D TOWN
UNADILLA TOW N
W E S T F O R D TOW N
W O R C E S T E R TO WN
BERLIN TOWN
BRUNSWICK TO WN
G R A F T O N TOWN
HOOSICK TOWN
NASSAU TOWN
NCRTH GREENB USH TOWN
PETERSBRUG T OWN
PITTSTOWN TO WN
POESTENKILL TOWN
SAND LAKE
S C H A G H T I C O K E TOWN
SCHCDACK TOW N
S T E P H E N T 3 W N TOWN
BRASHER TOWN
CANTON TOWN
CLARE TOWN
C L I F T O N TCWN
COLTON TOWN
DE KALB TOWN
DE PEYSTER TOWN
E D W A R D S TOWN
FINE TOWN
F O W L E R TOWN
GCUVERNEUR T OWN
HAMMONO TOWN
HERMON TOWN
H C P K I N T O N TO WN
LAWRENCE TOW N
LISBON TOWN
L O U I S V I L L E T OWN
MACOMB TOWN
MADRID TOWN
MASSENA TOWN
MORRISTOWN TOWN
PAGE173
OF
THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TE'ST
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
33
33
35
33
33
33
33
35
53
33
33
33
35
11
11
11
35
53
33
33
33
33
35
33
33
11
33
33
35
53
IS
IS
SS
33
11
11
33
35
53
33
33
33
33
33
33
33
NORFOLK TOWN
OSWEGATCHIE TOWN
PARISHVILLE TOWN
PIERCEFIELD TOWN
PIERREPONT TOWN
PITCAIRN TOWN
POTSDAM TOWN
RCSSIE TOWN
RUSSELL TOWN
STOCKHOLM TOWN
WADDINGTON TOWN
CORINTH TCWN
ROTTERDAM TOWN
BLENHEIM TOWN
BROOME TOWN
CARLISLE TOWN
COBLESKILL TOWN
CONESVILLE TOWN
ESPERANCE TOWN
FULTON TOWN
GILBOA TOWN
JEFFERSON TOWN
MIDDLEBURGH TOWN
RICHMONOVILLE TOWN
SCHOHARIE TOWN
SEWARD TOWN
SHARON TOWN
SUMMIT TOWN
WRIGHT TOWN
CATHARINE TOWN
CAYUTA TOWN
OIX TOWN
HECTOR TOWN
MCNTOUR TOWN
ORANGE TOWN
READING TOWN
TYRONE TOWN
COVERT TOWN
FAYETTE TOWN
JUNIUS TOWN
LCDI TOWN
OVID TOWN
ROMULUS TOWN
SENECA FALLS TOWN
TYRE TOWN
VARICK TOWN
0 5 / 2 3 / 7 8 AT 31:25
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
35
33
35
53
35
55
55
53
53
33
35
55
55
55
55
53
55
55
53
33
35
55
55
53
IS
35
53
55
53
35
55
55
55
53
35
33
35
33
33
35
53
33
35
55
53
35
WATERLOO TOWN
ADDISON TOWN
AVOCA TOWN
BATH TOWN
BRADFORD TOWN
CAMERON TCWN
C A M P B E L L TOWN
CA.NISTEO TOWN
CATCN TOWN
CORNING TOWN
DANSVILLE TOWN
ERWIN TOWN
F R E M O N T TOWN
GREENWOOD TOWN
HARTSVILLE TOWN
HCRNBY TOWN
HORNELLSVILLE TO
HOWARD TOWN
JASPER TOWN
LINDLEY TOWN
PRATTS8URG TOWN
PULTENEY TOWN
RATHBONE TOWN
T H U R S T O N TOWN
TROUPSBURG TOWN
TUSCAPORA TOWN
UR8ANA TOWN
WAYLAND TOWN
WAYNE TCWN
WEST UNION TOWN
WHEELER TOWN
WOODHULL TOWN
BA8YL0N TOWN
BETHEL TOWN
C A L L I C O O N TOWN
CCCHECTON TOWN
DELAWARE TOWN
FALLSBURJ
TOWN
F O R E S T B U R G H TOWN
FREMONT TOWN
HIGHLAND TOWN
LIBERTY TOWN
MAMAKATING TOWN
NEVERSINK TOWN
ROCKLAND TOWN
THOMPSON TOWN
PAGE175
OF THE TREASURY
0 5 / 2 5 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T OF THE TREASURY
D I S T R E S S E D AREA E L I G I B I L I T Y TEIST
(ELIGIBLE
STATE
55
55
55
53
35
55
33
11
11
IS
IS
35
33
33
35
53
33
SS
33
55
SS
SS
SS
53
33
35
53
35
53
SS
35
53
35
55
53
33
35
53
35
55
33
33
33
33
35
55
TITLE
DANBY TOWN
E N F I E L D TOWN
G R O T O N TOWN
ITHACA TOWN
U L Y S S E S TOWN
D E N N I N G TOWN
E S O P U S TOWN
G A R D I N E R TOWN
H A R D E N B E R G H TOWN
HURLEY TOWN
K I N G S T O N TOWN
LLOYD TOWN
MARBLETOwN TOWN
M A R L B O R O U G H TOWN
NEW PALTZ TOWN
OLIVE TOWN
P L A T T E K I L L TOWN
ROCHESTER TOWN
ROSENDALE TOWN
S A U G E R T I E S TOWN
SHANOAKEN TOWN
SHAWANGUNK TOWN
U L S T E R TOWN
WAWARSING TOWN
WOODSTOCK TOWN
B O L T O N TOWN
LAKE GEORGE TOWN
C H E S T E R TOWN
HAGUE TOWN
H C R I C O N TOWN
JOHNSBURG TOWN
LAKE L U Z E R N E TOWN
QUEENSBURY TOWN
STONY CREEK TOWN
THURMAN TOWN
W A R R E N S B U R G TOWN
ARGYLE TOWN
CAMBRIOGE TOWN
D R E S D E N TOWN
E A S T O N TOWN
F O R T ANN TOWN
F C R T EDWARD TOWN
G R A N V I L L E TOWN
G R E E N W I C H TOWN
H A M P T O N TOWN
H A R T F O R D TOWN
GOVERNMENTS)
PAGE17G
0 5 / 2 5 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED
AREA
PAGE177.
OF THE
ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE
53
33
33
35
53
35
55
33
33
35
53
35
33
35
55
53
33
33
35
55
55
53
35
55
55
53
33
33
35
55
55
55
33
33
33
TITLE
HEBRON TOW N
J A C K S O N TO WN
KINGSBURY TOWN
PUTNAM TOW N
SALEM TOWN
WHITE CREE K TOWN
WHITEHALL TOWN
ARCADIA TO WN
GALEN TOWN
HURON TOWN
L Y O N S TOWN
PALMYRA TO WN
W I L L I A M S O N TOWN
W C L C O T T TO WN
OSSINING T OWN
RYE TOWN
ATTICA TOW N
BENNINGTON TOWN
C A S T I L E TO WN
C C V I N G T C N TOWN
GAINESVILL E TOWN
PERRY TOWN
PIKE TOWN
SHELDON TO WN
WARSAW TOW N
WETHERSFIE LD. TOWN
BARRINGTON TOWN
BENTON TOW N
ITALY TCWN
JERUSALEM TOWN
MIDDLESEX TOWN
MILC TOWN
POTTER TOW N
S T A R K E Y TO WN
TCRREY TOW N
S T A T E = 33:
1185
TREASURY
RECORDS
TEST
05/2 3/78 AT 31:25
U.S. DEPARTMENT
PAGE178.
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
34 ALAMANCE COUNTY
34
ASHE COUNTY
34
AVERY COUNTY
54
BERTIE COUNTY
34
BLADEN COUNTY
34
CABARRUS COUNTY
34
CALDWELL COUNTY
34
CASWELL. COUNTY
34
CHATHAM COUNTY
34
CHEROKEE COUNTY
34
CHOWAN COUNTY
54
DUPLIN COUNTY
34
EDGECOMBE COUNTY
34
FRANKLIN COUNTY
34
GATES COUNTY
54
GRAHAM COUNTY
54
GRANVILLE COUNTY
54
GREENE COUNTY
54
HALIFAX COUNTY
34
HAYWOOD COUNTY
34
HERTFORO COUNTY
34
HOKE COUNTY
34
JCHNSTON COUNTY
34
JCNES COUNTY
54
MARTIN COUNTY
34
MITCHELL COUNTY
34
MCNTGOMERY COUNTY
34
NORTHAMPTON COUNTY
34
PAMLICO COUNTY
34
PENDER COUNTY
34
PERQUIMANS COUNTY
34
PERSON COUNTY
34
RICHMOND COUNTY
34
ROBESON COUNTY
34
RUTHERFORD COUNTY
34
STANLY COUNTY
34
TYRRELL COUNTY
34
VANCE COUNTY
34
WARREN COUNTY
34
BURLINGTON CITY
]l
ELON COLLEGE TOWN
34
GRAHAM CITY
3^
JEFFERSON TOWN
34
LANSING TOWN
II
BANNER ELK TOWN
34
CROSSNORL
TOWN
TREASURY
05/2 3/78 AT 31:25
U.S. DEPARTMENT OF THE
PAGE179.
TREASURY
DISTRESSED AREA ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE TITLE
54 ELK PARK TOWN
34
NEWLAND TOWN
34
KELFORD TOWN
34
WCODVILLE TOWN
34
BLADENBORO TOWN
34
WHITE LAKE TOWN
34
EAST ARCADIA TOWN
34
GLEN ALPINE TOWN
34
CONCORD CITY
34
GRANITE FALLS TOWN
34
MILTON TOWN
34
BROOKFORD TOWN
34
ANDREWS TOWN
34
MURPHY TOWN
34
EDENTON TOWN
34
LATTIMORE TOWN
34
BOLTON TOWN
34
CHADBOURN TOWN
34
FAIR BLUFF TOWN
34
TABOR CITY TOWN
34
FALCON TOWN
34
LEXINGTON CITY
34
THOMASVILLE CITY
34
CALYPSO TOWN
34 FAISON TOWN
34
MAGNOLIA TOWN
34
ROSE HILL TOWN
34
TEACHEY TOWN
34
WALLACE TCWN
34
WARSAW TOWN
34
GREENEVERS TOWN
34
PINETCPS TOWN
34
LEGGETT TOWN
34
BUNN TOWN
34 FRANKLINTON TOWN
54
LOUISBURG TOWN
54
CENTERVILLE TOWN
54
CREEDMOOR CITY
54
OXFORD CITY
54
STEM TOWN
54
STOVALL TOWN
54
HOOKERTON TOWN
54
SNOW HILL TOWN
54
WALSTONBURG TOWN
34
ENFIELD TOWN
34
HALIFAX TOWN
TEST
05,23/
" •J.'.JIJr.RiNO.i or n c rmsuir
OISTRESSEO AREA ELIGIBILITY TE»ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
34 HCBGOOD TOWN
54
RCANOKE RAPIDS CITY
34
SCOTLAND NECK TOWN
34
WELDON TOWN
34
LITTLETON TOWN
34
AHOSKIE TOWN
34
WINTON TOWN
34
CCFIELD TOWN
34
CCMO TOWN
34
HARMONY TOWN
34
BENSON TOWN
34
KENLY TOWN
34
SELMA TOWN
34
MAYSVILLE TOWN
34
LINCOLNTON TOWN
34
HASSELL TOWN
34
JAMESVILLE TOWN
34
OAK CITY TOWM
34
PARMELE TCWN
34
ROBERSCNVILLE TOWN
34
WILLIAMSTON TOWN
34
BEARGRA5S TOWN
34
MOUNT GILEAC TOWN
34
STAR T W N
34
CCNWAY TOWN
34 GARYSBURG TOWN
34
GASTON TOWN
34
LASKER TOWN
34
RICH SQUARE TOWN
34
SEABOARO TOWN
34
SEVERN TOWN
34
WOODLAND TOWN
34
RICHLANDS TOWN
34
SWANSBORO TOWN
34
BAYBORO TOWN
34
ORIENTAL TOWN
34
VANDEMERE TOWN
34
ALLIANCE TOWN
34
ARAPAHOE TOWN
34
MESIC TOWN
34
MINNESOTT 3EACH TOWN
34
STONEWALL TOWN
34
ELIZABETH CITY
34
ATKINSON TOWN
34
WATHA TOWN
34
TOP SAIL BEACH TOWN
P
""9°
05/2 3/78 AT 31:25
U.S. DEPARTMENT OF THE
DISTRESSED AREA ELIGIBILITY FEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
34 RANDLEMAN TOWN
54
SEAGROVE TOWN
54
STALEY TOWN
34
ELLERBE TOWN
54
HAMLET CITY
54
ROCKINGHAM TOWN
54
HOFFMAN TOWN
54
NORMAN TOWN
54
FAIRMONT TOWN
54
LUMBERTCN CITY
34
ORRUM TOWN
34
PARKTON TOWN
34
PEMBROKE TOWN
34
PROCTCRVILLE TOWN
34
RED SPRINGS TOWN
34
ROWLAND TOWN
34
ST PAULS TOWN
34
MCOONALD TOWN
34
RAYNHAM TOWN
34
MAYODAN TOWN
34
EDEN CITY
34
CLEVELAND TOWN
34
EAST SPENCER TOWN
54
FAITH TOWN
54
FOREST CITY TOWN
54
SPINDALE TOWN
54
EAST LAURINBURG TOWN
54
GIBSON TOWN
54
LAURINBURG CITY
54
WAGRAM TOWN
54
AL8EMARLE CITY
54
NORWOOD TOWN
54
COLUMBIA TOWN
34
HENDERSCN CITY
34
MIDDLEeURG TOWN
34
WARRENTON TOWN
34
GCLDSBORO CITY
34
BURNSVILLE TOWN
STATE = 34: 17b RECORDS
PAGE131
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE132
OF THE
TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE
STATE
35
35
35
35
35
35
35
35
35
35
35
55
55
55
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
55
55
55
55
55
55
55
55
TITLE
KIDDER COUNTY
MCHENRY COUNTY
WING CITY
OAWSON VILLAGE
PETTI80NE VILLAGE
ROBINSON CITY
STEELE CITY
TAPPEN CITY
TUTTLE VILLAGE
ANAMOOSE CITY
BALFOUR CITY
BERGEN VILLAGE
BERWICK CITY
OEERING VILLAGE
DRAKE CITY
GRANVILLE CITY
KARLSRUHE CITY
KIEF VILLAGE
UPHAM CITY
VELVA CITY
CLEAR LAKE TOWNSHIP
CROFTE TOWNSHIP
ORISCOLL TOWNSHIP
ECKLUND TOWNSHIP
ESTHERVILLE TOWNSHIP
FLORENCE LAKE TWP
GLENVIEW TOWNSHIP
HARRIETT TOWNSHIP
HAZEL GROVE TOWNSHIP
LEIN TOWNSHIP
MORTON TOWNSHIP
SIBLEY BUTTE TOWNSHIP
STEIBER TOWNSHIP
SCHRUNK TOWNSHIP
TAFT TOWNSHIP
WILSON TOWNSHIP
HARDING TOWNSHIP
MCCULLEY TOWNSHIP
LARK TOWNSHIP
ALLEN TOWNSHIP
ATWOOO TOWNSHIP
BAKER TOWNSHIP
BUCKEYE TOWNSHIP
BUNKER TOWNSHIP
CHESTINA TOWNSHIP
CLEAR LAKE TOWNSHIP
GOVERNMENTS)
05/2 5/78 AT 3 1 : 2 5
U.S. DEPARTMENT
PA5E183
OF THE
TREASURY
OISTRESSEO AREA ELIGIBILITY TE*ST
(ELIGIBLE
STATE
55
55
35
35
35
35
35
35
35
35
35
35
35
55
55
55
55
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
55
GOVERNMENTS)
TITLE
CROWN HILL T O W N S H I P
C R Y S T A L SPRI NGS TOWNSHIP
E X C E L S I O R TO WNSHIP
F R E T T I M TOWN SHIP
GRAF TOWNSHI P
H A Y N E S TOWNS HIP
LAKE WILLIAM S T O W N S H I P
MANNING TOWN SHIP
PEACE TOWNSH IP
PETERSVILLE TOWNSHIP
PETTI80NE TO WNSHIP
REXINE TWP
SI3LEY TOWNS HIP
STEWART TOWN SHIP
TANNER TOWNS HIP
TUTTLE TOWNS HIP
VALLEY TOWNS HIP
WEISER TOWNS HIP
W E S T F O R D TOW NSHIP
W I L L I A M S TOW NSHIP
QUINBY TOWNS HIP
MERKEL TOWNS HIP
NORTHWEST TO WNSHIP
ANAMOOSE TOW NSHIP
BALFOUR TOWN SHIP
3ANTRY TOWNS HIP
BERWICK TOWN SHIP
3J0RNS0N TOW NSHI P
BROWN TOWNSH IP
COTTONWOOD L AKE TWP
DEEP RIVER T O W N S H I P
D E E R I N G TOWN SHIP
EGG CREEK TO WNSHIP
FALSEN TOWNS HIP
G I L M O R E TOWN SHIP
HENDRICKSCN TOWNSHIP
KARLSRUHE TO WNSHIP
KOTTKE VALLE Y T O W N S H I P
LAKE GEORGE T O W N S H I P
LAKE HESTER T O W N S H I P
LAND TOWNSHI P
L A Y T C N TOWNS HIP
LE3AN0N TOWN SHIP
LITTLE DEEP T O W N S H I P
MOUSE RIVER T O W N S H I P
NEWPORT TOWN SHIP
05/23/78
AT 3 1 : 2 5
U.S. DEPARTMENT
OF THE
DISTRESSED AREA ELIGIBILITY TEtST
(ELIGIBLE GOVERNMENTS)
STATE
35
35
35
35
35
55
55
55
55
55
55
TITLE
NORMAL T O W N S H I P
ODIN T O W N S H I P
PRATT TOWNSHIP
RIGA TOWNSHIP
ROUND LAKE T O W N S H I P
SALINE T O W N S H I P
SCHILLER T O W N S H I P
VELVA TOWNSHIP
VILLARD T O W N S H I P
FAIRVIEW T O W N S H I P
SLOPE CENTER TWP
S T A T E = 35:
103
„
TREASURY
t
RECORDS
PAGE134
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE185
OF THE
DISTRESSED AREA ELIGIBILITY TE'ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
Sb ADAMS COUNTY
5b
ALLEN COUNTY
5b
ASHLAND COUNTY
5b
ASHTABULA COUNTY
5b
ATHENS COUNTY
5b
BELMONT COUNTY
5b
BUTLER COUNTY
3b
CLARK COUNTY
3b
COLUMBIANA COUNTY
3b
COSHOCTON COUNTY
Sb
CRAWFORD COUNTY
5b
CUYAHOGA COUNTY
5b
DEFIANCE COUNTY
3b
ERIE COUNTY
Sb
FAYETTE COUNTY
5b
FULTON COUNTY
3b
GREENE COUNTY
3b
GUERNSEY COUNTY
3b
HAMILTON COUNTY
3b
HARDIN COUNTY
3b
HOCKING COUNTY
3b
HURON COUNTY
Sb
JACKSON COUNTY
5b
KNOX COUNTY
5b
LICKING COUNTY
5b
LUCAS COUNTY
5b
MAHONING COUNTY
3b
MARION COUNTY
3b
MIAMI COUNTY
Sb
MONROE COUNTY
5b
MONTGOMERY COUNTY
5b
MUSKINGUM COUNTY
5b
NOBLE COUNTY
5b
OTTAWA COUNTY
5b
PAULDING COUNTY
5b
PCRTAGE COUNTY
5b
PREBLE COUNTY
5b
PUTNAM COUNTY
5b
RICHLAND COUNTY
5b
RCSS COUNTY
5b
SANDUSKY COUNTY
5b
SCIOTO COUNTY
3b
SENECA COUNTY
3b
STARK COUNTY
3b
SUMMIT COUNTY
3b
TRUMBULL COUNTY
TREASURY
0 5 / 2 5 / f 8 AT 3 1 : 2 5
U.S. DEPARTMENT
PAGEIBb
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
Sb TUSCARAWAS COUNT Y
Sb
VAN MERT COUNTY
Sb
WARREN COUNTY
ib
WAYNE COUNTY
Sb
W I L L I A M S COUNTY
Sb
CHERKY FORK VILLAGE
Sb
W A N C H E S U R VILLAGE
Sb
P E E B L E S VILLAGE
Sb
RC1E VILLAGE
3b
SEAMAN VILLAGE
5b
NEST UNION VILLAGE
5b
WINCHESTER VILLAGE
5b
BEAVERDAM V I L L A G E
Jb
B L U F F T U N VILLAGE
3b
C A I R O VILLAGE
5b
H A R R O O VILLAGE
3b
LAFAYETTE VILLAGE
ib
LIMA LITY
3b
SPENCERVIL.E' VILLAGE
3b
FCRT SHAWNEE VILLAGE
3b
ASHLAND CITY
3b
J E R C M E S V I L L E VILLAGE
36
MIFFLIN VILLAGE
3b
P E R R Y S V I . L E VILLAGE
36
SAVANNAH VILLAGE
36
ASHTABULA CITY
3o
CCNNEAUT CITY
36
JEFFERSON VILLAGE
36
RCCK CREEK VILLAGE
36
ALBANY VILLAGE
36
AMESVILLE VlLLAoE
36
A T H E N S CITY
36
BUCHTEL VILLAGE
3
6
3b
CHAUNCEY VILLAGE
3b
CCOLVILLE VILLAGE
3b
G L O U S T E R VILLAGE
Sb
JACKSONVILLE
ULAGE
Sb
NELSONVILLE CITY
Sb
TRIMBLE TILLAGE
56
TNKSTENR°VILL cf
5T
Sb CITY
MARYS
Sb
Sb
"BARNESVILLE
* l £ f, L
VILLAGE
Sb
Sb
TREASURY
0 5 / 2 5 / 7 8 AT 3 1 : 2 5
U.S. DEPARTMENT
DISTRESSED
AREA
(ELIGIBLE
STATE
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
3b
3b
3b
Sb
5b
5b
5b
5b
5b
5b
5b
3b
3b
3b
lb
5b
5b
5b
5b
5b
3b
3b
3b
lb
5b
5b
3b
3b
3b
PAGE187
OF
THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TITLE
BELLAIRE CITY
BELMONT VILLAGE
BRIDGEPORT VILLAGE
BROOKSIOE VILLAGE
FLUSHING VILLAGE
HOLLOWAY VILLAGE
MARTINS FERRY CITY
POWHATAN POINT VILLAGE
SHADYSIDE CITY
FAYETTEVILLE VILLAGE
MOUNT ORAB V I L L A G E
RIPLEY V I L L A G E
RUSSELLVILLE VILLAGE
HAMILTON CITY
JACKSONBURG VILLAGE
MIDDLETOWN CITY
MILLVILLE VILLAGE
NEW MIAMI V I L L A G E
OXFORD VILLAGE
S E V E N MILE V I L L A G E
SOMERVILLE VILLAGE
T R E N T O N CITY
DELLROY VILLAGE
LEESVILLE VILLAGE
SHERROUSVILLE VILLAGE
CHRISTIANSiURG VILLAGE
WCODSTOCK VILLAGE
CATAW8A VILLAGE
DCNNELSVILLE VILLAGE
NORTH H A M P T O N V I L L A G E
S P R I N G F I E L D CITY
T R E M O N T CITY V I L L A G E
COLUMBIANA VILLAGE
EAST L I V E R P O O L C I T Y
EAST P A L E S T I N E C I T Y
L E E T O N IA V I L L A G E
LISBON VILLAGE
NEW W A T E R F O R D V I L L A G E
ROGERS VILLAGE
SALINEVILLE VILLAGE
SUMMITVILLE VILLAGE
WELLSVILLE CITY
NELLIE VILLAGE
B U C Y R U S CITY
CHATFIELD VILLAGE
C R E S T L I N E CITY
TEST
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE TREASURY
DISTRESSED AREA ELIGIBILITY FE'ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
3b GALION CITY
Sb NEW WASHINGTON VILLAGE
5b TIRO VILLAGE
5b BEDFORD CITY
5b BEREA CITY
3b BROOK PARK CITY
3b CLEVELAND CITY
5b CUYAHOGA HGHTS VILLAGE
5b EAST CLEVELAND CITY
5b GARFIELD HGHTS CITY
5b LINNDALE VILLAGE
5b MAPLE HGHTS CITY
5b NEWBURGH HEIGHTS VILLAGE
5b SHAKER HGHTS CITY
5b SCUTH EUCLID CITY
5b VALLEY VIEW VILLAGE
5b WARRENSVILLE HGTS CITY
5b DEFIANCE CITY
3b HICKSVILLE VILLAGE
3b NEY VILLAGE
3b SHERWOOD VILLAGE
Sb KELLEYS ISLAND VILLAGE
5b SANDUSKY CITY
5b MILLEOGEVILLE VILLAGE
5b OCTA VILLAGE
3b WASHINGTON CITY
Sb ARCH80LD VILLAGE
5b DELTA VILLAGE
3b FAYETTE VILLAGE
3b LYONS VILLAGE
Sb METAMORA VILLAGE
3b SWANTCN VILLAGE
Sb WAUSECN VILLAGE
5b BURTON VILLAGE
Sb 8ELLBR00K CITY
Sb 6CWERSVILLE VILLAGE
lb CEDARVILLE VILLAGE
Sb CLIFTON VILLAGE
Sb SPRING VALLEY VILLAGE
3b
YELLOW SPRINGS VILLAGE
Sb BYESVILLE VILLAGE
5b CAMBRIOGE CITY
5b CUMBERLAND VILLAGE
lb FAIRVIEW VILLAGE
5b KIM80LT0N VILLAGE
5b LORE CITY VILLAGE
PAGE188
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
D I S T R E S S E D AREA
PAGE189
OF THE
ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE TITLE
3b PLEASANT CITY VILLAGE
Sb
QUAKER CITY VILLAGE
5b
SALESVILLE V I L L A G E
5b
SENECAVILLE VILLAGE
5b
OLD W A S H I N G T O N V I L L A G E
5b
ARLINGTON H G T S V I L L A G E
5b
C H E V I O T CITY
5b
CINCINNATI CITY
Sb
DEER PARK CITY
3b
FAIRFAX V I L L A G E
3b
GOLF MANOR V I L L A G E
3b
GREENHILLS CITY
3b
LCCKLAND C I T Y
3b
MADEIRA CITY
Sb
MOUNT HEALTHY CITY
5b
NORTH COLLEGE HILL CITY
5b
NCRWOCD CITY
5b
REAOING CITY
5b
ST BERNARD C I T Y
5b
SILVERTON CI TY
STATE = 5b: 204 RECORDS
TREASURY
TEST
05/23/78
"U'.TEPARTMENT OF THE TREASURY
OlSTRESSEO AREA ELIGIBILITY TElST
IELIGIBLE GOVERNMENTS)
STATE
3b
TITLE
TERRACE PARK VILLAGE
STATE = 3b:
1 RECORDS
0 5 / 2 3/78 AT 3 1 : 2 5
U.S. DEPARTMENT
DISTRESSED
AREA
(ELIGIBLE
STATE
3b
3b
Sb
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
3b
3b
Sb
5b
5b
3b
3b
3b
Sb
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
Sb
5b
5b
5b
5b
5b
5b
5b
5b
PAGE191
OF THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TITLE
W O O C L A W N V I L L A GE
SPRINGDALE CIT Y
BENTON RIDGE V I L L A G E
JENERA V I L L A G E
M O U N T B L A N C H A R D VILLAGE
MCUNT CORY VIL L A G E
VANLUE VILLAGE
ALGER V I L L A G E
DUNKIRK VILLAG
FOREST VILLAGE
K E N T O N CITY
M C G U F F E Y V I L L A GE
P A T T E R S O N VILL AGE
DESHLER VILLAG E
HOLGATE VILLAG E
MCCLURE VILLAG E
NAPOLEON CITY
NEW BAVARIA VI LLAGE
L A U R E L V I L L E VI L L A G E
LCGAN CITY
MURRAY CITY VI LLAGE
G R E E N W I C H VILL AGE
M C N R O E V I L L E VI L L A G E
NEW L O N D O N VIL LAGE
NCRTH FAIRFIEL D VILLAGE
NORWALK CITY
W I L L A R U CITY
CCALTCN VILLAG
J A C K S O N CITY
OAK H I L L V I L L A GE
WELLSTON CITY
A M S T E R D A M VILL AGE
BLOOMINGDALE V ILLAGE
B R I L L I A N T VILL AGE
D I L L O N V A L E VIL LAGE
I R O N D A L E V I L L A GE
NEW A L E X A N D R I A V I L L A G E
S T R A T T O N VILLA GE
GANN V I L L A G E
C E N T E R B U R G V I L LAGE
D A N V I L L E V I L L A GE
FFEDERICKTOWN VILLAGE
GAM8IER VILLAG E
M A R T I N S B U R G VI L L A G E
MOUNT VERNON C ITY
G R A N D RIVER VI L L A G E
TE'ST
0 5 / 2 5 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
D I S T R E S S E D AREA
(ELIGIBLE GOVERNMENTS)
STATE TITLE
5b NCRTH PERRY VILLAGE
5b
WICKLIFFE CITY
5b
CHESAPEAKE VILLAGE
Sb
COAL GROVE V I L L A G E
5b
IRONTON CITY
5b
KIRKERSVILLE VILLAGE
5b
NEWARK CITY
5b
ST L O U I S V I L L E V I L L A G E
5b
UTICA VILLAGE
5b
8ERKEY VILLAGE
3b
TCLEDC CITY
3b
MIDWAY VILLAGE
3b
SCUTH SOLON VILLAGE
Sb
BELOIT VILLAGE
STATE = 3b: bD RECORDS
OF THE
TREASURY
ELIGIBILITY
TEST
0 5 / 2 3 / 7 8 AT 31:25
U.S. DEPARTMENT
PAGE193
OF THE
DISTRESSED AREA ELIGIBILITY TEfST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
3b CAMPBELL CITY
STATE = 5b: 1 RECORDS
TREASURY
PAGE194
05/23/78 «
»/ypARTHENT
OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
3b CRAIG BEACH VILLAGE
3b LOWELLVILLE VILLAGE
3b POLAND VILLAGE
3b SEBRING VILLAGE
3b STRUTHERS CITY
5b YCUNGSTOWN CITY
5b GREEN CAMP VILLAGE
5b MARION CITY
5b MORRAL VILLAGE
5b CASSTCWN VILLAGE
5b COVINGTON VILLAGE
5b LUDLOW FALLS VILLAGE
5b PIQUA CITY
5b POTSDAM VILLAGE
5b ANTIOCH VILLAGE
3b BEALLSVILLE VILLAGE
Sb CLARINGTON VILLAGE
5b GRAYSVILLE VILLAGE
5b JERUSALEM VILLAGE
5b LEWISVILLE VILLAGE
5b MILTONSBURG VILLAGE
5b STAFFORD VILLAGE
3b WCOOSFIELD VILLAGE
3b CLAYTON VILLAGE
Sb DAYTON CITY
5b FARMERSVILLE VILLAGE
3b KETTERING CITY
5b MIAMISBURG CITY
5b RIVERSIDE VILLAGE
5b VANDALIA CITY
5b MORAINE CITY
5b CHESTERVILLE VILLAGE
3b EDISON VILLAGE
3b SPARTA VILLAGE
Sb ADAMSVILLE VILLAGE
5b FRAZEYSBURG VILLAGE
3b NEW CONCORD VILLAGE
3b NORWICH VILLAGE
3b PHILO VILLAGE
3b FULTONHAM VILLAGE
3b ZANESVILLE CITY
Sb BATESVILLE VILLAGE
5b BELLE VALLEY VILLAGE
5b CALDWELL VILLAGE
5b OEXTER CITY VILLAGE
5b SARAHSVILLE VILLAGE
0 5 / 2 5 / 7 8 AT 3 1 : 2 5
U.S. DEPARTMENT
D I S T R E S S E D AREA
PAGE195
OF THE
ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE
5b
5b
3b
Sb
3b
3b
Sb
5b
5b
5b
5b
5b
5b
3b
3b
3b
3b
Sb
5b
5b
5b
5b
5b
5b
5b
5b
3b
3b
3b
Sb
5b
5b
5b
5b
5b
5b
5b
3b
5b
5b
3b
3b
3b
3b
Sb
5b
TREASURY
TITLE
SUMMERFIELD V I L L A G E
CLAY CENTER V I L L A G E
ELMORE VILLA GE
GENOA VILLAG E
MARBLEHEAD V ILLAGE
PORT CLINTON C I T Y
PUT IN BAY V ILLAGE
ROCKY RIDGE VILLAGE
ANTWERP VILL AGE
BROUGHTON VI LLAGE
H A V I L A N O VIL LAGE
MELROSE VILL AGE
OAKWOOD VILL AGE
PAULDING VIL LAGE
PAYNE VILLAG E
CORNING VILL AGE
HEMLOCK VILL AGE
SHAWNEE VILL AGE
BEAVER VILLA GE
BRADY LA<£ V ILLAGE
HIRAM VILLAG E
KENT CITY
MANTUA VILLA GE
RAVENNA CITY
WINDHAM VILL AGE
S T R E E T S B O R H CITY
EATON CITY
LEwISBURG VI LLAGE
NEW PARIS VI L L A G E
WEST ELKTCN VILLAGE
WEST MANCHES TER VILLAGE
BELMORE VILL AGE
C L O V E R D A L E V ILLAGE
C O L U M B U S GRO VE V I L L A G E
DUPONT VILLA GE
GLANDORF VIL LAGE
L E I P S I C VILL AGE
MILLER CITY V I L L A G E
OTTOVILLE VI LLACE
WEST LEIPSIC V I L L A G E
BELLVILLE VI L L A G E
BUTLER VILLA GE
L U C A S VILLAG E
MANSFIELD CI TY
SHILOH VILLA GE
ONTARIO VILL AGE
TEST
05/2 3/78 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
3b
3b
5b
5b
5b
5b
5b
3b
Sb
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
3b
3b
3b
lb
5b
5b
5b
3b
3b
3b
lb
3b
3b
TITLE
AOELPHI VILLAGE
BAINBRIDGE VILLAGE
C H I L L I C O T H E CITY
CLARKSBURG V I L L A G E
FRANKFORT V I L L A G E
KINGSTON VILLAGE
SCUTH SALEM V I L L A G E
BURGOON V I L L A G E
CLYDE VILLAGE
F R E M O N T CITY
GIBSONBURG V I L L A G E
HELENA VILLAGE
NEW BOSTON V I L L A G E
OTWAY VILLAGE
PORTSMOUTH C I T Y
RARDEN VILLAGE
SOUTH WEBSTER V I L L A G E
ATTICA VILLAGE
NEW RIEGEL V I L L A G E
TIFFIN CITY
LCCKINGTON C O R P O R A T I O N
PORT J E F F E R S O N V I L L A G E
SIDNEY CITY
RUSSIA VILLAGE
ALLIANCE CITY
CANTON CITY
LIMAVILLE V I L L A G E
MASSILLON CITY
MEYERS LAKE VILLAGE
WAYNESBURG V I L L A G E
AKRON CITY
8ARBERT0N CITY
LAKEMORE V I L L A G E
NORTHFIELO V I L L A G E
MACEDCNIA CITY
RICHFIELD V I L L A G E
GIRARD CITY
NEWTON F A L L S C I T Y
STATE = 5b: 150 RECORDS
PAGE19G
OF THE
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE
PAGE197
TREASURY
DISTRESSED AREA ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE
3b
TITLE
WARREN CITY
STATE = 3b:
1 RECORDS
TEST
05/2 3/78 AT
3l:25
U.S. DEPARTMENT
OF THE
DISTRESSED AREA ELIGIBILITY TEST
ELIGIBLE GOVERNMENTS)
STATE
3b
3b
3b
5b
5b
5b
5b
3b
5b
5b
3b
3b
3b
3b
lb
lb
5b
5b
3b
lb
lb
lb
lb
lb
Sb
Sb
Sb
Sb
Sb
Sb
Sb
Sb
Sb
Sb
Sb
Sb
Sb
Sb
Sb
Sb
Sb
Sb
Sb
Sb
Sb
lb
TITLE
YANKEE LAKE VILLAGE
BALTIC VILLAGE
8ARNHILL VILLAGE
OENNISON VILLAGE
DOVER CITY
GNADENHUTTEN VILLAGE
MIOVALE VILLAGE
MINERAL CITY VILLAGE
NEWCOMERSTOWN VILLAGE
NEW PHILADELPHIA CITY
PORT WASHINGTON VILLAGE
RCSWELL VILLAGE
STONE CREEK VILLAGE
STRASBURG VILLAGE
SUGARCREEK VILLAGE
TUSCARAWAS VILLAGE
UHRICHSVILLE CITY
ZCAR VILLAGE
MILFORD CENTER VILLAGE
ELGIN VILLAGE
MIODLEPOINT VILLAGE
OHIO CITY VILLAGE
VAN WERT CITY
VENEDOCIA VILLAGE
WILLSHIRE VILLAGE
WREN VILLAGE
HAMOEN V I L L A J G E
WILKESVILLE VILLAGE
ZALESKI VILLAGE
BUTLERVILLE VILLAGE
HARVEYSBURG VILLAGE
MAINEVILLE VILLAGE
PLEASANT PLAIN VILLAGE
SOUTH LE3AN0N VILLAGE
WAYNESVILLE VILLAGE
GELPRE CITY
LOWELL VILLAGE
LOWER SALEM VILLAGE
MARIETTA CITY
BURBANK VILLAGE
CRESTON VILLAGE
FREDEFICKS3URG VILLAGE
MOUNT EATON VILLAGE
ORRVILLE CITY
WEST SALEM VILLAGE
ALVORDTON VILLAGE
TREASURY
PAGE198
05/25/78
AT 3 1 : 2 5
U.S. DEPARTMENT
PAGE199
OF
DISTRESSED AREA ELIGIBILITY TE'ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
5b BLAKESLEE VILLAGE
5b
8RYAN CITY
5b
EDGERTON VILLAGE
5b
STRYKER V I L L A G E
5b
CUSTAR VILLAGE
5b
HCYTVILLE VILLAGE
3b
MILTON CENTER VILLAGE
3b
NORTH B A L T I M O R E V I L L A G E
3b
PORTAGE VILLAGE
3b
TCNTOGANY V I L L A G E
lb
WEST M I L L G R O V E V I L L A G E
5b
BRATTON T O W N S H I P
5b
BRUSH CREEK T O W N S H I P
5b
FRANKLIN TOWNSHIP
3b
GREEN TCWNSHIP
lb
JEFFERSON TOWNSHIP
5b
LIBERTY TOWNSHIP
5b
MANCHESTER T O W N S H I P
5b
MEIGS TCWNSHIP
5b
MONROE T O W N S H I P
5b
OLIVER TOWNSHIP
5b
SCOTT TOWNSHIP
3b
SPRIGG T O W N S H I P
3b
TIFFIN TOWNSHIP
lb
WAYNE TOWNSHIP
5b
WINCHESTER TOWNSHIP
5b
APANDA T O W N S H I P
5b
AUGLAIZE TOWNSHIP
5b
3ATH T O W N S H I P
5b
JACKSON TOWNSHIP
5b
MONROE T O W N S H I P
5b
PERRY TOWNSHIP
3b
RICHLAND TOWNSHIP
5b
SPENCER TOWNSHIP
5b
SUGAR CREEK T O W N S H I P
5b
C L E A R CREEK T O W N S H I P
5b
VERMILLION TWP
3b
ASHTABULA T O W N S H I P
lb
AUSTINBURG TOWNSHIP
5b
C H E R R Y VALLEY T O W N S H I P
5b
CCLEBROOK TOWNSHIP
5b
DENMARK T O W N S H I P
5b
JEFFERSON TOWNSHIP
5b
LENOX T O W N S H I P
3b
MONROE T O W N S H I P
3b
MORGAN TOWNSHI**
THE
TREASURY
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
PAGE200
OF
DISTRESSED AREA ELIGIBILITY TE'ST
(ELIGIBLE GOVERNMENTS)
STATE
lb
5b
5b
5b
5b
5b
5b
5b
3b
lb
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
5b
lb
TITLE
PLYMOUTH T O W N S H I P
SAYBROOK T O W N S H I P
SHEFFIELD T O W N S H I P
WINDSOR T C W N S H I P
ALEXANDER TOWNSH IP
AMES TOWNSHIP
ATHENS TOWNSHIP
BERN T O W N S H I P
CANAAN TOWNSHIP
CARTHAGE T O W N S H I P
DOVER TOWNSHIP
LEE TOWNSHIP
LODI TOWNSHIP
ROME TOWNSHIP
TRIM3LE TOWNSHIP
TROY TOWNSHIP
WATERLOO T O W N S H I P
YCRK TOWNSHIP
GOSHEN TOWNSHIP
LOGAN TOWNSHIP
NOBLE TOWNSHIP
ST MARYS T O W N S H I P
SALEM TOWNSHIP
CCLERAIN T O W N S H I P
FLUSHING TOWNSHIP
GOSHEN TOWNSHI^
KIRKWOOD TOWNSHIP
MEAD TOWNSHIP
PEASE TOWNSHIP
PULTNEY TOWNSHIP
SPITH TOWNSHIP
SOMERSET T O W N S H I P
UNION TOWNSHIP
WARREN TOWNSHIP
WASHINGTON T O W N S H I P
WHEELING TOWNSHIP
YORK TOWNSHIP
PIKE TOWNSHIP
PLEASANT T O W N S H I P
UNION TOWNSHIP
WASHINGTON T O W N S H I P
H A N O V E R TOWNSHIP
LEMON T O W N S H I P
LIBERTY TOWNSHIP
MADISON T O W N S H I P
MILFORO T O W N S H I P
THE
TREASURY
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
3b MORGAN TOWNSHIP
3b
OXFORD T O W N S H I P
3b
REILY TOWNSHIP
3b
RCSS T O W N S H I P
3b
ST C L A I R T O W N S H I P
3b
UNION TOWNSHIP
lb
WAYNE TOWNSHIP
5b
EAST T O W N S H I P
5b
FOX TOWNSHIP
5b
HARRISON T O W N S H I P
5b
LEE TOWNSHIP
5b
MONROE TOWNSHIP
5b
ORANGE TOWNSHIP
5b
ROSE T O W N S H I P
5b
UNION TOWNSHIP
3b
ADAMS TOWNSHIP
3b
CCNCORD TOWNSHIP
3b
JACKSON T O W N S H I P
3b
MAD RIVER T O W N S H I P
lb
SALEM TOWNSHIP
5b
UNION TOWNSHIP
5b
BETHEL TOWNSHI 1 *
5b
MAD RIVER T O W N S H I P
5b
PIKE T O W N S H I P
5b
S P R I N G F I E L D TOWNSHIP
5b
J A C K S O N TOWNSHIP
5b
MONROE TOWNSHIP
5b
WAYNE TOWNSHIP
5b
BUTLER T O W N S H I P
5b
CENTEP T O W N S H I P
5b
ELKRUN TOWNSHIP
5b
FAIRFIELD T O W N S H I P
5b
FRANKLIN TOWNSHIP
5b
HANOVER T O W N S H I P
5b
KNOX T O W N S H I P
3b
LIVERPOOL T O W N S H I P
3b
MADISON T O W N S H I P
3b
MIDDLETON T O W N S H I P
3b
ST CLAIR T O W N S H I P
3b
SALEM T C W N S H I P
3b
UNITY TOWNSHIP
3b
WASHINGTON T O W N S H I P
3b
WAYNE TOWNSHIP
lb
WEST TOWNSHIP
5b
YELLOW CREEK T O W N S H I P
5b
BEOFORD TOWNSHIP
PAGE201
OF THE
TREASURY
0 5 / 2 5 / 7 8 AT 3 1 : 2 5
U.S. DEPARTMENT
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
5b
5b
5b
5b
3b
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
lb
C L A R K TOWNSH IP
N E W C A S T L E TO W N S H I P
PERRY TOWNSH IP
T I V E R T O N TOW N S H I P
TUSCARAWAS T OWNSHIP
VIRGINIA TOW N S H I P
AUBURN TOWNS HIP
B U C Y R U S TOWN SHIP
C H A T F I E L D TO W N S H I P
C R A N B E R R Y TO W N S H I P
D A L L A S TOWNS HIP
H C L M E S TOWNS HIP
J A C K S O N TOWN SHIP
L Y K E N S TOWNS HIP
POLK TOWNSHI P
S A N D U S K Y TOW N S H I P
TEXAS TOWNSH IP
TCO TOWNSHIP
VERNON TOWNS HIP
WHETSTONE TO WNSHIP
D E F I A N C E TOW N S H I P
DELAWARE TOW N S H I P
HICKSVILLE T OWNSHIP
MARK TOWNSHI P
BERLIN TOWNS HIP
OXFORD TOWNS HIP
P E R K I N S TOWN SHIP
C O N C O R D TOWN SHIP
G R E E N TOWNSH IP
JASPER TOWNS HIP
MADISON TCWN SHIP
PAINT TOWNSH IP
PERRY TOWNSH IP
UNION TOWNSH IP
WAYNE TOWNSH IP
AK80Y TOWNSH IP
CHESTERFIELD TOWNSHIP
C L I N T O N TOWN SHIP
OCVER TOWNSH IP
F R A N K L I N TOW N S H I P
F U L T O N TOWNS HIP
GERMAN TOWNS HIP
GCRHAM TOWNS HIP
PIKE TOWNSHI P
ROYALTCN TOW NSHIP
SWAN CREEK T O W N S H I P
OF THE
TREASURY
PAGE202
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. DEPARTMENT
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
3b YORK TOWNSHIP
3b
PARKMAN T O W N S H I P
3b
TROY TOWNSHIP
lb
BATH TOWNSHIP
3b
BEAVER CREEK T O W N S H I P
3b
C A E S A R S CREEK TWP
3b
CEOARVILLE T O W N S H I P
3b
JEFFERSON TOWNSHIP
3b
MIAMI TOWNSHIP
3b
ROSS T O W N S H I P
lb
SPRING VALLEY T O W N S H I P
5b
SUGAR CREEK TOWNSHIP
5b
XENIA TOWNSHIP
5b
CAMBRIDGE T O W N S H I P
3b
CENTER TOWNSHIP
3b
JACKSON T O W N S H I P
3b
JEFFERSON T O W N S H I P
5b
KNOX T O W N S H I P
3b
L I B E R T Y TOWNSHIP
3b
L O N D O N D E R R Y TOWNSHIP
3b
MADISON TOWNSHIP
3b
MILLWOOD T O W N S H I P
5b
MONROE TOWNSHIP
5b
OXFORO TOWNSHIP
3b
RICHLAND T O W N S H I P
3b
SPENCER TOWNSHIP
3b
VALLEY TOWNSHIP
3b
WASHINGTON T O W N S H I P
3b
WESTLAND T O W N S H I P
3b
WHEELING T O W N S H I P
3b
W I L L S TCWNSHIP
lb
COLUMBIA T O W N S H I P
5b
G R E E N TOWNSHIP
5b
WHITEWATER T O W N S H I P
5b
BLANCHARD T O W N S H I P
5b
MADISON T O W N S H I P
5b
BLANCHARD T O W N S H I P
5b
BUCK TOWNSHIP
5b
CESSNA TOWNSHIP
5b
JACKSON T O W N S H I P
3b
MARION TOWNSHIP
3b
WASHINGTON T O W N S H I P
3b
NAPOLEON T O W N S H I P
3b
PLEASANT T O W N S H I P
lb
BENTON TOWNSHIP
5b
F A L L S TOWNSHIP
PAGE203
OF THE
TREASURY
°5'23"8
'S.'SJ'SEHI.THC.I OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
TITLE
5b GOOD HOPE TOWNSHIP
5b
GREEN TOWNSHIP
5b
LAUREL T O W N S H I ^
5b
MARION TOWNSHIP
5b
PERRY TOWNSHIP
5b
SALT CREEK T O W N S H I P
5b
STARR TOWNSHIP
5b
WARD TOWNSHIP
5b
WASHINGTON T O W N S H I P
5b
BRONSON TOWNSHIP
5b
CLARKSFIELD T O W N S H I P
5b
FITCHVILLE TOWNSHIP
5b
GREENFIELD TOWNSHIP
5b
GREENWICH T O W N S H I P
5b
HARTLAND T O W N S H I P
3b
NEW LONDON T O W N S H I P
5b
NORWALK TOWNSHIP
5b
NORWICH T O W N S H I P
5b
PERU TOWNSHIP
5b
RICHMOND T O W N S H I P
5b
RIPLEY TOWNSHIP
5b
SHERMAN TOWNSHIP
5b
TOWNSEND T O W N S H I P
5b
BLOOMFIELD T O W N S H I P
5b
COAL T O W N S H I P
3b
FRANKLIN T O W N S H I P
3b
HAMILTON T O W N S H I P
3b
JACKSCN T O W N S H I P
lb
JEFFERSON T O W N S H I P
3b
LI8ERTY T O W N S H I P
3b
LICK TOWNSHIP
5b
MADISON T O W N S H I P
5b
MILTON TOWNSHIP
5b
SCIOTO T O W N S H I P
5b
WASHINGTON T O W N S H I P
5b
RCSS TOWNSHIP
5b
SALINE TOWNSHIP
5b
BERLIN TOWNSHIP
5b
BROWN TOWNSHIP
5b
BUTLER TOWNSHIP
5b
CLAY TOWNSHIP
5b
C L I N T O N TOWNSHIP
5b
C O L L E G E TOWNSHIP
5b
HARRISON T O W N S H I P
5b
HILLIAR T O W N S H I P
5b
HOWARD TOWNSHIP
""""'
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE205
OF THE
DISTRESSED AREA ELIGIBILITY TE»ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
3b JACKSON TOWNSHIP
3b
JEFFERSON TOWNSHIP
3b
LIBERTY TOWNSHIP
Sb
MIDDLEBURY TOWNSHIP
5b
MILFORD TOWNSHIP
5b
MILLER TOWNSHIP
5b
MONROE TOWNSHIP
5b
MORGAN TOWNSHIP
5b
MORRIS TOWNSHIP
5b
PIKE TOWNSHIP
5b
PLEASANT TOWNSHIP
5b
UNION TOWNSHIP
5b
WAYNE TCWNSHIP
5b
LEROY TOWNSHIP
5b
PAINESVILLE TOWNSHIP
5b
PERRY TOWNSHIP
5b
HAMILTON TOWNSHIP
5b
SYMMES TOWNSHIP
5b
UPPER TOWNSHIP
5b
BOWLING GREEN TOWNSHIP
5b
HARRISON TOWNSHIP
5b
LICKING TOWNSHIP
5b
MCKEAN TOWNSHIP
5b
UNION TOWNSHIP
5b
WASHINGTON TOWNSHIP
5b
HARDING TOWNSHIP
5b
PROVIDENCE TOWNSHIP
5b
RICHFIELD TOWNSHIP
5b
SPENCER TOWNSHIP
5b
DEER CREEK TOWNSHIP
5b
FAIRFIELD TOWNSHIP
5b
MONROE TOWNSHIP
5b
OAK RUN TCWNSHIP
5b
PAINT TOWNSHIP
5b
RANGE TOWNSHIP
5b
SOMERFORD TOWNSHIP
5b
STOKES TOWNSHIP
5b
UNION TOWNSHIP
5b
AUSTINTOWN TOWNSHIP
5b
BEAVER TOWNSHIP
Sb
BERLIN TOWNSHIP
Sb
COITSVILLE TOWNSHIP
3b
ELLSWORTH TOWNSHIP
Sb
GOSHEN TOWNSHIP
5b
GREEN TOWNSHIP
5b
JACKSON TOWNSHIP
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE20G
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
5b MILTON TOWNSHIP
3b
POLAND TOWNSHIP
Sb
SMITH TOWNSHIP
5b
BIG ISLAND TOWNSHIP
5b
BOWLING GREEN TOWNSHIP
5b
GREEN CAMP TOWNSHIP
5b
MARION TOWNSHIP
5b
PLEASANT TOWNSHIP
5b
SALT ROCK TOWNSHIP
5b
LAFAYETTE TOWNSHIP
5b
BETHEL TOWNSHIP
5b
BROWN TCWNSHIP
5b
ELIZABETH TOWNSHIP
5b
NEWBERRY TOWNSHIP
5b
NEwTON TOWNSHIP
5b
SPRING CREEK TOWNSHIP
5b
STAUNTON TOWNSHIP
5b
WASHINGTON TOWNSHIP
5b
ADAMS TOWNSHIP
3b
BENTON TOWNSHIP
3b
BETHEL TOWNSHIP
3b
CENTER TOWNSHIP
3b
FRANKLIN TOWNSHIP
Sb
GREEN TOWNSHIP
5b
JACKSON TOWNSHIP
5b
LEE TOWNSHIP
5b
MALAGA TOWNSHIP
5b
OHIO TOWNSHIP
5b
PERRY TOWNSHIP
5b
SALEM TOWNSHIP
5b
SUMMIT TOWNSHIP
5b
SUNS8URY TOWNSHIP
5b
WASHINGTON TOWNSHIP
5b
WAYNE TOWNSHIP
5b
BUTLER TOWNSHIP
5b
JACKSON TOWNSHIP
5b
JEFFERSON TOWNSHIP
5b
MADISON TOWNSHIP
5b
MAD RIVER TOWNSHIP
5b
MIAMI TOWNSHIP
5b
ADAMS TOWNSHIP
5b
BLUE ROCK TOWNSHIP
5b
BRUSH CREEK TOWNSHIP
5b
CLAY TOWNSHIP
5b
HARRISON TOWNSHIP
5b
HOPEWELL TOWNSHIP
TREASURY
0 5 / 2 5 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
PAGE207
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
5b JACKSON TOWNSHIP
5b
MAOISON T O W N S H I P
5b
M E I G S TOWNSHIP
5b
NEWTON TOWNSHIP
5b
SALEM T O W N S H I P
5b
SALT CREEK T O W N S H I P
5b
SPRINGFIELD TOWNSHIP
5b
UNION TOWNSHIP
5b
WASHINGTON TOWNSHIP
5b
WAYNE TOWNSHIP
3b
BEAVER TOWNSHIP
3b
BROOKFIELD TOWNSHIP
Sb
BUFFALO TOWNSHIP
5b
CENTER TOWNSHIP
5b
ELK TOWNSHIP
5b
ENOCH TOWNSHIP
5b
J A C K S O N TOWNSHIP
5b
JEFFERSON T O W N S H I P
5b
MARION TOWNSHIP
5b
NCBLE TCWNSHIP
5b
OLIVE TOWNSHIP
5b
SENECA TOWNSHIP
5b
SHARON TOWNSHIP
5b
STOCK T O W N S H I P
5b
ALLEN T O W N S H I P
5b
BAY TOWNSHIP
5b
BENTON TOWNSHIP
5b
CARROLL TOWNSHIP
5b
CATAWBA ISLAND T O W N S H I P
5b
CLAY T O K N S H I P
5b
DANBURY TOWNSHIP
5b
ERIE T O W N S H I P
5b
HARRIS TOWNSHIP
5b
PORTAGE T O W N S H I P
5b
PUT IN BAY T O W N S H I P
5b
SALEM T O W N S H I P
5b
BROWN TOWNSHIP
5b
CRANE T O W N S H I P
5b
PAULDING T O W N S H I P
5b
WASHINGTON T O W N S H I P
5b
MONROE TOWNSHIP
5b
JACKSON TOWNSHIP
5b
PEE PEE T O W N S H I P
5b
PERRY TCWNSHIP
5b
SCIOTO T O W N S H I P
5b
ATWATER T O W N S H I P
TREASURY
PAGE208
1
05/23/78 A I j l - . J ^ ^ ^
Qp
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
3b BRIMFIELD TOWNSHIP
5b
CHARLESTOWN T O W N S H I P
5b
DEERFIELD T O W N S H I P
5b
EDINBURG T O W N S H I P
5b
FRANKLIN T O W N S H I P
5b
FREEDOM TOWNSHIP
5b
HIRAM TOWNSHIP
3b
MANTUA TOWNSHIP
3b
NELSON TOWNSHIP
3b
PALMYRA TOWNSHIP
3b
PARIS TOWNSHIP
3b
RANDOLPH T O W N S H I P
5b
RAVENNA T O W N S H I P
5b
ROOTSTOWN T O W N S H I P
5b
SHALERSVILLE< T O W N S H I P
5b
SUFFIELD T O W N S H I P
5b
WINDHAM TOWNSHIP
5b
HARRISON T O W N S H I P
5b
JEFFERSON TOWNSHIP
5b
LANIER TOWNSHIP
5b
TWIN TOWNSHIP
5b
JENNINGS T O W N S H I P
5b
MONTEREY T O W N S H I P
5b
OTTAWA TCWNSHIP
3b
PALMER TOWNSHIP
3b
PERRY TOWNSHIP
3b
PLEASANT T O W N S H I P
5b
VAN BUREN TOWNSHIP
5b
CASS TOWNSHIP
5b
FRANKLIN T O W N S H I P
5b
MAOISON T O W N S H I P
5b
SANDUSKY T O W N S H I P
5b
SHARON TOWNSHIP
5b
SPRINGFIELD T O W N S H I P
5b
BUCKSKIN T O W N S H I P
5b
COLERAIN T O W N S H I P
5b
CCNCORO TOWNSHIP
5b
DEERFIELD T O W N S H I P
5b
FRANKLIN T O W N S H I P
5b
GREEN TOWNSHIP
5b
HARRISON T O W N S H I P
5b
HUNTINGTON T O W N S H I P
3b
JEFFERSON TOWNSHIP
Sb
LIBERTY TOWNSHIP
5b
PAINT TOWNSHIP
5b
PAXTON TOWNSHIP
^
TREASURY
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. DEPARTMENT
PAGE209
OF THE
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
Sb SCIOTO TOWNSHIP
5b
SPRINGFIELD TOWNSHIP
3b
TWIN T O W N S H I P
3b
UNION TCWNSHIP
3b
BALLVILLE T O W N S H I P
Sb
G R E E N CREEK T O W N S H I P
5b
JACKSON TOWNSHIP
3b
MAOISON T O W N S H I P
Sb
RICE TOWNSHIP
5b
RILEY T O W N S H I P
5b
SANDUSKY T O W N S H I P
5b
TCWSEND TOWNSHIP
5b
WASHINGTON T O W N S H I P
5b
YCRK T O W N S H I P
5b
BLOOM TOWNSHIP
5b
BRUSH CREEK T O W N S H I P
5b
CLAY TOWNSHIP
5b
G R E E N TOWNSHIP
5b
HARRISON TOWNSHIP
5b
JEFFERSON T O W N S H I P
lb
MADISON T O W N S H I P
lb
MORGAN T O W N S H I P
5b
NILE TOWNSHIP
5b
PORTER TOWNSHIP
5b
RARDEN T O W N S H I P
5b
RUSH TOWNSHIP
5b
UNION TOWNSHIP
5b
VALLEY TOWNSHIP
5b
VERNON T O W N S H I P
5b
WASHINGTON T O W N S H I P
5b
ADAMS TOWNSHIP
5b
BIG SPRING T O W N S H I P
5b
REED T O W N S H I P
5b
SENECA TOWNSHIP
5b
CLINTCN TOWNSHIP
5b
LCRAMIE T O W N S H I P
5b
PERRY TOWNSHIP
5b
WASHINGTON T O W N S H I P
5b
CANTON TOWNSHIP
5b
LEXINGTON T O W N S H I P
5b
MARLBORO T O W N S H I P
5b
COVENTRY T O W N S H I P
5b
FRANKLIN TOWNSHIP
5b
RICHFIELD T O W N S H I P
5b
SPRINGFIELD TOWNSHIP
5b
BLOOMFIELO T O W N S H I P
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE210
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
5b 8RACEVILLE TOWNSHIP
5b
CHAMPION TOWNSHIP
5b
GREENE TOWNSHIP
5b
HOWLANO TOWNSHIP
3b
MESOPOTAMIA TOWNSHIP
3b
NEWTON TOWNSHIP
3b
WARREN TOWNSHIP
5b
WEATHERSFIELD TOWNSHIP
5b
AUBURN TOWNSHIP
5b
BUCKS TOWNSHIP
5b
CLAY TOWNSHIP
5b
OOVER TOWNSHIP
5b
FAIRFIELD TOWNSHIP
5b
FRANKLIN TOWNSHIP
5b
GCSHEN TOWNSHIP
5b
JEFFERSON TOWNSHIP
5b
MILL TOWNSHIP
5b
OXFORD TOWNSHIP
5b
PERRY TOWNSHIP
5b
RUSH TOWNSHIP
5b
SALEM TOWNSHIP
5b
SANDY TOWNSHIP
5b
SUGAR CREEK TOWNSHIP
3b
UNION TOWNSHIP
3b
WARREN TOWNSHIP
3b
WARWICK TCWNSHIP
3b
WASHINGTON TOWNSHIP
3b
WAYNE TOWNSHIP
lb
HARRISON TOWNSHIP
5b
JACKSON TOWNSHIP
5b
JENNINGS TOWNSHIP
3b
LIBERTY TOWNSHIP
3b
PLEASANT TOWNSHIP
3b
WASHINGTON TOWNSHIP
3b
WILLSHIRE TOWNSHIP
3b
YORK TOWNSHIP
3b
BROWN TCWNSHIP
lb
CLINTON TOWNSHIP
5b
EAGLE TOWNSHIP
5b
MAOISON TOWNSHIP
5b
WILKESVILLE TOWNSHIP
5b
HAMILTON TWP
5b
HARLAN TOWNSHIP
5b
MASSIE TOWNSHIP
5b
TURTLE CREEK TOWNSHIP
3b
UNION TOWNSHIP
TREASURY
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. DEPARTMENT
OISTRESSEO
AREA
(ELIGIBLE GOVERNMENTS)
STATE TITLE
3b ADAMS TOWNSHIP
3b
GRANOVIEW T O W N S H I P
lb
INDEPENDENCE TOWNSHIP
5b
LIBERTY T O W N S H I P
5b
LUOLOW T O W N S H I P
5b
SALEM TOWNSHIP
5b
WATERTOWN T O W N S H I P
5b
CANAAN T O W N S H I P
5b
CLINTON TOWNShIP
5b
CCNGRESS TOWNSHIP
5b
EAST UNION T O W N S H I P
5b
MILTON TOWNSHIP
5b
PAINT TOWNSHIP
5b
SALT CREEK T O W N S H I P
3b
JEFFERSON TOWNSHIP
3b
MILL CREEK T O W N S H I P
lb
NORTHWEST T O W N S H I P
5b
ST JOSEPH T O W N S H I P
5b
SPRINGFIELD TOWNSHIP
5b
SUPERIOR TOWNSHIP
5b
MILTON TOWNSHIP
5b
WEBSTER TOWNSHIP
STATE = 5b: b20 RECORDS
PAGE211
OF THE
TREASURY
ELIGIBILITY
TEIST
05/25/78 AT 31:25
U.S. DEPARTMENT
PAGE212
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
57 ATOKA COUNTY
57
CHOCTAW COUNTY
57
CCAL COUNTY
57
CRAIG COUNTY
57
GREER COUNTY
57
HARMON COUNTY
57
HASKELL COUNTY
57
HUGHES COUNTY
57
JACKSON COUNTY
57
KIOWA CCUNTY
57
LATIMER COUNTY
57
MURRAY COUNTY
57
OKFUSKEE COUNTY
57
OKMULGEE COUNTY
57
OTTAWA COUNTY
17
PITTSBURG COUNTY
57
PUSHMATAHA COUNTY
57
ATOKA CITY
57
CANEY TOWN
57
STRINGTOWN TOWN
57
TUSHKA TOWN
57
ANADARKO CITY
57
BRIDGEPORT CITY
57
CARNEGIE TOWN
57
CEMENT TOWN
57
CYRIL TCWN
57
HEALDTON TOWN
57
WILSON CITY
57
TATUMS TOWN
37
TAHLEQUAH CITY
37
BCSWELL TOWN
17 FCRT TOWSON TOWN
17
HUGO CITY
37
SCPER TOWN
17
CENTRAHOMA CITY
57
CCALGATE CITY
57
LEHIGH CITY
57
PHILLIPS TOWN
57
TUPELC CITY
57
DEVOL CITY
57
BLUEJACKET TOWN
57
ELMORE CITY TOWN
17
MAYSVILLE TOWN
17
WYNNEWOCD CITY
57
GRANITE CITY
37
WILLOW TOWN
TREASURY
05/23/78
AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TE«ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
17 GOULD TOWN
57
B U F F A L O TOWN
37
LAVERNE TOWN
17
MAY TOWN
57
KINTA TOWM
37
M C C U R T A I N TOWN
37
S T I G L E R CITY
37
TAMAHA TOWN
37
CALVIN TOWN
37
D U S T I N TOWN
37
GERTY TOWN
37
LAMAR TOWN
37
STUART TOWN
17
WETUMKA CITY
57
YEAGER TOWN
57
BLAIR TOWN
57
DUKE TOWN
57
ELMER TOWN
57
O L U S T E E TCWN
57
RYAN CITY
57
TERRAL TOWN
57
K I L D A R E TOWN
57
NARDIN TOWN
57
NEWKIRK CITY
57
GCTEBO TOWN
57
HCBART CITY
57
LONE WCLF TOWN
57
MOUNTAINVIEW
57
ROOSEVELT TOwN
57
SNYDER TOWN
57
RED OAK TCWN
37
G A R V I N TOWN
37
HAWORTH TOWN
37
CHECOTAH CITY
37
EUFAULA CITY
37
HANNA TOWN
37
MADILL CITY
57
D O U G H E R T Y TOWN
57
S U L P H U R CITY
57
H I C K O R Y TCWN
57
DELAWARE TOWN
57
L E N A P A H TOWN
57
30LEY TOWN
57
CASTLE TOWN
57
OKEMAH CITY
57
PADEN TCWN
PAGE213
OF THE
TREASURY
05/2 3/78 AT 31:25
U.S. D E P A R T M E N T
OF THE TREASURY
DISTRESSED AREA ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE
37
37
17
S7
37
57
57
57
57
57
57
57
57
S7
S7
37
37
37
37
37
57
57
57
37
37
37
37
57
57
57
57
57
57
57
57
TITLE
WELEETKA CITY
MIDWEST CITY CIT
BEGGS CITY
BRYANT TOWN
DEWAR CITY
HENRYETTA CITY
HOFFMAN TOWN
MORRIS CITY
OKMULGEE CITY
GRAYSON TOWN
COMMERCE CITY
PICHER CITY
QUAPAW TOWN
WYANDOTTE TOWN
PEORIA TOWN
BLACKBURN TOWN
MARAMEC TOWN
SKEOEE TOWN
ALDERSON TOWN
ASHLAND TOWN
CANADIAN TOWN
CROWDER TOWN
HAILEYVILLE CITY
HARTSHORNE CITY
INDIANOLA TOWN
KIOWA TOWN
KREBS CITY
MCALESTER CITY
PITTSBURG TOWN
QUINTON TOWN
SAVANNA TOWN
BYNG TOWN
ALBION TOWN
ANTLERS TOWN
CLAYTON TOWN
STATE = 57:
127 RECORDS
TEST
0 5 / 2 5 / 7 8 AT 31:25
U.S. D E P A R T M E N T OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
37 RATTAN TOWN
STATE = 37: 1 RECORDS
PAGE215
TREASURY
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
PAGE21G
OF THE
TREASURY
D I S T R E S S E D AREA E L I G I B I L I T Y
(ELIGIBLE GOVERNMENTS)
STATE TITLE
37 KONAWA TOWN
37
SASAKWA TOWN
37
WEWOKA CITY
37
MARBLE CITY TCWN
37
MCFFETT TOWN
57
PARADISE HILL TOWN
57
TEXHOMA TOWN
57
GRANDFIELD CITY
37
HOLLISTER TOWN
STATE = 37: 9 RECORDS
TEST
05/23/78 AT 31:25
U.S. DEPARTMENT
DISTRESSED
TREASURY
AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
38 BAKER COUNTY
38
CLATSOP COUNTY
38
COOS COUNTY
38
GRANT COUNTY
38
LAKE COUNTY
38
WASCO COUNTY
58
WHEELER COUNTY
58
BAKER CITY
58
HAINES TOWN
38
HALFWAY TOWN
38
RICHLANO TOWN
58
SUMPTER CITY
58
UNITY CITY
58
GREENHORN CITY
58
ASTORIA CITY
58
GEARHART CITY
58
HAMMOND TOWN
58
SEASIDE CITY
58
BANDON CITY
58
COOS BAY CITY
58
COOUILLE CITY
58
EASTSIDE CITY
58
MYRTLE POINT CITY
58
POWERS CITY
58
LAKESIDE CITY
58
PORT ORFJRO CITY
58
DAYVILLE TOWN
58
LCNG CREEK TOWN
58
SENECA CITY
58
LAKEVIEW TOWN
58
PAISLEY TCWN
38
NYSSA CITY
38
JORDAN VALLEY TOWN
38
GARIBALDI CITY
38
NEHALEM TOWN
38
ANTELOPE CITY
38
MAUPIN TOWN
38
THE DALLES CITY
56
FOSSIL TOWN
58
MITCHELL TOWN
58
SPRAY TOWN
STATE = 58: 41 RECORDS
PAGE217
OF THE
0 5 / 2 3 / 7 8 AT 31:25
U.S. DEPARTMENT
PAGE218
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 ADAMS COUNTY
39
ARMSTRONG COUNTY
39
BEDFORD COUNTY
39
BERKS COUNTY
39
BLAIR COUNTY
39
BRADFORD COUNTY
39
6UTLER COUNTY
39
CAMBRIA COUNTY
39
CAMERON COUNTY
39
CARBON COUNTY
39
CLEARFIELD COUNTY
39
CLINTON COUNTY
39
COLUMBIA COUNTY
39
CRAWFORD COUNTY
39
DELAWARE COUNTY
39
ELK COUNTY
59
ERIE COUNTY
59
FAYETTE COUNTY
39
FOREST COUNTY
39
FRANKLIN COUNTY
39
FULTON COUNTY
39
GREENE COUNTY
39
HUNTINGDON COUNTY
39
JUNIATA COUNTY
39
LACKAWANNA COUNTY
39
LAWRENCE COUNTY
59
LUZERNE COUNTY
59
LYCOMING COUNTY
39
MCKEAN COUNTY
39
MERCER COUNTY
39
MIFFLIN COUNTY
39
MCNROE COUNTY
39
MONTGOMERY COUNTY
39
MONTOUR COUNTY
39
NORTHUMBERLAND COUNTY
39
POTTERCOUNTY
39
SCHUYLKILL COUNTY
39
SOMERSET COUNTY
39
SULLIVAN COUNTY
59
TIOGA COUNTY
59
VENANGO COUNTY
59
WARREN COUNTY
39
WASHINGTON COUNTY
39
WAYNE COUNTY
39
WESTMORELAND COUNTY
39
WYOMING COUNTY
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 AB80TTST0WN BOROUGH
39
BENDERSVILLEi BOROUGH
39
BIGLERVILLE BOROUGH
39
EAST BERLIN BOROUGH
39
FAIRFIELD 30R0UGH
39
GETTYSBURG BOROUGH
39
LITTLESTOWN BCROUGH
39
MCSHERRYSTOWN BOROUGH
59
NEW OXFORD BOROUGH
59
YORK SPRINGS BOROUGH
59
BCNNEAUVILLEi BOROUGH
59
CARROLL VALLEY BORO
59
AVALON BOROUGH
59
BALDWIN 30R0UGH
59
BLAWNOX BOROUGH
59
8RACKENRIDGE BOROUGH
59
BRADDOCK BOROUGH
59
BRADDOCK HILLS BOROUGH
59
CASTLE SHANNON BOROUGH
59
CCRAOPOLIS BOROUGH
59
CRAFTON BOROUGH
59
DCRMONT 30R0UGH
59
E PITTSBURGH BOROUGH
59
ELIZABETH 30R0UCH
59
EMSWORTH BOROUGH
59
ETNA BOROUGH
59
HOMESTEAO BOROUGH
59
INGRAM BOROUGH
59
MCKEESPORT CITY
59
MCKEES ROCKS BOROUGH
59
MILLVALE BOROUGH
59
MOUNT OLIVER BOROUGH
59
NORTH BRADDOCK BOROUGH
59
PITCAIRN BOROUGH
59
PITTSBURGH CITY
59
RANKIN BOROUGH
59
SHARPS8URG BOROUGH
59
SPRINGDALE BOROUGH
59
SWISSVALE BOROUGH
59
TARENTUM BOROUGH
59
VERONA BOROUGH
59
VERSAILLES BOROUGH
59
WEST VIEW BOROUGH
59
WHITAKER BOROUGH
59
WILMEROING BOROUGH
59
LINCOLN BOROUGH
PAGE219
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 SEWICKLEY HILLS BOROUGH
39 HAYSVILLE BOROUGH
39
APOLLO BOROUGH
39
APPLEWOLD BOROUGH
39 DAYTON BOROUGH
39 ELDERTON BOROUGH
39 FORD CITY 30R0UGH
39 FORD CLIFF BOROUGH
39 KITTANNING 80R0UGH
39 LEECHBURG 30R0UGH
39
MANORVILLE BOROUGH
39
NCRTH APOLLO, BOROUGH
39
PARKER CITY
39
RURAL VALLEY BOROUGH
39
SCUTH BETHLEHEM BOROUGH
39
WEST KITTANNING BOROUGH
39 WCRTHINGTON BOROUGH
39
BEAVER FALLS CITY
39 BRIDGEWATER 3CR0UGH
39 EAST ROCHESTER BOROUGH
39 FALLSTON BOROUGH
39 HCMEWOOD BOROUGH
39 KOPPEL BOROUGH
39 NEW BRIGHTON BOROUGH
39
SHIPPINGPORT 80R0UGH
39
8IG BEAVER BOROUGH
39
BEDFORD 30R0UGH
39 CCALDALE BOROUGH
39
EVERETT 30R0UGH
39 HOPEWELL BOROUGH
39 HYNDMAN 30R0UGH
39
MANNS CHOICE BOROUGH
39
NEW PARIS BOROUGH
39 PLEASANTVILLE 30R0UGH
39
RAINS8URG 30R0UGH
39
ST CLAIRSVILLE BOROUGH
39 SAXTON BOROUGH
39 SCHELLSBURG BOROUGH
39 W0008URY BOROUGH
39 CENTERPORT BOROUGH
39 LAURELDALE BOROUGH
39 LENHARTSVILLE BOROUGH
39 LYONS 80R0UGH
39
MOHNTON 30R0UGH
59
READING CITY
59
ST LAWRENCE BOROUGH
PAGE220
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 SHOEMAKERSVILLE BOROUGH
39 STRAUSSTOWN BOROUGH
39
ALTOONA CITY
39 8ELLW00D BOROUGH
39 DUNCANSVILLE BOROUGH
39 HCLLI0AYS3URG 30R0UGH
39 MARTINSBJRG 3CR0UGH
39
NEWRY 80R0UGH
39
ROARING SPRING BOROUGH
39 TYRONE BOROUGH
39 WILLIAMS3URG BOROUGH
39 ALBA BOROUGH
39 ATHENS BOROUGH
39 BURLINGTON BOROUGH
39 CANTON BOROUGH
39 LE RAYSVILLE BOROUGH
39
MONROE BOROUGH
39 NEW ALBANY BOROUGH
39 ROME BOROUGH
39 SAYRE 30R0UGH
39 SCUTH WAVERLY BOROUGH
39 SYLVANIA BOROUGH
39 TOWANDA BOROUGH
39 TROY BOROUGH
39 WYALUSING BOROUGH
39 BRISTOL BOROUGH
39 MORRISVILLE BOROUGH
39 PENNDEL BOROUGH
39 RICHLANDTOWN BOROUGH
39 TRUMBAUERSVILLE BOROUGH
39 BRUIN BOROUGH
39 BUTLER CITY
39 CALLERY 30R0UGH
39 CHERRY VALLEY BOROUGH
39 CCNNOCUENESSING BOROUGH
39 EAST BUTLER 30R0UGH
39 EAU CLAIRE BOROUGH
39 EVANS CITY BOROUGH
39 FAIRVIEW BOROUGH
39 HARMONY BOROUGH
39 HARRISVILLE BOROUGH
39 KARNS CITY BOROUGH
39
MARS BOROUGH
39 PETROLIA BOROUGH
39 PCRTERSVILLE BOROUGH
39
PROSPECT BOROUGH
PAGE221
05/2 3/78 AT 31:25
U.S. DEPARTMENT
DISTRESSED
AREA
(ELIGIBLE
STATE
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
59
59
59
59
59
59
59
59
59
39
39
PAGE222
OF THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TITLE
SLIPPERY ROCK BOROUGH
VALENCIA BOROUGH
WEST LIBERTY BOROUGH
WEST SUN3URY BOROUGH
ZELIENOPLE BOROUGH
CHICORA 30R0UGH
ASHVILLE BOROUGH
BARNES80RC BOROUGH
BROWNSTOWN BOROUGH
CARROLLTOWN 30R0UGH
CASSANDRA BOROUGH
CHEST SPRINGS BOROUGH
CRESSON BOROUGH
OAISYTOWN 30R0UGH
DALE BOROUGH
EAST CONEMAUGH BOROUGH
EBENSBURG 30RCUGH
FERNDALE BOROUGH
GALLITZIN BOROUGH
GEISTCWN BOROUGH
HASTINGS BOROUGH
JOHNSTOWN CITY
LILLY BOROUGH
LCRAIN BOROUGH
LCRETTO BOROUGH
NANTY GLO BOROUGH
PATTON BOROUGH
PORTAGE BOROUGH
SANKERTOWN BOROUGH
SCALP LEVEL BOROUGH
SOUTH FORK BOROUGH
SOUTHMONT BOROUGH
SPANGLER BOROUGH
SUMMERHILL BOROUGH
TUNNELHILL BOROUGH
VINTQNDALE BOROUGH
WESTMONT BOROUGH
WILMORE BOROUGH
EHRENFELD 30R0UGH
DRIFTWOOD BOROUGH
EMPORIUM BOROUGH
BEAVER MEADOWS BOROUGH
JIM THORPE BOROUGH
LANSFORO BOROUGH
LEHIGHTON BOROUGH
PALMERTON BOROUGH
TEST
05/23/78 AT 01:25
U.S. DEPARTMENT
PAGE223
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 PARRYVILLE BOROUGH
39
SUMMIT HILL 3OR0UGH
39
WEISSPORT 30R0UGH
39
NESQUEHONING BOROUGH
39
BELLEFONTE BOROUGH
39
HOWARD BOROUGH
39
MILESBUR5 30R0UGH
39
MILLHEIM BOROUGH
39
PHILIPSBURG 80R0UGH
39
PCRT MATILDA BOROUGH
39
SNOW SHOE BOROUGH
39
S PHILIPSBURG BOROUGH
39
U M O N V I L L E BOROUGH
39
AVQNDALE BOROUGH
39
COATESVILLE CITY
39
MOUENA BOROUGH
39
OXFORD BOROUGH
39
8RISBIN BOROUGH
39
CHESTER HILL BOROUGH
39
CLEARFIELD BOROUGH
39
COALPORT BOROUGH
39
CURWENSVILLE BOROUGH
59
OU 80IS CITY
59
GLEN HOPE 3DR0UGH
59
GRAMPIAN BOROUGH
59
HOUTZDALE 30RCUGH
59
IRVONA BOROUGH
59
MAHAFFEY BOROUGH
59
NEWBURG 30R0UGH
59
NEW WASHINGTON 80R0UGH
39
OSCEOLA BOROUGH
39
RAMEY BOROUGH
39
TROUTVILLE BOROUGH
39
WALLACETON BCROUGH
39
WESTOVER BOROUGH
39
AVIS BOROUGH
39
BEECH CREEK 30R0UGH
39
FLEMINGTON 80R0UGH
39
LCCK HAVEN CITY
39
LOGANTON BOROUGH
39
MILL HALL BOROUGH
39
RENOVO BOROUGH
39
SCUTH RENOVO BOROUGH
39
BENTON BOROUGH
39
BERWICK BOROUGH
39
BL00MS8URG TOWN
TREASURY
05/23/76 AT 31:25
U.S. DEPARTMENT
PAGE224
OF THE
DISTRESSED AREA ELIGIBILITY TE'ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 BRIAR CREEK BOROUGH
39
CATAWISSA BOROUGH
59
CENTRALIA BOROUGH
59
MILLVILLE 30R0UGH
59
ORANGEVILLE BOROUGH
59
STILLWATER BOROUGH
59
BLOOMING VALLEY 80R0UGH
59
CAMBRIDGE SPRGS BOROUGH
59
CENTERVILLE 30R0UGH
59 COCHRANTON BOROUGH
59
CCNNEAUT LAKE BOROUGH
59
CCNNEAUTVILLE 80R0UGH
59
HYOETOWN BOROUGH
59
LINESVILLE BOROUGH
59
MEADVILLE CITY
59
SAEGERTOWN BOROUGH
59
SPARTANS3URG BOROUGH
59
SPRING3CR0 BOROUGH
39
TITUSVILLE CITY
39
TOWNVILLE 30R0UGH
39
VENANGO 30R0UGH
39
WOODCOCK BOROUGH
39
BERRYS8UPG BOROUGH
39
ELIZABETHVILLE BOROUGH
39
HALIFAX BOROUGH
39
HARRIS8URG CITY
39
LYKENS BOROUGH
59
MILLERSBURG 30R0UGH
59
WILLIAMSTOWN BOROUGH
59
BROOKHAVEN BOROUGH
59
CHESTER CITY
59
CLIFTON HEIGHTS BOROUGH
59
COLLINGDALE BOROUGH
59
COLWYN BOROUGH
59
DARBY BOROUGH
59
EAST LANSDOWNE BOROUGH
39
EODYSTONE BOROUGH
39
FCLCRCFT BOROUGH
39
GLENOLDEN 30R0UGH
39
LANSDCWNE BOROUGH
39
MARCUS HOOK BOROUGH
39
MEDIA BOROUGH
39
MILLBOURNE BOROUGH
39
MORTON BOROUGH
39
NORWOOD BOROUGH
39
PARKSIOE BOROUGH
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE
266-274 O - 78 - 19
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
TITLE
PROSPECT PARK 30R0UGH
RIOLEY PARK BOROUGH
ROSE VALLEY BOROUGH
RUTLEDGE BOROUGH
SHARON HILL BOROUGH
TRAINER 30R0UGH
UPLAND BOROUGH
YEADON BOROUGH
JCHNSCNBURG BOROUGH
RIDGWAY BOROUGH
ST MARYS BOROUGH
ALBION BOROUGH
CCRRY CITY
EAST SPRINGFIELD BOROUGHI
EDIN30R0 BOROUGH
ELGIN BOROUGH
ERIE CITY
FAIRVIEW BOROUGH
MC KEAN 30R0
MILL VILLAGE BORO
NORTH EAST BOROUGH
PLATEA BOROUGH
UNION CITY BOROUGH
WATERFORD 30R0UGH
WATTSBURG 30RCUGH
WESLEYVILLE BOROUGH
BELLE VERNON BOROUGH
CONNELLSVILLE CITY
OAWSON BOROUGH
DUNBAR 80R0UGH
EVERSON BOROUGH
FAIRCHANCE BOROUGH
FAYETTE CITY BOROUGH
MARKLEYS3URG BOROUGH
MASONTOWN 30R0UGH
NEWELL BOROUGH
OHIOPYLE BOROUGH
PERRYOPOLIS BOROUGH
POINT MARION BORO' ^H
S CONNEL.SVILLE BOROUGH
UNICNTOWN CITY
VANDERBILT BOROUGH
TIONESTA BOROUGH
CHAM8ERS3URG BOROUGH
MCNT ALTO 30R0UGH
ORRSTOWN 80R0UGH
PAGE225
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 WAYNESBORO BOROUGH
39 MC CONNELLSBURG BOROUGH
39 CLARKSVILLE BOROUGH
39 GREENS80R0 BOROUGH
39 JEFFERSON BOROUGH
39
RICES LANDING BOROUGH
39 WAYNESBURG BOROUGH
39
ALEXANDRIA BOROUGH
39 BIRMINGHAM BOROUGH
39 BROAD TOP CITY BOROUGH
39 CASSVILLE 30R0UGH
39 COALMONT BOROUGH
39 DUDLEY BOROUGH
39 HUNTINGDON BOROUGH
39 MAPLETON BOROUGH
59 MARKLESBURG BOROUGH
59 MILL CREEK BOROUGH
59 MOUNT UNION BOROUGH
59 ORBISONIA BOROUGH
59 PETERSBURG BOROUGH
59 RCCKHILL BOROUGH
59 SALTILLO 30R0UGH
59 SHADE GAP 30R0UGH
59 SHIRLEYBURG BOROUGH
59 THREE SPRINGS 30R0UGH
59 MIFFLIN 30R0UGH
39
MIFFLINTOWN BOROUGH
39 PORT ROYAL BOROUGH
39 THOMPSONTOWN BOROUGH
39 ARCHBALD BOROUGH
39 BLAKELY 80R0UGH
39 CARBONOALE CITY
39 CLARKS SUMMIT 30R0UGH
39 DICKSON CITY BOROUGH
39 DUNMORE BOROUGH
39 JERMYN BOROUGH
39
MAYFIELD BOROUGH
39 MCOSIC BOROUGH
39 MOSCOW BOROUGH
39 OLD FORGE 30R0UGH
39 OLYPHANT BOROUGH
39 SCRANTON CITY
39 TAYLOR BOROUGH
39 THROOP BQPOUGH
39 VANDLING BOROUGH
39 JESSUP BOROUGH
PAGE22G
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 ADAMSTOWN 30R0UGH
39 LANCASTER CITY
39 MARIETTA BOROUGH
39 TERRE HILL BOROUGH
39 BESSEMER BOROUGH
39 ELLPORT BOROUGH
39 ENON VALLEY BOROUGH
39 NEW CASTLE CITY
39
NEW WILMINGTON BOROUGH
39 SOUTH NEW CASTLE BOROUGH
39 VOLANT BOROUGH
39 WAMPUM BOROUGH
39 LEBANON CITY
39 ALENTCWN CITY
39 ASHLEY BOROUGH
39
AVOCA BOROUGH
39 CCURTDALE 30RCUGH
39 DALLAS BOROUGH
39 DUPONT BOROUGH
39 DURYEA BOROUGH
39 EDWARDSVILLE BOROUGH
39 EXETER BOROUGH
39 FORTY FORT BOROUGH
39 FREELAND BOROUGH
39 HAZLETON CITY
59 HUGHESTOWN BOROUGH
59 JEDDO BOROUGH
59 KINGSTON 30R0UGH
59 LAFLIN 80R0UGH
59 LARKSVILLE BOROUGH
59 LAUREL RUN BOROUGH
59 LUZERNE BOROUGH
59 NANTICOKE CITY
59 NESCOPECK BOROUGH
59 NEW COLUMBUS BOROUGH
59 PITTSTON CITY
59 PLYMOUTH BOROUGH
59 PRINGLE 30R0UGH
59 SHICKSHINNY 30R0UGH
59 SUGAR NOTCH BOROUGH
59 SWOYERSVILLE BOROUGH
59 WARRIOR RUN BOROUGH
59 WEST HAZLETON BOROUGH
59 WEST PITTSTON BOROUGH
39 WEST WYOMING BOROUGH
39 WHITE HAVEN BOROUGH
PAGE227
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 WILKES BARRE CITY
39 WYOMING 30R0UGH
39 YATESVILLE BOROUGH
39 HARVEYS LAKE BOROUGH
39 PENN LAKE PARK 60R0
39 DUBOISTOWN BOROUGH
39 HUGHESVILLE 30ROUGH
39 JERSEY SHORE BOROUGH
39 MONTGOMERY BOROUGH
39 MONTOURSVILLE 30R0UGH
59 MUNCY BOROUGH
59 PICTURE ROCKS 30R0UGH
59 SALLADAS8URG BOROUGH
59 S WILLIAMSPORT BOROUGH
59 WILLIAMSPORT CITY
39
BRADFORO CITY
59 ELORED BOROUGH
59 KANE BOROUGH
39 LEWIS RUN BOROUGH
39 MOUNT JEWETT BOROUGH
39 PORT ALLEGANY BOROUGH
39 SMETHPORT 30RCUGH
39 CLARK BOROUGH
39 FARRELL CITY
39 FREDONIA BOROUGH
39 GREENVILLE BOROUGH
39 GROVE CITY BOROUGH
39 JACKSON CENTER BOROUGH
39 JAMESTOWN 30R0UGH
39
MERCER BOROUGH
39 NEW LEBANON BOROUGH
39 SANOY LAKE BOROUGH
39 SHARON CITY
39 SHARPSVILLE 30R0UGH
39 SHEAKLEYVILLE BOROUGH
39 STONEBORO 3CR0
39 WHEATLAND BOROUGH
39 BURNHAM BOROUGH
39 KISTLER BOROUGH
39 LEWJSTOWN 30ROUCH
39 MCVtYTOWN 10ROUGH
39
NEWTON HAMILTON BOROUGH
39 JUNIATA TERRACE 80RO
59 E STROUDSBURG BOROUGH
59 MOUNT POCONO BOROUGH
59 STROUDSBURG SOROUGH
PAGE228
05/23/78 AT 01:25
U.S. DEPARTMENT OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 AMBLER BOROUGH
39 BRIDGEPORT BOROUGH
39 BRYN ATHYN 80R0UGH
39 CCNSHOHCCKEN BOROUGH
39 E GREENVILLE! BOROUGH
39 GREENLANE 30R0UGH
59 HATBORO BOROUGH
39 HATFIELD BOROUGH
39 JENKINTOWN BOROUGH
39 NARBERTH BOROUGH
39 NCRRISTOWN BOROUGH
39 NORTH WALES BOROUGH
39 PENNSEURG 30R0UGH
39 PCTTSTOWN 30ROUGH
39 RED HILL BOROUGH
39 ROCKLEOGE 30ROUGH
39
ROYERSFORD BOROUGH
39 SCHWENKSVILLE BOROUGH
39 SCUDERTON BOROUGH
39 W CONSHOHOCKEN BOROUGH
39 DANVILLE BOROUGH
39 BANGOR BOROUGH
39 EASTON CITY
59 FREEMANS3URG BOROUGH
59 N CATASAUQUA BOROUGH
59
RCSETO BOROUGH
59 TATAMY BOROUGH
59 WILSON BOROUGH
59 KULPMONT BOROUGH
59 MC EWENSVILLE BOROUGH
59
MARION HEIGHTS BOROUGH
59 MILTON BOROUGH
59 MOUNT CARMEL BOROUGH
39 NORTHUMBERLAND BOROUGH
59 RIVERSIDE 30ROUGH
59 SHAMOKIN CITY
59 SNYDERTOWN BOROUGH
59 SUNBURY CITY
59 WATSONTOWN BOROUGH
59 PHILADELPHIA CITY
59 MATAMORAS 30R0UGH
59 AUSTIN BOROUGH
59 COUDERSPORT BOROUGH
59 GALETON BOROUGH
59 ULYSSES BOROUGH
59 OSWAYO BOROUGH
PAGE229
05/25/78 AT 31:25
U.S. DEPARTMENT OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TE*ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
59 SHINGLEHOUSE BOROUGH
59 ASHLAND 30R0UGH
59 AUBURN BOROUGH
59 COALDALE BOROUGH
59 CRESSONA BOROUGH
59 OEER LAKE BOROUGH
59 FRACKVILLE BOROUGH
59 GILBERTON 30R0UGH
59 GIRARDVILLE BOROUGH
59 GORDON BOROUGH
59 LANDINGVILLE BOROUGH
39 MC ADOO 30R0UGH
39
MAHANOY CITY BOROUGH
39 MECHANICSVILLE BOROUGH
39 MIDDLEPORT BOROUGH
39 MINERSVILLE BOROUGH
39
MCUNT CARBON BOROUGH
39
NEW PHILA 30R0UGH
39 NEW RINGGOLD: BOROUGH
59 PALO ALTO 30R0UGH
59 PINE GROVE BOROUGH
59 PORT CAR30N BOROUGH
59 PORT CLINTON BOROUGH
59 POTTSVILLE CITY
59 RINGTOWN BOROUGH
59 ST CLAIR BOROUGH
39 SCHUYLKILL HAVEN BOROUGH
39 SHENANDOAH BOROUGH
39 TAMAQUA 30R0UGH
39 TOWER CITY BOROUGH
39 TREMONT 30R0UGH
39 BEAVERTOWN BOROUGH
39 FREEBURG BOROUGH
39 SELINSGRCVE 30R0UGH
39 MC CLURE BOROUGH
39 ADDISON BOROUGH
39 8ERLIN BOROUGH
59 BOSWELL 30R0UGH
59 CASSELMAN 30R0UGH
59 CENTRAL CITY BOROUGH
59 CONFLUENCE BOROUGH
59 GARRETT BOROUGH
39 HOOVERSVILLEi BOROUGH
39 JENNERTOWN BOROUGH
39 MEYERSDALE BOROUGH
39 NEW BALTIMORE BOROUGH
PAGE230
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 NEW CENTERVILLE BOROUGH
39 PAINT BOROUGH
39 RCCKWOOD BOROUGH
39 SALISBURY 30R0UGH
39 SHANKSVILLE 30R0UGH
39 SOMERSET BOROUGH
39 STOYSTOWN BOROUGH
39 URSINA BOROUGH
39 WELLERSBURG BOROUGH
59 WINDBER 30R0UGH
59 CALLIMONT 30R0UGH
59 SEVEN SPRINGS BOROUGH
59 DUSHORE BOROUGH
59 EAGLES MERE BOROUGH
59 FCRKSVILLE
BOROUGH
59 LAPORTE BOROUGH
59 BLOSSBURG 30R0UGH
59 ELKLAND BOROUGH
59 KNOXVILLE 30R0UGH
59 LAWRENCEVILLE BOROUGH
59 LIBERTY BOROUGH
59
MANSFIELD BOROUGH
59 ROSEVILLE 30R0UGH
59 TIOGA BOROUGH
59 WELLSBORO 30R0UGH
59 WESTFIELD 30R0UGH
59 HARTLETON 30R0UGH
59 LEWISBURG BOROUGH
59 CLINTONVILLB BOROUGH
59 CCOPERSTOWN
BOROUGH
59 EMLENTON BOROUGH
59 FRANKLIN CITY
59 OIL CITY
39 PLEASANTVILLE 30R0UGH
39 POLK BOROUGH
39 ROUSEVILLE BOROUGH
39 UTICA BOROUGH
39 BARKEYVILLE BOROUGH
39 SUGARCREEK BOROUGH
39 BEAR LAKE BOROUGH
39 CLARENOON BQRO
39 TIOIOUTE BOROUGH
39 YOUNGSVILLE BOROUGH
39 CALIFORNIA 80R0UGH
39 CANONSBURG BOROUGH
39 CENTREVILLE BOROUGH
PAGE231
05/23/73
A
;J;
S
^
P A R T M E N T
OF
T H E
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 COKEBURG BOROUGH
39 DONORA BOROUGH
39 ELCO BOROUGH
39 FINLEYVILLE BOROUGH
39 HOUSTON BOROUGH
39 MARIANNA BOROUGH
39 MIDWAY BOROUGH
39
MONONGAHELA CITY
39
NCRTH CHARLEROI BOROUGH
39 ROSCOE BOROUGH
39 SPEERS BOROUGH
39 TWILIGHT BOROUGH
59 WASHINGTON CITY
59 WEST ALEXANDER BOROUGH
39 BETHANY 30R0UCH
39 HAWLEY BOROUGH
39 HONESDALE 30R0UGH
39
PROMPTCN BOROUGH
39 STARRUCCA BOROUGH
59 WAYMART BOROUGH
59 ARNOLD CITY
59
ARONA BOROUGH
59 AVONMORE BOROUGH
39 BCLIVAR BOROUGH
39 DERRY 30RCUGH
39 DONEGAL 30R0UGH
39 EAST VANDERGRIFT BQRO
39 EXPORT BOROUGH
39 GREENSBURG CITY
39 HUNKER BOROUGH
39 HYDE PARK 30R0UGH
39
IRWIN 80R0UGH
39 JEANNETTE CITY
39 LATROBE BOROUGH
39 LIGONIER BOROUGH
39
MANOR BOROUGH
39 MCNESSEN CITY
39
MOUNT PLEASANT 80R0UGH
39
NEW ALEXANDRIA BOROUGH
39
NEW FLORENCE BOROUGH
39 NEW KENSINGTON CITY
39 N BELLE VERNON BORO
39
NORTH IRWIN BOROUGH
59 OKLAHOMA BOROUGH
39 PENN BOROUGH
59 SCOTTOALE 30R0UGH
TREASljRY
05/23/78 AT 01:25
U.S. DEPARTMENT
PAGE233
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 SEWARD BOROUGH
39
SMITHTON BOROUGH
39
SOUTH GREENS8URG BOROUGH!
39
S W GREENS3URG BORO
39
VANDERGRIFT BOROUGH
39
WEST LEECH3URG BOROUGH
39
WEST NEWTON BOROUGH
39
YOUNGSTOWN BOROUGH
39
YOUNGWOOD 30R0UGH
39
LCWER BURRELL CI TY
39
NEW STANTON BOROUGH
59
FACTORYVILLE BOROUGH
59
LACEYVILLE BOROUGH
59
MESHOPPEN 3CR0UGH
59
NICHOLSON 30ROUGH
59
TUNKHANNOCK BOROUGH
39
D£LTA BOROUGH
59
EAST PROSPECT 30ROUGH
59
FAWN GROVE BOROUGH
59
FRANKLINTCWN BOROUGH
59
HALLAM 80R0UGH
59
HANOVER BOROUGH
59
NORTH YORK BOROUGH
39
RAILROAD BOROUGH
39
RED LION BOROUGH
39
WEST YORK 80R0UGH
39
WRIGHTSVILLG BOROUGH
39
YORK CITY
39
YCRKANA BOROUGH
39
BERWICK TOWNSHIP
39
BUTLER TOWNSHIP
39
CONEWAGO TOWNSHIP
39
CUMBERLAND TOWNSHIP
59
FRANKLIN TOWNSHIP
59
FREEDOM TOWNSHIP
59
GERMANY TOWNSHIP
59
HAMILTON3AN TOWNSHIP
59
HIGHLAND TOWNSHIP
59
HUNTINGTON TOWNSHIP
59
LATIMORE TOWNSHIP
59
MENALLEN TOWNSHIP
59
MT JOY TOWNSHIP
59
MOUNT PLEASANT TOWNSHIP
39
OXFORD TOWNSHIP
59
READING TOWNSHIP
59
STRABAN TOWNSHIP
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
OF
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 TYRONE TOWNSHIP
39
UNION TOWNSHIP
39
COLLIER TOWNSHIP
39
CRESCENT TOWNSHIP
59
EAST DEER TOWNSHIP
59
FAWN TOWNSHIP
59
INDIANA TOWNSHIP
59
KILBUCK TOWNSHIP
39
PENN HILLS TOWNSHIP
39
RESERVE TOWNSHIP
39
S FAYETTE TOWNSHIP
39
S VERSAILLES TOWNSHIP
39
SPRINGOALE TOWNSHIP
39
STOWE TOWNSHIP
59
WEST OEER TOWNSHIP
59
BETHEL TOWNSHI?
59
BCGGS TOWNSHIP
59
BRADYS EEND TOWNSHIP
59
BURRELL TOWNSHIP
39
CADOGAN TOWNSHIP
39
COWANSHANNOCK TOWNSHIP
39
EAST FRANKLIN TOWNSHIP
39
GILPIN TOWNSHIP
39
HCVEY TOWNSHIP
39
KISKIMINETAS TOWNSHIP
39
KITTANNING TOWNSHIP
39
MAOISON TOWNSHIP
39
MAHONING TOWNSHIP
39
MANOR TOWNSHIP
39
NORTH BUFFALO TOWNSHIP
39
PARKS TOWNSHIP
39
PERRY TOWNSHIP
39
PINE TOWNSHIP
39
PLUMCREEK TOWNSHIP
39
RAYBURN TOWNSHIP
39
REOBANK TOWNSHIP
39
SOUTH BEND TOWNSHIP
39
SOUTH BUFFALO TOWNSHIP
39
SUGARCREEK TOWNSHIP
39
VALLEY TOWNSHIP
39
WEST FRANKLLN TOWNSHIP
39
MARION TOWNSHIP
39
N SEWICKLEY TOWNSHIP
39
PULASKI TOWNSHIP
39
BEDFORD TOWNSHIP
39
BLOCMFIELD TOWNSHIP
THE TREASJRY
PArr9l/
r btZ5
*
*
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE235
OF THE
DISTRESSED AREA ELIGIBILITY FEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
59 BROAD TOP TOWNSHIP
59
COLERAIN TOWNSHIP
59
CUMBERLAND VALLEY TWP
59
E PROVIDENCE TOWNSHIP
59
E ST CLAIR TOWNSHIP
59
HARRISON TOWNSHIP
59
HCPEWELL TOWNSHIP
39
JUNIATA TOWNSHIP
39
KIMMELL TOWNSHIP
39
KING TOWNSHIP
39 LIBERTY TOWNSHIP
39
LINCOLN TOWNSHIP
39
LONDONDERRY TOWNSHIP
39
MANN TOWNSHIP
39
MONRCE TOWNSHIP
39
NAPIER TOWNSHIP
39
SNAKE SPRG VALLEY TWP
39
SOUTHAMPTON TOWNSHIP
39
SOUTH WO0D3URY TOWNSHIP
39
UNION TOWNSHIP
39
W PROVIDENCE TOWNSHIP
59
W ST CLAIR TOWNSHIP
59
BERN TOWNSHIP
59
EARL TOWNSHIP
59
EXETER TOWNSHIP
59
LONGSWAMP TOWNSHIP
59
MAIOENCREEK TOWNSHIP
59
MARION TOWNSHIP
59
N HEIDEL3ERG TOWNSHIP
39
ONTELAUNEE TOWNSHIP
39
S HEIDELBERG TOWNSHIP
39
TULPEHOCKEN TOWNSHIP
39
UNION TOWNSHIP
39
ALLEGHENY TCWNSHIP
39
ANTIS TOWNSHIP
39
BLAIR TOWNSHIP
39
CATHARINE TOWNSHIP
39
FREEDOM TOWNSHIP
39
GREENFIELD TOWNSHIP
39
HUSTON TOWNSHIP
39
JUNIATA TOWNSHIP
39
LCGAN TOWNSHIP
59
NCRTH WC008URY TOWNSHIP
59
SNYDER TOWNSHIP
39
TAYLOR TOWNSHIP
39
TYRONE TOWNSHIP
TREASURY
05/23/78 AT 01:25
U.S. DEPARTMENT
DISTRESSED
AREA
(ELIGIBLE
STATE
39
39
39
39
39
39
39
39
39
59
59
59
39
59
59
59
59
59
59
59
59
59
59
59
59
39
39
39
39
39
39
39
39
39
39
39
59
39
39
39
39
59
59
59
39
39
OF THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TITLE
WOODBURY TOWNSHIP
ARMENIA TOWNSHIP
ASYLUM TOWNSHIP
ATHENS TOWNSHIP
BURLINGTON TOWNSHIP
CANTON TOWNSHIP
COLUMBIA TOWNSHIP
FRANKLIN TOWNSHIP
GRANVILLE TOWNSHIP
HERRICK TOWNSHIP
LEROY TOWNSHIP
LITCHFIELD TOWNSHIP
MONROE TOWNSHIP
N TOWANDA TOWNSHIP
ORWELL TOWNSHIP
OVERTON TOWNSHIP
PIKE TOWNSHIP
RIDGEBURY TOWNSHIP
ROME TOWNSHIP
SHESHEQUIN TOWNSHIP
SMITHFIELO TOWNSHIP
S CREEK TOWNSHIP
SPRINGFIELD TOWNSHIP
STANDING STONE TOWNSHIP
STEVENS TOWNSHIP
TERRY TOWNSHIP
TOWANDA TOWNSHIP
TROY TOWNSHIP
TUSCARORA TOWNSHIP
ULSTER TOWNSHIP
WARREN TOWNSHIP
WELLS TOWNSHIP
W BURLINGTON TOWNSHIP
WILMOT TOWNSHIP
WINDHAM TOWNSHIP
WYALUSING TOWNSHIP
BRISTOL TOWNSHIP
FALLS TOWNSHIP
LCWER SOUTHAMPTON TWP
MIODLETOWN TOWNSHIP
ADAMS TOWNSHIP
ALLEGHENY TOWNSHIP
BRADY TOWNSHIP
BUTLER TOWNSHIP
CENTER TOWNSHIP
CHERRY TOWNSHIP
TEST
PAGE23G
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE237
OF THE
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 CLAY TOWNSHIP
39
CLEARFIELD TOWNSHIP
39
CLINTON TOWNSHIP
59
CONCORD TOWNSHIP
39
CONNOQUENESSING TWP
39 CRANBERRY TOWNSHIP
39 FAIRVIEW TOWNSHIP
39
FORWARD TOWNSHIP
39
FRANKLIN TOWNSHIP
39
JEFFERSON TOWNSHIP
39
LANCASTER TOWNSHIP
39
MARION TOWNSHIP
59
MERCER TOWNSHIP
59
MIDDLESEX TOWNSHIP
59
MUDDYCREEK TOWNSHIP
59
OAKLANO TOWNSHIP
59
PARKER TOWNSHIP
59
PENN TOWNSHIP
59
SUMMIT TOWNSHIP
39
VENANGO TOWNSHIP
39
WASHINGTON TOWNSHIP
39
WINFIELD TOWNSHIP
39
WORTH TOWNSHIP
39
ADAMS TOWNSHIP
39
ALLEGHENY TOWNSHIP
39
8ARR TOWNSHIP
39
CAMBRIA TCWNSHIP
39
CLEARFIELD TOWNSHIP
39
CONEMAUGH TOWNSHIP
39
CRESSON TOWNSHIP
39
CROYLE TOWNSHIP
39
DEAN TOWNSHIP
39
EAST CARROLL TOWNSHIP
39
EAST TAYLOR TWONSHIP
39
ELOER TOWNSHIP
39
GALLITZIN TOWNSHIP
39
LOWER YODER TOWNSHIP
59
MIDDLE TAYLOR TOWNSHIP
59
MUNSTER TOWNSHIP
59
PORTAGE TOWNSHIP
59
STONYCREEK TOWNSHIP
59
SUMMERHILL TOWNSHIP
59
SUSQUEHANNA TOWNSHIP
59
UPPER YODER TOWNSHIP
59
WASHINGTON TOWNSHIP
59
WEST CARROLL TOWNSHIP
TREASURY
05/2 3/78 AT 31:25
U.S. DEPARTMENT
OF THE
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
S9 WEST TAYLOR TOWNSHIP
39
WHITE TOWNSHIP
39
GIBSON TOWNSHIP
39
GROVE TOWNSHIP
39
LUMBER TOWNSHIP
39
PORTAGE TOWNSHIP
39
SHIPPEN TOWNSHIP
39
BANKS TOWNSHIP
39
LAUSANNE TOWNSHIP
39
LEHIGH TOWNSHIP
39
COLLEGE TOWNSHIP
39
HAINES TOWNSHIP
39
LIBERTY TOWNSHIP
39
PENN TOWNSHIP
39
RUSH TOWNSHIP
39
SNOW SHOE TOWNSHIP
39
SPRING TOWNSHIP
39
WORTH TOWNSHIP
39
EAST BRANDYWINE TOWNSHIP
39
EAST VINCENT TOWNSHIP
39
EAST WHITELAND TOWNSHIP
39
NEWLIN TOWNSHIP
39
PCCOPSON TOWNSHIP
39
UPPER OXFORD TOWNSHIP
39
WEST NANTMEAL TOWNSHIP
39
WEST SADSBURY TOWNSHIP
39
BECCARIA TOWNSHIP
39
BELL TOWNSHIP
39
BIGLER TOWNSHIP
39
BCGGS TOWNSHIP
39
8RADF0R0 TOWNSHIP
39
BRADY TOWNSHIP
39
BURNSIDE TOWNSHIP
39
CHEST TOWNSHIP
39
COOPER TOWNSHIP
39
DECATUR TOWNSHIP
39
FERGUSON TOWNSHIP
59
GIRARD TOWNSHIP
59
GOSHEN TOWNSHIP
59
GRAHAM TOWNSHIP
59
GREENWOOD TOWNSHIP
59
GULICH TOWNSHIP
39
JORDAN TOWNSHIP
39
KARTHAUS TOWNSHIP
39
KNOX TOWNSHIP
39
LAWRENCE TOWNSHIP
TREASURY
PAGE238
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. DEPARTMENT
DISTRESSED
AREA
(ELIGIBLE
STATE
59
59
59
59
59
59
59
59
59
59
59
59
39
59
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
59
59
59
39
39
39
39
39
39
39
39
39
PAGE259
OF THE
TREASURY
ELIGIBILITY
GOVERNMENTS)
TITLE
MORRIS TOWNSHIP
PENN TCWNSHIP
PIKE T O W N S H I P
SANDY TOWNSHIP
U N I O N TOWNSHIP
WOODWARD T O W N S H I P
PINE T O W N S H I P
ALLISON T O W N S H I P
BALD EAGLE T O W N S H I P
BEECH CREEK TOWNSHIP
CASTANEA T O W N S H I P
CHAPMAN T O W N S H I P
CCLEBROOK T O W N S H I P
CRAWFORD T O W N S H I P
OUNNSTABLE TOWNSHIP
EAST KEATING T O W N S H I P
GALLAGHER TOWNSHIP
G R E E N E TOWNSHIP
GRUGAN T O W N S H I P
LAMAR TOWNSHIP
LEIDY TCWNSHIP
LOGAN TOWNSHIP
N C Y E S TCWNSHIP
PINE CREEK T O W N S H I P
PORTER TOWNSHIP
WAYNE TCWNSHIP
WEST KEATING T O W N S H I P
WCODWARC T O W N S H I P
BEAVER TOWNSHIP
BENTON TOWNSHIP
BRIAR CREEK TOWNSHIP
CATAWISSA T O W N S H I P
CLEVELAND TOWNSHIP
CCNYNGHAM T O W N S H I P
F I S H I N G CREEK TWP
FRANKLIN TOWNSHIP
GREENWOOD TOWNSHIP
HEMLOCK T O W N S H I P
JACKSON TOWNSHIP
LOCUST TOWNSHIP
MADISON T O W N S H I P
MAIN TOWNSHIP
MIFFLIN T O W N S H I P
MOUNT PLEASANT T O W N S H I P
ORANGE TOWNSHIP
PINE TOWNSHIP
TEIST
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE2*0
OF THE
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 RCARINGCREEK TOWNSHIP
59
SCOTT TOWNSHIP
59
SUGARLOAF TOWNSHIP
59
NCRTH CENTER TOWNSHIP
59
SCUTH CENTER TOWNSHIP
59
ATHENS TOWNSHIP
59
BEAVER TOWNSHIP
59
BLOOMFIELO TOWNSHIP
59
CAMBRIDGE TOWNSHIP
59
CCNNEAUT TOWNSHIP
59
CUSSEWAGO TOWNSHIP
59
EAST FAIRFIELD TOWNSHIP
59
EAST FALLOWFIELD TWP
59
EAST MEAD TOWNSHIP
59
FAIRFIELD TOWNSHIP
59
GREENWOOD TOWNSHIP
59
HAYFIELO TOWNSHIP
59
NORTH SHEN4NG0 TWP
59
OIL CREEK TOWNSHIP
59
PINE TOWNSHIP
59
RANDOLPH TOWNSHIP
39
RICHMOND TOWNSHIP
39
ROME TOWNSHIP
39
SADSBURY TOWNSHIP
39
SPARTA TOWNSHIP
39
SPRING TOWNSHIP
39
STEUBEN TOWNSHIP
39
SUMMERHILL TOWNSHIP
39
SUMMIT TOWNSHIP
59
TROY TOWNSHIP
59
UNION TOWNSHIP
39
VENANGO TOWNSHIP
39
VERNON TOWNSHIP
39
WAYNE TOWNSHIP
39
WEST FALLOWFIELD TWP
39
WEST MEAD TOWNSHIP
39
WEST SHENANGO TOWNSHIP
39
WOODCOCK TOWNSHIP
39
MIFFLIN TOWNSHIP
39
RUSH TOWNSHIP
39
WICONISCO TOWNSHIP
39
WILLIAMS TOWNSHIP
39
ASTON TOWNSHIP
39
CHESTER TOWNSHIP
59
DARBY TOWNSHIP
59
LOWER CHICHESTER TWP
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 MARPLE TOWNSHIP
39
MIDDLETOWN TOWNSHIP
39
NEWTOWN TOWNSHIP
39
RIDLEY TOWNSHIP
39
TINICUM TOWNSHIP
39
UPPER CHICHESTER TWP
39
UPPER DARBY TCWNSHIP
39
BENEZETTE TOWNSHIP
39
BENZINGER TOWNSHIP
59
FOX TOWNSHIP
59
HIGHLAND TOWNSHIP
59
HORTON TOWNSHIP
59
JAY TOWNSHIP
39
JONES TOWNSHIP
39
MILLSTONE TOWNSHIP
39
R.IOGWAY TOWNSHIP
39
SPRING CREEK TOWNSHIP
39
AHITY TOWNSHIP
39
CCNCORO TCWNSHIP
39
CCNNEAUT TOWNSHIP
39
ELK CREE< TOWNSHIP
39
GIRARD TOWNSHIP
39
GREENE TOWNSHIP
39
GREENFIELD TOWNSHIP
39
LAWRENCE PARK TOWNSHIP
39
LE BOEUF TOWNSHIP
39
MCKEAN TOWNSHIP
39
NCRTH EAST TOWNSHIP
39
SPRINGFIELD TOWNSHIP
39
SUMMIT TOWNSHIP
39
UNION TOWNSHIP
39
VENANGO TOWNSHIP
39
WASHINGTON TOWNSHIP
39
WATERFORD TOWNSHIP
39
WAYNE TOWNSHIP
39
BROWNSVILLE TOWNSHIP
39
BULLSKIN TOWNSHIP
39
CONNELLSVILLE TOWNSHIP
39
DUNBAR TOWNSHIP
39
FRANKLIN TOWNSHIP
39
GEORGES TOWNSHIP
39
GERMAN TOWNSHIP
39
HENRY CLAY TOWNSHIP
39
JEFFERSON TOWNSHIP
39
LOWER TYRONE TOWNSHIP
39
LUZERNE TOWNSHIP
PAGE241
TREASURY
05/23/78
AT
3
u#
s
;S^pARTMENT
0F
THE
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 MENALLEN TOWNSHIP
39
NICHOLSON TOWNSHIP
39
NORTH UNION TOWNSHIP
39
PERRY TOWNSHIP
39
REDSTONE TOWNSHIP
59 SALTLICK TOWNSHIP
59 SOUTH UNION TOWNSHIP
39
SPRINGFIELD TOWNSHIP
39
SPRINGHILL TOWNSHIP
39
STEWART TOWNSHIP
39
UPPER TYRONE TOWNSHIP
39 WASHINGTON TOWNSHIP
39
WHARTCN TOWNSHIP
39 GREEN TOWNSHIP
39 HARMONY TOWNSHIP
39
HOWE TOWNSHIP
3 9 JENKS TOWNSHIP
39
KINGSLEY TOWNSHIP
39
TIONESTA TOWNSHIP
39
QUINCY TOWNSHIP
39 WARREN TOWNSHIP
39
AYR TCWNSHIP
39
BELFAST TOWNSHIP
39
3ETHEL TOWNSHIP
39
BRUSH CREEK TOWNSHIP
39
DUBLIN TOWNSHIP
39
LICKING CREEK TOWNSHIP
39
TAYLOR TOWNSHIP
39
THOMPSON TOWNSHIP
39
TODD TOWNSHIP
39 WELLS TOWNSHIP
59
ALEPPO TOWNSHIP
59
CENTER TOWNSHIP
59
CUMBERLAND TOWNSHIP
39
OUNKARD TOWNSHIP
39 FRANKLIN TOWNSHIP
39 FREEPORT TOWNSHIP
39
GILMORE TOWNSHIP
39 GRAY TGWNSHIP
39
GREENE TOWNSHIP
39
JACKSON TOWNSHIP
39
JEFFERSON TOWNSHIP
39
MONONGAHELX TOWNSHIP
39
MORGAN TOWNSHIP
39
MORRIS TOWNSHIP
39
PERRY TOWNSHIP
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE
DISTRESSED AREA ELIGIBILITY TE«ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 RICHHILL TOWNSHIP
39
SPRINGHILL TOWNSHIP
39
WASHINGTON TOWNSHIP
39
WAYNE TOWNSHIP
39
WHITELEY TOWNSHIP
39
BARREE TOWNSHIP
39
BRAOY TOWNSHIP
39
CARBON TOWNSHIP
59
CASS TOWNSHIP
59
CLAY TOWNSHIP
39
CROMWELL TOWNSHIP
39
DUBLIN TOWNSHIP
39
FRANKLIN TOWNSHIP
39
HENDERSON TOWNSHIP
59
HOPEWELL TOWNSHIP
59
JACKSON TOWNSHIP
59
JUNIATA TOWNSHIP
59
LINCOLN TOWNSHIP
59
LOGAN TOWNSHIP
59
MILLER TOWNSHIP
59
MORRIS TCWNSHIP
59
ONEIDA TOWNSHIP
59
PENN TOWNSHIP
59
PORTER TOWNSHIP
59
SHIRLEY TOWNSHIP
59
SMITHFIELD TOWNSHIP
59
SPRINGFIELD TOWNSHIP
39
SPRUCE CREEK TOWNSHIP
39
TELL TOWNSHIP
39
TOD TOWNSHIP
39
UNION TOWNSHIP
39
WALKER TOWNSHIP
39
WARRIORS MARK TWP
59
WEST TOWNSHIP
59
WOOD TOWNSHIP
59
BEALE TOWNSHIP
59
DELAWARE TOWNSHIP
59 FAYETTE TOWNSHIP
59
FERMANAGH TOWNSHIP
59
GREENWOOD TOWNSHIP
59
LACK TOWNSHIP
59
MILFORD TOWNSHIP
59
MONROE TOWNSHIP
59
SPRUCE HILL 'TOWNSHIP
59
SUSQUEHANNA TOWNSHIP
39
TURBETT TOWNSHIP
PAGE243
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE2<»4
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 TUSCARORA TOWNSHIP
39
WALKER TOWNSHIP
39
ABINGTON TOWNSHIP
39
BENTON TOWNSHIP
39
CARBONDALE TOWNSHIP
39
CLIFTON TOWNSHIP
39
COVINGTON TOWNSHIP
39
ELMHURST TOWNSHIP
39
FELL TOWNSHIP
39
GLENBURN TOWNSHIP
39
GREENFIELD TOWNSHIP
39
JEFFERSON TOWNSHIP
39
LA PLUME TOWNSHIP
39
LEHIGH TOWNSHIP
39
MAOISON TOWNSHIP
39
NEWTON TOWNSHIP
39
NCRTH ABINGTON TOWNSHIP
39
RANSOM TOWNSHIP
39
RCARING BROOK TOWNSHIP
39
SCOTT TOWNSHIP
39
SOUTH ABINGTON TOWNSHIP
39
SPRING BROOK TOWNSHIP
39
WEST ABINGTON TOWNSHIP
39
EARL TOWNSHIP
39
EPHRATA TOWNSHIP
39
LEACOCK TCWNSHIP
39
MANOR TOWNSHIP
39
PARADISE TOWNSHIP
39
PENN TOWNSHIP
39
WEST EARL TOWNSHIP
39
WEST HEMPFIELD TOWNSHIP
39
WEST LAMPETER TOWNSHIP
39
HICKORY TOWNSHIP
39
LITTLE BEAVER TOWNSHIP
39
MAHONING TOWNSHIP
39
NESHANNOCK TOWNSHIP
39
PERRY TOWNSHIP
39
PLAIN GROVE TOWNSHIP
39
PULASKI TOWNSHIP
39
SCOTT TOWNSHIP
39
SHENANGO TOWNSHIP
59
SLIPPERY ROCK TOWNSHIP
59
TAYLOR TOWNSHIP
59
UNICN TOWNSHIP
59
WASHINGTON TOWNSHIP
*Q
WAYNE TOWNSHIP
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE245
OF THE
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 WILMINGTON TOWNSHIP
39
BLACK CREEK TOWNSHIP
39
BUTLER TOWNSHIP
39
CONYNGHAM TOWNSHIP
39
DENNISON TOWNSHIP
39
DORRANCE TOWNSHIP
39
EXETER TOWNSHIP^
39
FAIRMONT TOWNSHIP
39
FAIRVIEW TOWNSHIP
39
FOSTER TOWNSHIP
39
FRANKLIN TOWNSHIP
39
HANOVER TOWNSHIP
39
HAZLE TOWNSHIP
39
HOLLENBACK TOWNSHIP
39
HUNTINGTON TOWNSHIP
39
JACKSON TOWNSHIP
39
JENKINS TOWNSHIP
39
KINGSTON TOWNSHIP
39
LAKE TOWNSHIP
39
NESCOPECK TOWNSHIP
39
NEWPORT TOWNSHIP
39
PITTSTON TOWNSHIP
39
PLAINS TOWNSHIP
39
PLYMOUTH TOWNSHIP
39
RCSS TOWNSHIP
39
SLOCUM TOWNSHIP
39
UNION TOWNSHIP
39
WILKES B4RRE TOWNSHIP
39
WRIGHT TOWNSHIP
39
ANTHONY TOWNSHIP
39
ARMSTRONG TOWNSHIP
39
BASTRESS TOWNSHIP
39
BRADY TOWNSHIP
39
BROWN TOWNSHIP
39
CASAOE TOWNSHIP
39
CLINTON TOWNSHIP
39
COGAN HOUSE TOWNSHIP
39
CUMMINGS TOWNSHIP
39
ELDRED TOWNSHIP
39
FRANKLIN TOWNSHIP
39 GAMBLE TOWNSHIP
39
HEPBURN TOWNSHIP
39
JACKSON TOWNSHIP
39
JORDAN TOWNSHIP
39
LEWIS TOWNSHIP
39
LIMESTONE TOIWNSHIP
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE24G
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
39
39
39
39
39
39
39
39
39
39
39
39
39
59
59
39
39
59
59
59
59
59
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
59
59
59
59
59
TITLE
LOYALSOCK TOWNSHIP
LYCOMING TOWNSHIP
MCHENRY TOWNSHIP
MCINTYRE TOWNSHIP
MCNETT TOWNSHIP
MIFFLIN TOWNSHIP
MILL CREEK TOWNSHIP
MORELAND TOWNSHIP
MUNCY CREEK TOWNSHIP
NIPPENOSE TOWNSHIP
OLD LYCOMING TOWNSHIP
PENN TOWNSHIP
PIATT TOWNSHIP
PINE TCWNSHIP
PLUNKETTS CREEK TOWNSHIP
PORTER TOWNSHIP
SHREWSBURY TOWNSHIP
SUSQUEHANNA TOWNSHIP
UPPER FAIRFIELD TOWNSHIP
WASHINGTON TOWNSHIP
WATSON TOWNSHIP
WOLF TOWNSHIP
WOODWARD TOWNSHIP
ANNIN TOWNSHIP
BRADFORD TOWNSHIP
CERES TOWNSHIP
CCRYOON TOWNSHIP
ELDRED TOWNSHIP
FOSTER TOWNSHIP
HAMILTON TOWNSHIP
HAMLIN TOWNSHIP
KEATING TOWNSHIP
LAFAYETTE TOWNSHIP
LIBERTY TOWNSHIP
NORWICH TOWNSHIP
OTTO TOWNSHIP
SERGEANT TOWNSHIP
WETMORE TOWNSHIP
CCOLSPRING TOWNSHIP
DEER CREEK TOWNSHIP
DELAWARE TOWNSHIP
FAIRVIEW TOWNSHIP
FINDLEY TOWNSHIP
FRENCH CREEK TOWNSHIP
GREENE TOWNSHIP
HEMPFIELD TOWNSHIP
TREASURY
05/25/78 AT 31:25
U.S. DEPARTMENT
PAGE2d7
OF THE
TREASURY
DISTRESSED AREA ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE
59
39
39
39
39
39
39
59
59
59
59
39
39
39
39
39
39
59
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
TITLE
HERMITAGE TWP
JACKSON TOWNSHIP
JEFFERSON TOWNSHIP
LACKAWANNOCK TOWNSHIP
LAKE TOWNSHIP
MILL CREEK TOWNSHIP
NEW VERNON TOWNSHIP
OTTER CREEK TCWNSHIP
PERRY TOWNSHIP
PINE TOWNSHIP
PYMATUNING TOWNSHIP
SALEM TOWNSHIP
SANDY CREEK TOWNSHIP
SANDY LAKE TOWNSHIP
SHENANGO TOWNSHIP
SOUTH PYMATUNING TWP
SPRINGFIELO TOWNSHIP
SUGAR GROVE TOWNSHIP
WEST SALEM TOWNSHIP
WILMINGTON TOWNSHIP
WOLF CREEK TOWNSHIP
WORTH TOWNSHIP
ARMAGH TOWNSHIP
3RATT0N TOWNSHIP
BROWN TOWNSHIP
DECATUR TOWNSHIP
DERRY TOWNSHIP
GRANVILLE TOWNSHIP
MENNO TOWNSHIP
OLIVER TOWNSHIP
UNION TOWNSHIP
WAYNE TOWNSHIP
BARRETT TOWNSHIP
CHESTNUTHILL TOWNSHIP
COOLBAUGH TOWNSHIP
ELDRED TOWNSHIP
HAMILTON TOWNSHIP
JACKSON TOWNSHIP
MIODLE SMITHFIELD TWP
PARADISE TOWNSHIP
PCCONO TOWNSHIP
POLK TOWNSHIP
PRICE TOWNSHIP
ROSS TOWNSHIP
SMITHFIELO TOWNSHIP
STROUD TOWNSHIP
TEST
05/2 3/78 AT 31:25
U.S. DEPARTMENT
OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 TCBYHANNA TOWNSHIP
39
TUNKHANNCCK TOWNSHIP
39
ABINGTON TOWNSHIP
39
EAST NORRITON TOWNSHIP
39
FRANCONIA TOWNSHIP
39
HATFIELD TOWNSHIP
39
LIMERICK TOWNSHIP
39
LOWER FREDERICK TWP
39
MONTGOMERY TOWNSHIP
39
NEW HANOVER TOWNSHIP
39
PERKIOMEN TOWNSHIP
39
PLYMOUTH TOWNSHIP
39
SALFORO TOWNSHIP
39
SKIPPACK TOWNSHIP
39
SPRINGFIELD TOWNSHIP
39
TCWAMENCIN TOWNSHIP
39
UPPER 0U3LIN TOWNSHIP
39
UPPER FREDERICK TWP
39
UPPER GWYNEDO TOWNSHIP
39
UPPER HANOVER TOWNSHIP
39
UPPER MGRELA<ND TOWNSHIP
39
UPPER POTTSGROVE TWP
39
UPPER PROVIDENCE TWP
39
UPPER SALFORD TOWNSHIP
59
WEST NORRITON TOWNSHIP
39
WEST POTTSGROVE TWP
39
WHITEMARSH TOWNSHIP
39
WORCESTER TOWNSHIP
39
MAHONING TOWNSHIP
39
LCWER MT BETHEL TWP
39
PLAINFIELD TOWNSHIP
39
WILLIAMS TOWNSHIP
59
COAL TOWNSHIP
59
DELAWARE TOWNSHIP
39
EAST CAMERON TOWNSHIP
39
JACKSON TOWNSHIP
39
JORDAN TOWNSHIP
39
LEWIS TOWNSHIP
39
LITTLE MAHANOY TOWNSHIP
39
LOWER AUGUSTA TOWNSHIP
39
LCWER MAHANOY TOWNSHIP
39
MOUNT CARMEL TOWNSHIP
39
POINT TOWNSHIP
39
RALPHO TOWNSHIP
39
ROCKEFELLER TOWNSHIP
39
RUSH TOWNSHIP
P
*GE2*8
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE
PAGE249
TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE
STATE
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
59
59
59
59
59
39
59
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
39
GOVERNMENTS)
TITLE
SHAMCKIN TOWNSHIP
TURBUT TOWNSHIP
UPPER AUGUSTA TOWNSHIP
UPPER MAHANOY TOWNSHIP
WASHINGTON TOWNSHIP
WEST CAMERON TOWNSHIP
WEST CHILLISQUAOUE TWP
ZERBE TOWNSHIP
LEHMAN TOWNSHIP
ABBOTT TOWNSHIP
ALLEGANY TOWNSHIP
BINGHAM TOWNSHIP
CLARA TOWNSHIP
EULALIA TOWNSHIP
GENESEE TOWNSHIP
HARRISON TOWNSHIP
HEBRON TOWNSHIP
HECTOR TOWNSHIP
HOMER TOWNSHIP
KEATING TOWNSHIP
OSWAYO TOWNSHIP
PIKE TOWNSHIP
PLEASANT VALLEY TOWNSHIP
PORTAGE TOWNSHIP
RCULETTE TOWNSHI P
SHARON TOWNSHIP
STEWARDSON TOWNS HIP
SUMMIT TOWNSHIP
SWEDEN TOWNSHIP
SYLVAMIA TOWNSHI P
ULYSSES TOWNSHIP
WEST BRANCH TCWN SHIP
WHARTON TOWNSHIP
BARRY TOWNSHIP
BLYTHE TOWNSHIP
BRANCH TOWNSHIP
BUTLER TOWNSHIP
CASS TOWNSHIP
OELANO TOWNSHIP
EAST BRUNSWICK TOWNSHIP
EAST NORWEGIAN TOWNSHIP
EAST UNION TOWNSHIP
ELDREO TOWNSHIP
FOSTER TOWNSHIP
FRAILEY TOWNSHIP
HEGINS TOWNSHIP
05/23/?e « » • « „ , , „ « „
0F
,„ E
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 HUBLEY TOWNSHIP
39
KLINE TCWNSHIP
39
MAHANOY TOWNSHIP
39
NEW CASTLE T O W N S H I P
39
NCRTH MANHEIM T O W N S H I P
39
NCRTH UNION TOWNSHIP
39
NORWEGIAN T O W N S H I P
39
PINE GROVE TWP
39
PORTER TOWNSHIP
39
REILLY TOWNSHIP
39
RYAN TOWNSHIP
39
SCHUYLKILL T O W N S H I P
39
TREMONT TOWNSHIP
39
UNION TOWNSHIP
39
UPPER MAHANTONGO T O W N S H I P
39
WASHINGTON T O W N S H I P
39
WAYNE TOWNSHIP
39
WEST BRUNSWICK T O W N S H I P
39
WEST MAHANOY T O W N S H I P
39
WEST PENN T O W N S H I P
39
BEAVER TOWNSHIP
39
JACKSON TOWNSHIP
39
PENN TOWNSHIP
39
ADOISON T O W N S H I P
39
ALLEGHENY T O W N S H I P
39
BROTHERSVALLEY TOWNSHIP
39
CONEMAUGH T O W N S H I P
39
ELK LICK T O W N S H I P
39
FAIRHOPE T O W N S H I P
39
GREENVILLE T O W N S H I P
39
JEFFERSON T O W N S H I P
39
JENNER TOWNSHIP
39
LARIMER T O W N S H I P
39
LOWER TURKEYFOOT TWP
39
NORTHAMPTON TOWNSHIP
39
PAINT TOWNSHIP
39
SHADE TOWNSHIP
39
SOMERSET T O W N S H I P
39
SOUTHAMPTON TOWNSHIP
39
SUMMIT TOWNSHIP
39
CHERRY TOWNSHIP
39
CCLLEY TOWNSHIP
39
DAVIOSON T O W N S H I P
39
ELKLAND T O W N S H I P
39
F O R K S TCWNSHIP
39
FOX TOWNSHIP
tRE ,suRr
P,CE
"°
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 HILLSGROVE TOWNSHIP
39
LAPORTE TOWNSHIP
39
SHREWSBURY TOWNSHIP
39
8L0SS TOWNSHIP
39
BROOKFIELD TOWNSHIP
39
CHARLESTON TOWNSHIP
39
CHATHAM TOWNSHIP
39
CLYMER TOWNSHIP
39
COVINGTON TOWNSHIP
39
0EERFIEL3 TOWNSHIP
39
DELMAR TCWNSHIP
39
DUNCAN TOWNSHIP
39
ELK TOWNSHIP
39
ELKLANO TOWNSHIP
39
FARMINGTON TOWNSHIP
39
GAINES TOWNSHIP
39
HAMILTON TOWNSHIP
39
JACKSON TOWNSHIP
39
LAWRENCE TOWNSHIP
39
LIBERTY TOWNSHIP
39
MIDDLEBURY TOWNSHIP
39
MORRIS TCWNSHIP
59
NELSON TOWNSHIP
59
OSCEOLA TOWNSHIP
59
PUTNAM TOWNSHIP
59
RICHMOND TOWNSHIP
59
RUTLAND TOWNSHIP
59
SHIPPEN TOWNSHIP
59
SULLIVAN TOWNSHIP
59
TIOGA TOWNSHIP
59
UNION TOWNSHIP
59
WARD TOWNSHIP
59
WESTFIELD TOWNSHIP
39
KELLY TOWNSHIP
39
CANAL TOWNSHIP
39
CHERRYTREE TOWNSHIP
39
CLINTON TOWNSHIP
39
CORNPLANTER TOWNSHIP
39
CRANBERRY TOWNSHIP
39
IRWIN TOWNSHIP
39
JACKSON TOWNSHIP
59
MINERAL TOWNSHIP
59
OILCREEK TOWNSHIP
39
PINEGROVE TOWNSHIP
59
PLUM TOWNSHIP
59
PRESIDENT TOWNSHIP
PAGE251
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGL252
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 RICHLAND TOWNSHIP
39
ROCKLAND TOWNSHIP
39
VICTORY TOWNSHIP
59
CHERRY GROVE TOWNSHIP
59
COLUMBUS TOWNSHIP
39
CCNEWANGO TOWNSHIP
39
ELK TOWNSHIP
39
GLAOE TOWNSHIP
39
MEAD TOWNSHIP
39
PLEASANT TOWNSHIP
39
SHEFFIELD TOWNSHIP
39
SCUTHWEST TOWNSHIP
39
SPRING CREEK TOWNSHIP
39
SUGAR GROVE TOWNSHIP
59
TRIUMPH TOWNSHIP
59
WATSON TOWNSHIP
59
CANTON TOWNSHIP
59
CECIL TOWNSHIP
59
CROSS CREEK TOWNSHIP
59
EAST BETHLEHEM TOWNSHIP
59
EAST FINLEY TCWNSHIP
59
FALLOWFIELD TOWNSHIP
59
INDEPENDENCE TOWNSHIP
59
MCUNT PLEASANT TOWNSHIP
59
NORTH FRANKLIN TOWNSHIP
59
SMITH TOWNSHIP
59
BERLIN TOWNSHIP
59
BUCKINGHAM TCWNSHIP
59
CANAAN TOWNSHIP
59
CHERRY RIDGE TOWNSHIP
59
CLINTON TOWNSHIP
39
DAMASCUS TOWNSHIP
39
DREHER TOWNSHIP
39
DYBERRY TOWNSHIP
39
LAKE TOWNSHIP
39
LEBANON TOWNSHIP
39
MANCHESTER TOWNSHIP
39
MCUNT PLEASANT TOWNSHIP
39
PAUPACK TOWNSHIP
39
PPESTON TOWNSHIP
39
SALEM TOWNSHIP
39
SCOTT TOWNSHIP
39
SOUTH CANAAN TOWNSHIP
39
STERLING TOWNSHIP
39
TEXAS TOWNSHIP
39
ALLEGHENY TOWNSHIP
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE253
OF THE
TREASURY
DISTRESSED AREA ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE TITLE
39 BELL TOWNSHIP
39
COOK TOWNSHIP
39
DERRY TOWNSHIP
39
OONEGAL TOWNSHIP
39
EAST HUNTINGDON TOWNSHIP
39
FAIRFIEL3 TOWNSHIP
39
LIGONIER TOWNSHIP
39
LCYALHANNA TOWNSHIP
39
MOUNT PLEASANT TOWNSHIP
59
PENN TOWNSHIP
59
RCSTRAVER TOWNSHIP
59
ST CLAIR TOWNSHIP
59
SALEM TOWNSHIP
59
SEWICKLEY TOWNSHIP
59
SOUTH HUNTINGDON TWP
59
UNITY TOWNSHIP
59
UPPER 8URRELL TOWNSHIP
59
WASHINGTON TOWNSHIP
59
BRAINTRIM TOWNSHIP
39
CLINTON TCWNSHIP
39
EATCN TCWNSHIP
39
EXETER TOWNSHIP
39
FALLS TOWNSHIP
39
FORKSTON TOWNSHIP
39
LEMON TOWNSHIP
39
MEHOOPANY TOWNSHIP
39
MESHOPPEN TOWNSHIP
39
MONROE TOWNSHIP
39
NICHOLSON TOWNSHIP
39
NORTH BRANCH TOWNSHIP,
39
NCRTHMORELAND TOWNSHIP
39
NCXEN TOWNSHIP
39
OVERFIELD TOWNSHIP
39
TUNKHANNOCK TOWNSHIP
59
WASHINGTON TOWNSHIP
59
WINDHAM TOWNSHIP
59
CCNEWAGO TOWNSHIP
39
EAST HOPEWELL TOWNSHIP
39
WEST MANCHESTER TOWNSHIP
STATE = 39: 1649 RECORDS
TEST
05/23/78 AT 31:25
U.S. DEPARTMENT
DISTRESSED AREA
(ELIGIBLE GOVERNMENTS)
STATE TITLE
40 WARWICK CITY
40
CENTRAL FALLS CITY
40
CPANSTON CITY
40
PAWTUCKET CITY
40
PROVIDENCE CITY
40
WCONSOCKET CITY
40
EAST PROVIDENCE CITY
40
BARRINGTON TOWN
40
BRISTOL TOWN
40
WARREN TOWN
40
COVENTRY TOWN
40
WEST GREENWICH TOWN
40
WEST WARWICK TOWN
40
BURRILLVILLE; TOWN
4C
CUMBERLAND TOWN
40
GLOCESTER TOWN
40
JGHNSTON TOWN
40
NCRTH PROVIDENCE TOWN
40
NCRTH SMITHFIELD TOWN
40
SMITHFIELD TOWN
40
EXETER TOWN
kO
NCRTH KINGSTOWN TOWN
40
SOUTH KINGSTOWN TOWN
40
NEW SHOREHAM TOWN
STATE = 40: 24 RECORDS
OF THE
TREASURY
ELIGIBILITY
TEST
PAGE254
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
ABBEVILLE COUNTY
ALLENDALE COUNTY
BAMBERG COUNTY
BARNWELL C O U N T Y
CHESTER COUNTY
CHESTERFIELD COUNTY
CLARENDON COUNTY
COLLETON COUNTY
DARLINGTON C O U N T Y
DILLON COUNTY
F A I R F I E L D COUNTY
GEORGETOWN C O U N T Y
JASPER COUNTY
KERSHAW COUNTY
LANCASTER COUNTY
L A U R E N S COUNTY
LEE COUNTY
MCCORMICK COUNTY
MARLBORO C O U N T Y
NEWBERRY C O U N T Y
OCONEE COUNTY
SALUDA COUNTY
SUMTER COUNTY
UNION COUNTY
ABBEVILLE CITY
CALHOUN F A L L S TOWN
OONALDS TOWN
OUE WEST TOWN
LOWNDESVILLE' TOWN
NEW ELLENTON TOWN
WAGENER TOWN
ALLENDALE TOWN
FAIRFAX TOWN
SYCAMORE TOWN
ULMER TOWN
ANDERSON CITY
BELTON CITY
IVA TCWN
WEST PELZER TCWN
BAMBERG TOWN
DENMARK CITY
GOVAN TOWN
OLAR TOWN
BLACKVILLE TOWN
ELKO TOWN
HILDA TOWN
PAGE255
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE25G
OF THE
DISTRESSED AREA ELIGIBILITY TE«ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
41 KLINE TOWN
41
SNELLING TOWN
41
ST STEPHEN TOWN
41
JAMESTOWN TOWN
41
CHESTER CITY
41
FCRT LAWN TOWN
41
LOWRYS TOWN
41
RICHBURG TOWN
41
GREAT FALLS TOWN
41
CHERAW TOWN
41
CHESTERFIELD TOWN
41
JEFFERSON TOWN
41
MCBEE TOWN
41
MOUNT CROGHAN TOWN
41
PAGELANO TOWN
41
PATRICK TOWN
41
RUBY TOWN
41
COTTAGEVILLE TOWN
41
LCDGE TOWN
41
SMOAKS TOWN
41
WALTERBORO TOWN
41
WILLIAMS TOWN
41
EDISTC BEACH TOWN
41
DARLINGTON CITY
41
HARTSVILLE CITY
41
LAMAR CITY
41
SOCIETY HILL TOWN
41
DILLON CITY
41
LAKEVIEW TOWN
41
LATTA TCWN
41
RIDGEWAY TOWN
41
WINNSBORO TOWN
41
LAKE CITY TOWN
41
TIMMONSVILLE; TOWN
41
FURMAN TOWN
41
LURAY TOWN
41
YEMASSEE TOWN
41
GIFFORD TOWN
41
RIDGELAND TOWN
41
BETHUNE TOWN
41
CAMDEN CITY
41
HEATH SPRINGS TOWN
41
CLINTON CITY
41
CROSS HILL TOWN
«U
GRAY COURT TOWN
41
LAURENS CITY
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
OISTRESSEO
STATE TITLE
41 WATERLOO TOWN
41
BISHOPVILLE TOWN
41
LYNCHBURG TOWN
41
MCCORMICK TOWN
41
MOUNT CARMEL TOWN
41
PARKSVILLE TOWN
41
PLUM BRANCH TOWN
41
BENNETTSVILLE CITY
41
BLENHEIM TOWN
41
CLIO TOWN
41
MCCOLL TOWN
41
TATUM TOWN
41
LITTLE MOUNTAIN TOWN
41
PEAK TOWN
41
POMARIA TOWN
41
SENECA TOWN
41
WALHALLA TOWN
41
WESTMINSTER TOWN
41
WEST UNION TOWN
41
BRANCHVILLE
TOWN
41
NORWAY TOWN
41
RCWESVILLE TOWN
41
SANTEE TOWN
41
RIDGE SPRING TOWN
41
SALUDA TOWN
41
WARDS TOWN
41
MAYESVILLE TOWN
41
PINEWOOD TOWN
41
CARLISLE TOWN
41
UNION CITY
41
ROCK HILL CITY
41
YORK TOWN
266-274 O - 78 - 21
OF THE
TREASURY
AREA ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE = 41: 124 RECORDS
PAGE257
TEST
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE258
OF THE
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
42 BUTTE COUNTY
42
CORSON COUNTY
42
HARDING COUNTY
42
HYDE COUNTY
42
WALWORTH COUNTY
42
WASHABAUGH COUNTY
42
ZIEBACH COUNTY
42
VIRGIL TOWN
42 FRUITDALE TOWN
42
NISLAND TOWN
42
MOUND CITY TOWN
42
PCLLOCK TOWN
42
HENRY TOWN
42
WALLACE TOWN
42
MCINTOSH CITY
42
MCLAUGHLIN CITY
42
MGRRISTOWN TOWN
42
GRENVILLE TOWN
42
LOYALTON TOWN
42
ONAKA TOWN
42
ORIENT TOWN
STATE = 42: 21 RECORDS
TREASURY
05/23/78 AT 01:25
U.S. DEPARTMENT OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
42 BUFFALO TOWN
STATE = 42: 1 RECOROS
PAGE259
05/2 3/78 AT 31:25
U.S. DEPARTMENT
PAGE260
OF THE
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
42
kZ
42
42
42
42
42
42
42
42
TITLE
BELVIDERE TOWN
HILLSVIEW TOWN
WETONKA TOWN
EGAN CITY
WARD TOWN
WHITE ROCK TOWN
AGAR TOWN
GLENHAM TOWN
JAVA CITY
LCWRY TOWN
M08RIDGE CITY
LESTERVILLE TOWN
DUPREE TOWN
BRISTOL TOWNSHIP
CRYSTAL LAiKE TOWNSHIP
EUREKA TOWNSHIP
PALATINE TOWNSHIP
PLEASANT VALLEY TOWNSHIP
BELLE PRAIRIE TOWNSHIP
BONILLA TOWNSHIP
BROADLAND TOWNSHIP
CARLYLE TCWNSHIP
FOSTER TOWNSHIP
IOWA TOWNSHIP
LIBERTY TOWNSHIP
LOGAN TOWNSHIP
NANCE TOWNSHIP
SAND CREEK TOWNSHIP
EAGLE TOWNSHIP
HIGHLAND TOWNSHIP
OLA TCWNSHIP
PLEASANT GROVE TOWNSHIP
RICHLAND TOWNSHIP
SMITH TCWNSHIP
WILBUR TOWNSHIP
ELVIRA TOWNSHIP
COTTONWOOD TOWNSHIP
HOWARD TOWNSHIP
LAWRENCE TOWNSHIP
MOORE TOWNSHIP
PLAIN CENTER TOWNSHIP
REE TOWNSHIP
EDEN TOWNSHIP
GRACELAND TOWNSHIP
WAVERLY TOWNSHIP
DELANEY TOWNSHIP
TREASURY
05/25/78 AT 31:25
U.S. DEPARTMENT OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
42 FAIRVIEW TOWNSHIP
42
GRAND VALLEY TOWNSHIP
42
LAKE TOWNSHIP
42
LINCOLN TOWNSHIP
42
MCLAUGHLIN TOWNSHIP
42
MAHTO TCWNSHIP
42
PIONEER TOWNSHIP
42
PLEASANT RIDGE TOWNSHIP
42
PRAIRIE VIEW TOWNSHIP
42
RIDGELAND TOWNSHIP
42
RIVERSIDE TOWNSHIP
42
ROLLING GREEN TOWNSHIP
42
SHERMAN TOWNSHIP
42
THUNDER HAWK TOWNSHIP
42
TWIN BUTTE TOWNSHIP
42
WAKPALA TOWNSHIP
42
WALKER TOWNSHIP
42
WATAUGA TOWNSHIP
42
MISSION TOWNSHIP
42 FARMINGTON TOWNSHIP
42
GRENVILLE TOWNSHIP
42
HIGHLAND TOWNSHIP
42
NUTLEY TOWNSHIP
42
OAK GULCH TOWNSHIP
42
RACINE TOWNSHIP
42
VALLEY TOWNSHIP
42
HOLLAND TCWNSHIP
42
CLEVELAND TOWNSHIP
42
CLOYD VALLEY TOWNSHIP
42
COTTONWOOD LAKE TOWNSHIP
42
GLOVER TOWNSHIP
42
HCSMER TOWNSHIP
42
NORTH BRYANT TOWNSHIP
42
ODESSA TOWNSHIP
42
POWELL TOWNSHIP
42
COTTONWOOO TOWNSHIP
42
PROVO TOWNSHIP
42
ARCADE TOWNSHIP
42
CENTERVILLE TOWNSHIP
42
ENTERPRISE TOWNSHIP
42
FAIRVIEW TOWNSHIP
42
ZELL TOWNSHIP
42
ELLSTON TOWNSHIP
42
FAIRFAX CIVIL TOWNSHIP
42
LANDING CREEK TOWNSHIP
42
PLEASANT VALLEY TOWNSHIP
PAGE2&1
TREASURY
05/25/78 AT 31:25
U.S. DEPARTMENT
PAGE262
OF THE
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
42 STAR VALLEY TOWNSHIP
42
ALDEN TOWNSHIP
42
FAIRVIEW TOWNSHIP
<t2 FLORENCE TOWNSHIP
42
HOWELL TOWNSHIP
42
LOGAN TOWNSHIP
42
MCNDAMIN TOWNSHIP
42
ONTARIO TOWNSHIP
42
PARK TOWNSHIP
42
ROSE HILL TOWNSHIP
42
SPRING TOWNSHIP
42
SPRING HILL TOWNSHIP
42
CROSS PLAINS TOWNSHIP
42 FAIR TOWNSHIP
42 LIBERTY TOWNSHIP
42
MILLTOWN TOWNSHIP
42
WITTENBERG TOWNSHIP
42
LINCOLN TOWNSHIP
42
VALLEY TOWNSHIP
42
WASHINGTON TOWNSHIP
42 Wf HAMILTON TGWNSHIP
42
LITTLE BUFFALO TOWNSHIP
42
ANINA TOWNSHIP
42
BLAINE TOWNSHIP
42
CROW TOWNSHIP
42
FRANKLIN TOWNSHIP
42
MARLAR TOWNSHIP
42
PLEASANT TOWNSHIP
42
CLARNO TOWNSHIP
42
BROOKFIELD TOWNSHIP
42
JEFFERSON TOWNSHIP
42
UNION TOWNSHIP
42
LINCOLN TOWNSHIP
42
WACKER TOWNSHIP
42
BUFFALO TOWNSHIP
42
DUMARCE TOWNSHIP
42
EDEN TOWNSHIP
42
FORT TOWNSHIP
42
PLEASANT VALLEY TOWNSHIP
42
SISSETON TOWNSHIP
42
CORN CREEK TOWNSHIP
42
MCSHER TOWNSHIP
42
NCRRIS TOWNSHIP
42
GRAFTON TOWNSHIP
42
MINER TOWNSHIP
42
ROCK CREEK TOWNSHIP
TREASURY
05/2 5/76 AT 31:25
U.S. DEPARTMENT OF THE
PAGE26J
TREASURY
DISTRESSED AREA ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE TITLE
42 ANDERSON TOWNSHIP
42
FLAT CREEK TOWNSHIP
42
STROOL TOWNSHIP
42
VROOMAN TOWNSHIP
42
DRY WOOD LAKE TWP
42
LAKE TOWNSHIP
42
LEE TOWNSHIP
42
AFTON TOWNSHIP
42
BENEDICT TOWNSHIP
42
JACKSON TOWNSHIP
42
LETCHER TOWNSHIP
42
LOGAN TOWNSHIP
42
ONEIDA TOWNSHIP
42
GARFIELD TOWNSHIP
42
STAR PRAIRIE TOWNSHIP
42
DGLTON TOWNSHIP
42
HURLEY TOWNSHIP
42
MARINOAHL TOWNSHIP
H2
UTICA TOWNSHIP
STATE = 42: 157 RECORDS
TEST
05/25/78 AT 31:25
U.S. DEPARTMENT
PAGE2&4
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
TITLE
BEOFORD COUNTY
CAMPBELL COUNTY
CARROLL COUNTY
CCFFEE COUNTY
CROCKETT COUNTY
CUMBERLAND COUNTY
DECATUR COUNTY
DYER COUNTY
FAYETTE COUNTY
FENTRESS COUNTY
FRANKLIN COUNTY
GI3S0N COUNTY
GILES COUNTY
GRAINGER COUNTY
GREENE COUNTY
GRUNDY COUNTY
HAMBLEN COUNTY
HAMILTON COUNTY
HANCOCK COUNTY
HARDEMAN COUNTY
HAYWOOD COUNTY
JACKSON COUNTY
LAKE COUNTY
LINCOLN COUNTY
LOUDON COUNTY
MCMINN COUNTY
MARSHALL COUNTY
MAURY COUNTY
MEIGS COUNTY
MONROE COUNTY
MCORE COUNTY
MORGAN COUNTY
OVERTON COUNTY
PICKETT COUNTY
POLK COUNTY
PUTNAM COUNTY
ROANE COUNTY
SCOTT COUNTY
STEWART COUNTY
VAN BUREN COUNTY
WAYNE COUNTY
WHITE COUNTY
LAKE CITY TOWN
SHELBYVILLE TOWN
WARTRACE TOWN
CLEVELAND CITY
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE265
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
43 JELLICO CITY
43
LA FOLLETTE CITY
43
CARYVILLE TOWN
43
JACKSBORO TOWN
43
AUBURNTOWN TOWN
43
ATWOOD CITY
43
BRUCETON TOWN
43
HCLLOW ROCK TOWN
43
HUNTINGDON TOWN
43
MCKENZIE CITY
43
MCLEMCRESVILLE TOWN
43
TREZEVANT TOWN
43
CLARKSBURG TOWN
43
ELIZABETHTON CITY
43
WATAUGA CITY
43
NEWPORT TOWN
43
PARROTTSVILLE TOWN
43
MANCHESTER CITY
43
ALAMO TOWN
43
BELLS TOWN
45
MAURY CITY TOWN
45
CRQSSVILLE CITY
45
PLEASANT HILL TOWN
43
CRAB ORCHARD CITY
43
DECATURVILLE TOWN
43
PARSONS TOWN
45
ALEXANDRIA TOWN
45
DCWELLTOWN TOWN
45
LIBERTY TOWN
43
TRIMBLE TCWN
43
LA GRANGE TOWN
43
MOSCOW TOWN
43
OAKLAND TOWN
43
ROSSVILLE TOWN
43
SOMERVILLE TOWN
43
GALLAWAY CITY
43
WILLISTON CITY
43
BRADEN TOWN
43
JAMESTOWN TOwN
43
ALLARDT TCWN
43
COWAN TOWN
43
DECHERD TOWN
43
HUNTLAND TOWN
43
WINCHESTER CITY
43
BRADFORD TOWN
45
DYER CITY
TREASURY
05/25/78 AT 31:25
U.S. DEPARTMENT OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
43
45
43
43
43
45
43
TITLE
GIBSON TOWN
HUMBOLDT CITY
MEDINA TOWN
MILAN CITY
RUTHERFORD TOWN
TRENTON CITY
YCRKVILLE TOWN
ARDMORE CITY
ELKTON TOWN
LYNNVILLE TOWN
PULASKI CITY
MINOR HILL CITY
RUTLEDGE CITY
BAILEYTON
GREENEVILLE TOWN
TUSCULUM CITY
MCSHEIM TOWN
ALTAMONT TOWN
PALMER TOWN
TRACY CITY TOWN
CCALMONT TOWN
8EERSHEBA SPRINGS TOWN
MORRISTOWN TOWN
CHATTANOOGA CITY
LAKESITE CITY
SNEEDVILLE TOWN
BOLIVAR CITY
HICKORY VALLEY TOWN
HCRNSBY TOWN
MIDOLETON TOWN
SILERTON TOWN
TOONE TOWN
WHITEVILLE TOWN
SALTILLO CITY
SAVANNAH TOWN
BROWNSVILLE TOWN
STANTON CITY
SARDIS TOWN
GAINES80R0 TOWN
JEFFERSON CITY TOWN
WHITE PINE TOWN
RIDGELY TOWN
TIPTONVILLE CITY
GATES TOWN
HENNING TOWN
IRON CITY TOWN
PAGE2&G
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
43 FAYETTEVILLE CITY
43
LENOIR CITY CITY
43
L O U D O N TOWN
43
GREENBACK C I T Y
43
PHILADELPHIA C I T Y
43
A T H E N S CITY
43
ENGLEW003 TOWN
43
ETOWAH TOWN
43
NIOTA CITY
43
C A L H O U N CITY
43
RAMER CITY
43
MICHIE TOWN
43
S T A N T O N V I L L E TOWN
43
F I N G E R TOWN
43
DENMARK TOWN
43
C O R N E R S V I L L E TOWN
43
LEWISBURG TOWN
43
MOUNT P L E A S A N T TOWN
43
DECATUR TOWN
43
MADISONVILLE TOWN
43
SWEETWATER C I T Y
43
T E L L I C O P L A I N S TOWN
<*3 VCNORE TOWN
45
LYNCHBURG TOWN
45
OAKDALE TOWN
43
LIVINGSTON TOWN
43
BYROSTOWN TOWN
43
BENTON CITY
43
DUCKTOWN CITY
43
ALGOOD TOWN
43
BAXTER TOWN
43
MONTEREY TOWN
43
D A Y T O N CITY
43
HARRIMAN CITY
<*S K I N G S T O N C I T Y
43
RCCKWOOD C I T Y
43
ONEIDA CITY
43
HUNTSVILLE TOWN
43
CUMBERLAND C I T Y TOWN
43
D O V E R TOWN
43
SPENCER TOWN
43
MCMINNVILLE CITY
43
VIOLA TCWN
43
CLIFTON CITY TOWN
43
COLLINWOOD C I T Y
43
WAYNESBORO C I T Y
OF THE
TREASURY
PAGE267
5/23/
'8
'^DEPARTMENT
OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TE-ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
A3
43
SPARTA CITY
OCYLE TOHN
STATE = <»3:
186 RECOROS
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
44 BEE COUNTY
44
BOWIE COUNTY
44
BREWSTER COUNTY
44
BROOKS COUNTY
44
BURLESON COUNTY
44
CALDWELL COUNTY
44
CAMP COUNTY
44
COLEMAN COUNTY
44
COLLINGSWORTH COUNTY
44
COMAL COUNTY
44
CCMANCHE COUNTY
44
CCNCHO COUNTY
44
CULBERSON COUNTY
44
DELTA COUNTY
44
QE WITT COUNTY
44
DICKENS COUNTY
44
DUVAL COUNTY
44
EASTLAND COUNTY
44
EDWARDS COUNTY
44
FANNIN COUNTY
44
FAYETTE COUNTY
44
GLASSCOC< COUNTY
44
GOLIAD COUNTY
44
GCNZALES COUNTY
44
GRAYSON COUNTY
44
HAMILTON COUNTY
44
HILL COUNTY
44
HCPKINS COUNTY
44
HOUSTON COUNTY
44
HUNT COUNTY
44
IRION COUNTY
44
JEFF DAVIS COUNTY
44
JIM HOGG COUNTY
44
JIM WELLS COUNTY
44
KENEDY COUNTY
44
KINNEY COUNTY
44
KLEBERG COUNTY
44
LAMAR COUNTY
44
LA SALLE COUNTY
44
LIVE OAK COUNTY
44
MCCULLOCH COUNTY
44
MCMULLEN COUNTY
44
MARION COUNTY
44
MASON COUNTY
44
MENARD COUNTY
44
MILAM COUNTY
PAGE269
TREASURY
° 5 / " " 8 'I.^DEP.RTHENT OF THE TRE.SURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
44 MILLS COUNTY
44
MOTLEY COUNTY
44
NEWTON COUNTY
44
NCLAN COUNTY
44
PALO PINTC COUNTY
44
PRESIDIO COUNTY
<»4 REAL COUNTY
<t4 RED RIVER COUNTY
44
REEVES COUNTY
44
ROBERTSON COUNTY
44
RUNNELS COUNTY
44
SABINE COUNTY
44
SAN AUGUSTINE COUNTY
44
SAN SABA COUNTY
44
SHELBY COUNTY
44
TRINITY COUNTY
44
VAL VERDE COUNTY
44
WASHINGTON COUNTY
44
WILLACY COUNTY
44
ZAVALA COUNTY
4*
BURKE CITY
44
HUDSON CITY
44
SAN FELIPE TOWN
44
BASTROP CITY
44
ELGIN CITY
44
BEEVILLE CITY
44
MERIDIAN CITY
44
MORGAN CITY
44
WALNUT SPRINGS CITY
44
DE KAL3 TOWN
44
HOOKS CITY
44
NEW BOSTON TOWN
44
TEXARKANA CITY
44
LEARY CITY
44
ALPINE TOWN
44
FALFURRIAS CITY
44
CALDWELL CITY
44
SNOOK CITY
44
LULING CITY
44
BLOOMBURG TOWN
44
HUGHES SPRINGS TOWN
44
MARIETTA TOWN
44
NOVICE CITY
44
SANTA ANNA TOWN
44
DODSON TOWN
44
WELLINGTON CITY
P
"E2">
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE TREASURY
OISTRESSEO AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
TITLE
NEW B R A U N F E L S CIT
COMANCHE C I T Y
DE LEON CITY
GUSTINE TOWN
EDEN CITY
VAN HORN TOWN
TEXLINE TOWN
HEREFORD C I T Y
C O O P E R CITY
PECAN GAP CITY
CUERO CITY
D I C K E N S CITY
SPUR CITY
HEDLEY TOWN
8ENAVIDES CITY
C A R B O N TOWN
CISCO CITY
EASTLANO C I T Y
GORMAN CITY
RANGER CITY
RISING STAR TOWN
R O C K S P R I N G S TOWN
BAILEY CITY
BCNHAM CITY
DCDD CITY TOWN
ECTOR TOWN
HONEY GROVE CITY
LADONIA TOWN
L E O N A R D CITY
SAVOY TOWN
TRENTON TOWN
WINDOM TOWN
F A Y E T T E V I L L E TOWN
SCHULENBURG CITY
CARMINE CITY
STREETMAN TOWN
WCRTHAM TOWN
SEAGRAVES CITY
GALVESTON CITY
G O N Z A L E S CITY
NIXON CITY
WAELDER CITY
MCLEAN CITY
BELLS TOWN
CCLLINSVILLEi TOWN
OENISON CITY
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE272,
OF THE
TREASURY
DISTRESSED AREA ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
«t4
44
44
44
44
44
44
TITLE
GUNTER TOWN
HOWE TOWN
POTTSBORO TOWN
TIOGA TOWN
VAN ALSTYNE TOWN
WHITES80R0 TOWN
WHITEWRIGHT TOWN
TCM BEAN TOWN
SCUTHMAYD TOWN
DORCHESTER TOWN
SADLER CITY
HAMILTON CITY
CHILLICCTHE CITY
CHANNING TOWN
OBRIEN CITY
ABBOTT TOWN
HILLSBORO CITY
ITASCA CITY
MOUNT CALM TOWN
PENELOPE TOWN
CCMO TOWN
CUMBY CITY
CROCKETT CITY
KENNARD TOWN
CADDO MILLS CITY
CELESTE TOWN
COMMERCE CITY
GREENVILLE CITY
QUINLAN CITY
WOLFE CITY CITY
WEST TAWAKONI TOWN
NEYLANDVILLE TOWN
CAMPBELL TOWN
BRYSON CITY
VALENTINE TOWN
PORT ARTHUR CITY
ALICE CITY
PREMONT CITY
BRACKETTVILLE CITY
SPOFFORD CITY
KINGSVILLE CITY
BENJAMIN CITY
GCREE CITY
PARIS CITY
TOCO TOWN
LCMETA TOWN
TEST
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE273
OF THE
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
44 CCTULLA CITY
44
GEORGE WEST CITY
44
THREE RIVERS CITY
44
MELVIN TOWN
44
JEFFERSON CITY
44
MENARD TOWN
44
CAMERON CITY
44
ROCKOALE CITY
44
BUCKHOLTS CITY
ST ATE = 44: 193 RECORDS
TREASURY
PAGE274*
05/2 3/78 *5J!*"PARTMEMT OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
44 MILAMO TOKN
STATE = <*<*'• 1 RECOROS
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
44 GOLDTHWAITE CITY
44
MATADOR TOWN
44
CUSHING TOWN
44
GARRISON TOWN
44
CHI RE NO CITY
44
DAWSON CITY
44
KERENS TOWN
44
BARRY CITY
44
EMHOUSE TOWN
44
RICHLAND CITY
44
NEWTON CITY
44
BLACKWELL TOWN
44
SWEETWATER CITY
44
AGUA DULCE CITY
44
DRISCOLL CITY
44
RCBSTOWN CITY
44
GORDON TOWN
44
GRAFORD TOWN
44
MINGUS CITY
44
STRAWN CITY
44
MARFA CITY
44
CAMP WOOD CITY
44
LEAKEY CITY
44
ANNONA TOWN
44
AVERY TOWN
44
BGGATA TOWN
44
CLARKSVILLE CITY
44
PECOS CITY
44
BALMORHEA CITY
44
WOGDSBORO CITY
44
BREMOND CITY
44
CALVERT CITY
44
HEARNE CITY
44
WINTERS CITY
44
HEMPHILL CITY
44
PINELAND CITY
44
8R0NS0N CITY
44
SAN AUGUSTINE CITY
44
BROADDUS TOWN
44
SAN SA8A CITY
44
CENTER CITY
44
JOAQUIN TOWN
44
TIMPSON CITY
44
HUXLEY CITY
44
MEADOW TOWN
;T Atf = /./.• /. c; ocrnonc
PAGE275
TREASURY
PAGE27G.
05/23/78
A
^^
S
^p
A R T M E N T
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
44
TITLE
WELLMAN TOWN
STATE = 44: 1 RECORDS
TREASURY
05/2 3/78 AT 31:25
U.S. DEPARTMENT
DISTRESSED AREA
(ELIGIBLE
STATE
44
44
44
44
44
44
44
<#4
44
44
44
44
44
44
44
44
44
44
TITLE
THROCKMORTON CITY
GROVETON CITY
TRINITY CITY
WOODVILLE TOWN
COLMESNEIL TOWN
DEL RIO CITY
GRAND SALINE CITY
VAN CITY
EDOM CITY
BARSTOW TOWN
GRANDFALLS TOWN
WHARTON CITY
VERNON CITY
LYFORD TOWN
RAYMONDVILLE CITY
STOCKDALE CITY
PLAINS TOWN
CRYSTAL CITY CITY
STATE = 44:
18 RECORDS
PAGE277
OF THE
TREASURY
ELIGIBILITY TE'ST
GOVERNMENTS)
PAGE278
X
05/23/78 ^ # » » p A R T H E N T
0jr T H E
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
45 GARFIELD COUNTY
45 PIUTE COUNTY
45 RICH COUNTY
45 SANPETE COUNTY
45 MINERSVILLE TOWN
45 DEWEYVILuE ; TOWN
45 GARLAND CITY
45 MANTUA TOWN
45 PLYMOUTH TOWN
45 SNOWVILLE TOWN
45 ESCALANTE TOWN
i»5 HATCH TOWN
45 EUREKA CITY
<»5 NEPHI CITY
45 HOLDEN TOWN
45 KANOSH TOWN
45 LEAMINGTON TOWN
45 LYNNDYL TOWN
45 MEADOW TOWN
45 SCIPIO TOWN
45 CIRCLEVILLE TOWN
45 JUNCTION TOWN
45 KINGSTON TOWN
45 MARYSVALE TOWN
45 LAKETOWN TOWN
45 RANDOLPH TOWN
d5 WOODRUFF TOWN
45 CENTERFIELD TCWN
45 EPHRAIM CITY
45 FAIRVIEW CITY
45 FAYETTE TOWN
45 FOUNTAIN GREEN C I T Y
45 GUNNISON CITY
45 MANTI CITY
45 MAYFIELD TOWN
45 MORONI CITY
45 MCUNT PLEASANT CITY
45 SPRING CITY
45 STERLING TOWN
45 WALES TOWN
45 HENEFER TOWN
45 SOLDIER SUMMIT TOWN
45 UINTAH
BICKNELL
TOWNCITY
OGDEN
HARRISVILLE
CITY
TOWN
TREASURY
05/23/78 AT 31:25
U.S. OEPARTMEN T OF THE
PAGE279.
TREASURY
DISTRESSED ARE
A ELIGIBILITY TEST
(ELIGIBLE
GOVERNMENTS)
STATE TITLE
STATE = 45:
46
RECORDS
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE280
OF THE
TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE
STATE
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
GOVERNMENTS)
TITLE
3ENNINGT0N COUNT
FRANKLIN C OUNTY
GRAND ISLE COUNT
RUTLAND CO UNTY
WINDHAM CO UNTY
WINDSOR CO UNTY
MANCHESTER VILLA GE
NORTH 8ENN INGTON VILLAGE
OLD 3ENNIN GTON V ILLAGE
READS80R0 VILLAG E
ENOSBURG F ALLS V ILLAGE
RICHFORD V ILLAGE
ST ALBANS CITY
ALBURG VIL LAGE
AL8ANY VIL LAGE
BARTON VIL LAGE
DERBY CENT ER VIL LAGE
DER3Y LINE VILLA GE
NEWPORT CI TY
ORLEANS VI LLAGE
POULTNEY V ILLAGE
RUTLAND CI TY
BELLOWS FA LLS VI LLAGE
NEWFANE VI LLAGE
N WESTMINS TER VI LLAGE
SAXTONS RI VER VI LLAGE
WESTMINSTE R VILL AGE
LUDLOW VIL LAGE
PERKINSVIL LE VIL LAGE
PROCTORSVI LLE VI LLAGE
ARLINGTON TCWN
BENNINGTON TOWN
DORSET TOW N
LANDGROVE TOWN
MANCHESTER TOWN
PERU TOWN
POWNAL TOW N
READSBORO TOWN
RUPERT TOW N
SANDGATE T OWN
SEARSBURG TOWN
SHAFTSBURY TOWN
STAMFORD T OWN
SUNOERLAND TOWN
WINHALL TO WN
WOODFORD T OWN
05/2 3/78 AT 31:25
U.S. DEPARTMENT
DISTRESSED
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
4b
OF THE
TREASURY
AREA ELIGIBILITY TEIST
(ELIGIBLE
STATE
PAGE281
GOVERNMENTS)
TITLE
BARNET TOW N
HARDWICK T OWN
ST JOHNSBU RY TOWN
BLOOMFIELO TOWN
CANAAN TOW N
GUILDHALL TOWN
LEMINGTON TOWN
8AKERSFIEL 0 TOWN
BERKSHIRE TOWN
ENOSBURG T OWN
FAIRFAX TO WN
FAIRFIEL3 TOWN
FLETCHER T OWN
FRANKLIN T OWN
GEORGIA TO WN
HIGHGATE T OWN
MCNTGOMERY TOWN
RICHFORD T OWN
ST AL8ANS TOWN
SHELDON TO WN
ALBURG TOW N
ISLE LA MO TTE TOWN
NORTH HERO TOWN
BARTON TOW N
BROWNINGTO N TOWN
JAY TOWN
TROY TOWN
BENSON TOW N
BRANOON TO WN
CASTLETON TOWN
CHITTENDEN TOWN
CLARENDON TOWN
DANBY TOWN
FAIR HAVEN TOWN
HUBBARDTON TOWN
IRA TOWN
MENDON TOW N
MIDDLETOWN SPRINGS TOWN
MOUNT H O L L Y TOWN
PAWLET TOW N
PITTSFIELD TOWN
POULTNEY T OWN
PROCTOR TO WN
SHERBURNE TOWN
SHREWSBURY TOWN
SUDBURY TO WN
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE232
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
4b TINMCUTH TOWN
4b
WALLINGFORD TOWN
4b
WELLS TOWN
4b
WEST HAVEN TOWN
4b
WEST RUTLAND TOWN
4b
ATHENS TOWN
4b
BRATTLE80R0
TOWN
4b
GRAFTON TOWN
4b
LONDONDERRY TOWN
4b
NEWFANE TOWN
4b
PUTNEY TOWN
4b
ROCKINGHAM TOWN
4b
WESTMINSTER TOWN
4b
WINDHAM TOWN
4b
BALTIMORE TOWN
4b
CAVENDISH TOWN
4b
CHESTER TOWN
4b
LUDLOW TOWN
4b
READING TOWN
4b
SPRINGFIELD TOWN
4b
WEATHERSFIELD TOWN
4b
WESTON TOWN
4b
WEST WINDSOR TOWN
4b
WINDSOR TOWN
STATE = 4b: 1 lb RECORDS
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
47 ALLEGHANY COUNTY
47
BATH COUNTY
47
BLAND COUNTY
47
BRUNSWICK COUNTY
47
BUCKINGHAM COUNTY
47
CARROLL COUNTY
47
CHARLOTTE COUNTY
47
FLOYD COUNTY
47
GILES COUNTY
47
GREENSVILLE COUNTY
47
HIGHLAND COUNTY
47
KING AND QUEEN COUNTY
47
LUNENBURG COUNTY
47
NORTHAMPTON COUNTY
47
NORTHUMBERLAND COUNTY
47
NCTTOWAY COUNTY
47
PATRICK COUNTY
47
RICHMOND COUNTY
47
RCCKBRIDSE COUNTY
47
SHENANDOAH COUNTY
47
SMYTH COUNTY
47
SURRY COUNTY
47
SUSSEX COUNTY
47
IRON GATE TOWN
47
ALBERTA TOWN
47
LAWRENCEVILLE TOWN
47
CHARLOTTE TOWN
47
DRAKES BRANCH TOWN
47
KEYSVILLE TOWN
47
PHOENIX TOWN
47
BCYCE TOWN
47
FLOYD TOWN
47
GLEN LYN TOWN
47
NARROWS TOWN
47
PEARIS3URG TOWN
47
PEMBROKE TOWN
47
RICH CREEK TOWN
47
IRVINGTON TOWN
47
KENBRIDGE TOWN
47
VICTORIA TOWN
47
CAPE CHARLES TOWN
47
CHERITON TOWN
47
NASSAWADOX TOWN
47
BLACKSTGNE TOWN
47
BURKEVILLE TOWN
47
GCRDONSVILLE TOWN
PAGE283
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
DISTRESSED AREA
(ELIGIBLE GOVERNMENTS)
STATE TITLE
47 STANLEY TOWN
47
WARSAW TOWN
47
GLASGOW TOWN
47
GOSHEN TOWN
47
EDIN8URG TOWN
47
MOUNT JACKSON TOWN
47
NEW MARKET TOWN
47
TOMS BROOK TOWN
47
WOODSTOCK TOWN
47
CHILHOWIE TOWN
47
MARION TOWN
47
CLAREMONT TOWN
47
DENDRON TOWN
47
SURRY TOWN
47
STONY CREEK TOWN
47
WAKEFIELD TOWN
47
WAVERLY TOWN
47
MCNTROSS TOWN
47
BUENA VISTA CITY
47
CCVINGTON CITY
47
DANVILLE CITY
47
LEXINGTON CI TY
47
PETERSBURG CITY
47
RADFORD CITY
47
SCUTH BOSTON CITY
47
WAYNESBORO CITY
STATE = 47: 72 RECORDS
PAGE28
OF THE
TREASURY
ELIGIBILITY TE'ST
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
48 COLUMBIA COUNTY
48
COWLITZ COUNTY
<#8 GARFIELD COUNTY
48 GRAYS HARBOR COUNTY
48
JEFFERSCN COUNTY
48
KING COUNTY
48
KITTITAS COUNTY
48
PACIFIC COUNTY
48
PIERCE COUNTY
48
SNOHOMISH COUNTY
48
WALLA WALLA COUNTY
48
LIND TOWN
48
RITZVILLE CITY
48
WASHTUCNA TOWN
48
LEAVENWORTH CITY
48
DAYTON CITY
48
STARBUCK CITY
48
KALAMA TOWN
46
KELSO CITY
48
LCNGVIEW CITY
48
PCMEROY CITY
46
CCULEE CITY TOWN
48
ELECTRIC CITY
48
EPHRATA CITY
46
HARTLINE TOWN
48
MCSES LAKE CITY
48
QUINCY TOWN
48
WILSON CREEK TOWN
48
MATTAWA TOWN
48
GEORGE CITY
48
ABERDEEN CITY
48 COSMOPOLIS TOWN
48
HCQUIAM CITY
48
MC CLEARY TOWN
48
OAKVILLE TOWN
48
WESTPORT CITY
48
PORT TOW.NSEND CITY
48
ALGONA CITY
48
AUBURN CITY
48
BEAUX ARTS VILLAGE
48
BOTHELL CITY
46
CARNATION TOWN
48 CLYDE HILL TOWN
48
DUVALL TOWN
48
ENUMCLAW CITY
48
HUNTS POINT TOWN
PAGE265
TREASURY
05/23/76 AT 31:25
U.S. DEPARTMENT
PAGE28G
OF THE
DISTRESSED AREA ELIGIBILITY TE'ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
48 ISSAQUAH CITY
48
KENT CITY
48
MEDINA CITY
48
PACIFIC TOWN
48
RENTON CITY
48
SEATTLE CITY
48
SKYKOMISH TOWN
48
SNOQUALMIE TOWN
48
TUKWILA CITY
48
BLACK DIAMOND TOWN
48
DES MOINES CITY
48
YARROW POINT TOWN
48
MERCER ISLAND CITY
48
LAKE FOREST PARK CITY
48
BREMERTON CITY
48
PCRT ORCHARD CITY
48
CLE ELUM CITY
48
ELLENSBURG CITY
48
KITTITAS TOWN
48
ROSLYN CITY
48
8INGEN TOWN
48
WHITE SALMON TOWN
48
TOLEDO TOWN
46
OROVILLE TOWN
48
TWISP TOWN
48
RAYMOND CITY
48
SCUTH BENO CITY
48
ICNE TOWN
48
3CNNEY LAKE TOWN
48
BUCKLEY CITY
48
CARBONADO TOWN
48
OUPONT CITY
48
GIG HARBOR TOWN
48
ORTING TOWN
48
PUYALLUP CITY
48
RCY CITY
48
SCUTH PRAIRIE TOWN
48
SUMNER CITY
48
TACOMA CITY
48
WILKESON TOWN
48
FIFE TOWN
46
LA CONNER TOWN
48
LYMAN TOWN
48
NCRTH BONNEVILLE TOWN
48
ARLINGTON CITY
48
DARRINGTON TOWN
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE287
OF THE
TREASURY
DISTRESSED AREA ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE TITLE
48 EDMONOS CITY
48
EVERETT CITY
48 GOLD BAR TOWN
48 GRANITE FALLS TOWN
48
INDEX TOWN
48
MARYSVILLE CITY
48
MONROE CITY
48
MCUNTLAKE TERRACE CITY
48
MUKILTEO CITY
48
SNOHOMISH CI TY
48
STANWOOD CITY
48
SULTAN TOWN
46
WOODWAY TOWN
48
LYNNWOOD CITY
48
LAKE STEVENS TOWN
48
BRIER CITY
48
CHENEY CITY
48
MEDICAL LAKE TOWN
48
SPOKANE CITY
48
NCRTHPORT CITY
48
COLLEGE P U C E TOWN
48
WALLA nALLA CITY
48 GRANGER CITY
48
TOPPENISH CITY
48
YAKIMA CITY
STATE = 48: 117 RECORDS
TEST
05/23/78 AT 01:25
U.S. DEPARTMENT
PAGE288
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
49 BERKELEY COUNTY
49
BRAXTON COUNTY
49 CABELL COUNTY
49
CALHOUN COUNTY
49
CLAY COUNTY
49
DODDRIDGE COUNTY
49 FAYETTE COUNTY
49
GILMER COUNTY
49 GRANT COUNTY
49 GREENBRIER COUNTY
49
HARRISON COUNTY
49
JACKSON COUNTY
49 LEWIS COUNTY
49 LINCOLN COUNTY
49
MARION COUNTY
49
MARSHALL COUNTY
49
MASON COUNTY
49
MINGO COUNTY
49
MONONGALIA COUNTY
49
MONROE COUNTY
49
MORGAN COUNTY
49
COUNTY OF OHIO
49
PENOLETCN COUNTY
49
POCAHONTAS COUNTY
49
PRESTON COUNTY
49
RANDOLPH COUNTY
49
RITCHIE COUNTY
49
ROANE COUNTY
49
SUMMERS COUNTY
49
TAYLOR COUNTY
49
TUCKER COUNTY
49
TYLER COUNTY
49
WAYNE COUNTY
49
WEBSTER COUNTY
49
WETZEL COUNTY
49
WIRT COUNTY
49
WOOD COUNTY
49
HEDGESVILLE TOWN
49
MARTINS6URG CITY
49
BURNSVILLE TOWN
49
FLATWOODS TOWN
49
GASSAWAY TOWN
49
SUTTON TOWN
49
HUNTINGTON CITY
49
CLAY TOWN
49
WEST UNION TOWN
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE2B9
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
49
TITLE
ANSTED TOW N
FAYETTEVIL LE; TOWN
MEADOW BRI DGE TOWN
MCUNT HOPE CITY
PAX TOWN
THURMOND T OWN
GLENVILLE TOWN
LAYOPOLIS TOWN
FALLING SP RINGS TOWN
QUINWOOD T OWN
RAINELLE T OWN
RONCEVERTE CITY
CLARKSBURG CITY
LOST CREEK TOWN
LUMBERPORT TOWN
NUTTER FOR T TOWN
SALEM CITY
ST0NEW003 TOWN
ANMOORE TO WN
RAVENSWOOD TOWN
RIPLEY CIT Y
JANE LEW T OWN
WESTON CIT Y
HAMLIN TOW N
ANAWALT TO WN
FAIRMONT C ITY
FAIRVIEW T OWN
FARMINGTON TOWN
GRANT TCWN TOWN
MANNINGTON CITY
MONONGAH T OWN
RIVESVILLE TOWN
WORTHINGTO N TOWN
BARRACKVIL LE TOWN
BENWOOD CI TY
CAMERON CI TY
MCMECHEN C ITY
MOUNDSVILL E CITY
HARTFORD T OWN
HENDERSON TOWN
LEON VILLA GE
MASON TOWN
NEW HAVEN TOWN
POINT PLEA SANT CITY
BRAMWELL T OWN
MATOAKA TO WN
TREASURY
)5/23/78 AT 31:25
U.S. DEPARTMENT
PAGE290
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
TITLE
OAKVALE TO WN
PIEDMONT C ITY
RIDGELEY T OWN
GILBERT TO WN
MATEWAN TO WN
WILLIAMSON CITY
MCRGANTOWN CITY
OSAGE TOWN
PETERSTOWN TOWN
U M O N TOWN
BATH TOWN
PAW PAW TO WN
RICHWOOD C ITY
CASS TOWN
DURBIN TOWN
HILLSBORO VILLAGE
MARLINTON TOWN
ALBRIGHT T OWN
BRANDONVIL LE CORPORATION
NEWBURG TO WN
ROWLESBURG TOWN
TUNNELTON TCWN
BEVERLY TO WN
ELKINS CIT Y
TCWN HARMA N
HUTTONSVIL LE TOWN
MILL CREEK TOWN
MONTROSE C ORPORATION
WCMELSOORF F TOWN
AUBURN TOW N
CAIRO TCWN
ELLENBORO TOWN
HARRISVILL E TOWN
PENNSBORO CITY
PULLMAN TO WN
REEDY TOWN
SPENCER CI TY
HINTON CIT Y
FLEMINGTON TOWN
GRAFTON CI TY
DAVIS TOWN
HAMBLETON TOWN
HENDRICKS TOWN
PARSONS CITY
THOMAS TOWN
FRIENDLY TOWN
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE291
OF THE
TREASURY
DISTRESSED AREA ELIGIBILITY
(ELIGIBLE GOVERNMENTS)
STATE TITLE
49 MIDDLE80URNE TOWN
49
CEREDO TOWN
49
FORT GAY TOWN
49
KENOVA CITY
49
WAYNE TOWN
49
ADDISON TOWN
49
CAMDEN ON GAULEY
49
COWEN TOWN
49
HUNDRED TOWN
49
LITTLETON TOWN
49
NEW MARTINSVILLE
49
PINE GROVE TOWN
49
SMITHFIELD TOWN
49
ELIZABETH TOWN
STATE = 49: 152 RECORDS
TOWN
CITY
TEST
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE292
OF THE
OISTRESSEO AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
50 ASHLAND COUNTY
50
8AYFIEL0 COUNTY
50
BUFFALO COUNTY
50
CHIPPEWA COUNTY
50
COLUMBIA COUNTY
50
CRAWFORD COUNTY
50
DOUGLAS COUNTY
50 FLORENCE COUNTY
50 FOREST COUNTY
50
GREEN LAKE COUNTY
50
IOWA COUNTY
50
IRON COUNTY
50
KEWAUNEE COUNTY
50
LAFAYETTE COUNTY
50
MARQUETTE COUNTY
50
MONROE COUNTY
50
RICHLAND COUNTY
50
RUSK COUNTY
50
SAUK COUNTY
50
SHAWANO COUNTY
50
VERNON COUNTY
50
WASHBURN COUNTY
50
ASHLAND CITY
50
BUTTERNUT VILLAGE
50
MELLEN CITY
50
BAYFIELD CITY
50
CABLE VILLAGE
50
MASON VILLAGE
50
WASHBURN CITY
50
FOUNTAIN CITY CITY
50
MCNDOVI CITY
50
BLOOMER CITY
50
CAOOTT VILLAGE
50
CHIPPEWA FALLS CITY
50
CORNELL CITY
50
STANLEY CITY
50
CAMBRIA VILLAGE
50
CCLUMBUS CITY
50
DOYLESTOWN VILLAGE
50 FALL RIVER VILLAGE
50 FRIESLAND VILLAGE
50
LCDI CITY
50
PORTAGE CITY
50
PCYNETTE VILLAGE
50
RIO VILLAGE
50
WYOCENA VILLAGE
TREASURY
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
50 BELL CENTER VILLAGE
50
EASTMAN V I L L A G E
50
G A Y S MILLS V I L L A G E
50
LYNXVILLE V I L L A G E
50
P R A I R I E 3U C H I E N CITY
50
SOLOIERS GROVE VILLAGE
50
STEUBEN V I L L A G E
50
WAUZEKA V I L L A G E
50
FOX LAKE C I T Y
50
KEKOSKEE V I L L A G E
50
OLIVER VILLAGE
50
S U P E R I O R CITY
50
BRANDON V I L L A G E
50
RIPCN CITY
50
MT CALVARY V I L L A G E
50
CRANDON CITY
50
KINGSTON VILLAGE
50
PRINCETGN CITY
50
AVQCA V I L L A G E
50
DCDGEVILLE CITY
50
LINDEN VILLAGE
50
REWEY VILLAGE
50
RIDGEWAY V I L L A G E
50
HURLEY CITY
50
MONTREAL C I T Y
50
MERRILLAN V I L L A G E
50
ALGOMA CITY
50
CASCO VILLAGE
50
KEWAUNEE CITY
50
ARGYLE VILLAGE
50
BENTON VILLAGE
50
DARLINGTON C I T Y
50
GRATIOT V I L L A G E
50
SHULLSBURG C I T Y
50
MERRILL CITY
50
TWO RIVERS C I T Y
50
8R0KAW VILLAGE
50
ELDERON V I L L A G E
50
FENWOOO VILLAGE
50
STRATFORD V I L L A G E
50
ENDEAVOR V I L L A G E
50
MCNTELLO C I T Y
50
OXFORD VILLAGE
50
WESTFIELD V I L L A G E
50
MILWAUKEE CITY
50
KENDALL VILLAGE
PAGE293
OF THE
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE294
OF THE
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
50 MELVINA VILLAGE
50
WILTON VILLAGE
50
WYEVILLE VILLAGE
50
WARRENS VILLAGE
50
GILLETT CITY
50
LENA VILLAGE
50
OCONTO CITY
50
OCONTO FALLS CITY
50
CENTURIA VILLAGE
50
LUCK VILLAGE
50
YU8A VILLAGE
50
BELOIT CITY
50
FOOTVILLE VILLAGE
50
BRUCE VILLAGE
50
CONRATH VILLAGE
50
GLEN FLORA VILLAGE
50
HAWKINS VILLAGE
50
INGRAM VILLAGE
50
LADYSMITH CITY
50
TCNY VILLAGE
50
WEYERHAEUSER VILLAGE
50
BARABOO CITY
50
IRONTON VILLAGE
50
LAKE OELTON VILLAGE
50
LA VALLE VILLAGE
50
LIME RIDGE VILLAGE
50
LOGANVILLE VILLAGE
50
MERRIMAC VILLAGE
50
NORTH FREEDOM VILLAGE
50
PLAIN VILLAGE
50
REEOSBURG CITY
50
ROCK SPRINGS VILLAGE
50
SAUK CITY VILLAGE
50
SPRING GREEN VILLAGE
50
CCUDERAY VILLAGE
50
MATTOON VILLAGE
50
SHAWANO CITY
50
TIGERTON VILLAGE
50
CASCADE VILLAGE
50
GLENBEULAH VILLAGE
50
LUBLIN VILLAGE
50
GENOA VILLAGE
50
LA FARGE VILLAGE
50
ONTARIO VILLAGE
50
READSTOWN VILLAGE
50
VIROQUA CITY
TREASURY
05/23/78 AT 01:25
U.S. DEPARTMENT OF THE TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
5G
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
TITLE
WESTBY CITY
EAGLE RIVER CITY
DELAVAN CITY
S H A R O N VILLAGE
W I L L I A M S B<VY V I L L A G E
BIRCHWOOD V I L L A G E
MINONG VILLAGE
SHELL LAKE C I T Y
S P O O N E R CITY
BIG FALLS V I L L A G E
C L I N T O N V I L L E CITY
OGDENSBURG V I L L A G E
HANCOCK VILLAGE
LOHRVILLE VILLAGE
PLAINFIELD VILLAGE
WAUTOMA CITY
AGENDA TOWN
ASHLAND TOWN
CHIPPEWA TOWN
G I N G L E S TCWN
G O R D O N TOWN
J A C O B S TOWN
LA POINTE TOWN
MARENGO TOWN
MORSE TOWN
PEEKSVILLE TOWN
SANBGRN TOWN
SHANAGOLDEN TOWN
WHITE RIVER TOWN
BARKSDALE TOWN
BARNES TOWN
B A Y F I E L D TOWN
BAYVIEW TOWN
BELL TOWN
CABLE TCWN
CLOVER TOWN
DELTA TOWN
DRUMMOND TOWN
EILEEN TOWN
H U G H E S TOWN
IRON RIVER TOWN
KELLY TCWN
K E Y S T O N E TOWN
LINCOLN TOWN
MASON TOWN
NAMAKAGON TOWN
PAGE295
0 5 / 2 3 / 7 8 AT 3 1 : 2 5
U.S. D E P A R T M E N T
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
50 ORIENTA TOWN
50
OULU TOWN
50
PILSEN TOWN
50
PCRT WING TOWN
50
GRANDVIEW TOWN
50
RUSSELL TOWN
50
TRIPP TOWN
50
WASHBURN TOWN
50
ALMA TOWN
50
BELVIOERE TOWN
50
CANTON TOWN
50
C R O S S TOWN
50
DOVER TOWN
50
GILMANTON TOWN
50
LINCOLN TOWN
50
MAXVILLE TOWN
50
MILTON TOWN
50
MGDENA TOWN
50
MONTANA TOWN
50
WAUMANDEE TOWN
50
ANDERSON TOWN
50
BLAINE TOWN
50
GRANTS8URG TOWN
50
LA FOLLETTE TOWN
50
LINCOLN TOWN
50
ROOSEVELT TOWN
50
WCOD RIVER TOWN
50
ARTHUR TOWN
50
AUBURN TOWN
50
C O O K S VALLEY TOWN
50
OELMAR TOWN
50
EDSON TOWN
50
ESTELLA TOWN
50
G O E T Z TOWN
50
RUBY TOWN
50
W C O D M O H R TOWN
50
ARLINGTON TOWN
50
CALEDONIA TOWN
50
C C L U M B U S TOWN
50
C C U R T L A N D TOWN
50
DEKORRA TOWN
50
FORT W I N N E 3 A G 0 TOWN
50
F O U N T A I N P R A I R I E TOWN
50
H A M P D E N TOWN
>0
LEEDS TOWN
>0
LEWISTON TOWN
PAGE29G
OF
THE
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE297
OF THE
TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE
STATE
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
TITLE
LOWVILLE TOWN
MARCELLON TOWN
NEWPORT T OWN
OTSEGO TO WN
PACIFIC T OWN
RANDOLPH TOWN
SCOTT TOW N
WYOCENA T OWN
CLAYTON T OWN
FREEMAN T OWN
SCOTT TOW N
UTICA TOW N
WAUZEKA T OWN
CLYMAN TO WN
ELBA TOWN
EMMET TOW N
FOX LAKE TOWN
LEBANON T OWN
LEROY TOW N
PORTLAND TOWN
SHIELDS T OWN
THERESA T OWN
PARKLANO TOWN
AURORA TO WN
COMMCNWEA LTH TOWN
FENCE TOW N
FERN TOWN
HOMESTEAD TOWN
TIPLER TO WN
ASHFORD T OWN
ELOORADO TOWN
EMPIRE TO WN
SPRINGVAL E TOWN
WAUPUN TO WN
ALVIN TOW N
ARGONNE T OWN
ARMSTRONG CREEK
BLACKWELL TOWN
CASWELL T OWN
CRANDCN T OWN
FREEDOM T OWN
HILES TOW N
LAONA TOW N
LINCOLN T OWN
NASHVILLE TOWN
POPPLE RI VER TCWN
GOVERNMENTS)
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE298
OF THE
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
50 ROSS TOWN
50
WABENO TOWN
50
GREEN LAKE TOWN
50
MACKFORD TOWN
50
MARQUETTE TOWN
50
ST MARIE TOWN
50
SENECA TOWN
50
ARENA TOWN
50
8RIGHAM TOWN
50
CLYOE TOWN
50
OCDGEVILLE TOWN
50
HIGHLANO TOWN
50
LINDEN TOWN
50
MIFFLIN TOWN
50
MINERAL POINT TOWN
50
MOSCOW TOWN
50
PULASKI TOWN
50
WALDWICK TOWN
50
ANDERSON TOWN
50
CAREY TOWN
50
GURNEY TOWN
50
KIMBALL TOWN
50
KNIGHT TOWN
50
PENCE TOWN
50
SAXON TOWN
50
AHNAPEE TOWN
50
CARLTON TOWN
50
CASCO TOWN
50
FRANKLIN TOWN
50
LINCOLN TOWN
50
LUXEMBURG TOWN
50
RED RIVER TOWN
50
WEST KEWAUNEE TOWN
50
ARGYLE TOWN
50
BENTON TOWN
50
DARLINGTON TOWN
50
ELK GROVE TOWN
50 FAYETTE TOWN
50
KENOALL TOWN
50
LAMONT TOWN
50
NEW DIGGINGS TOWN
50
SEYMOUR TOWN
50
SHULLSBURG TOWNSHIP
50
WAYNE TOWN
50
WHITE OAK SPRINGS TOWN
50
WILLOW SPRINGS TOWN
TREASURY
05/23/78 AT 31:25
U.S. DEPARTMENT
PAGE299
OF THE
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
50 WIOTA TOWN
50
NEVA TOWN
50
NORWOOD TOWN
50
PECK TOWN
50
VILAS TOWN
50
HARDING TOWN
50
RUSSELL TOWN
50
SCMO TOWN
50
CATO TOWN
50
KOSSUTH TOWN
50
LIBERTY TOWN
50
MANITOWOC TOWN
50
MISHICOT TOWN
50
TWO CREEKS TOWN
50
TWO RIVERS TOWN
50
BERLIN TOWN
50
8RIGHT0N TOWN
50
CASSEL TOWN
50
CLEVELAND TOWN
50
DAY TOWN
50
EASTON TOWN
50
EAU PLEINE TCWN
50
EMMET TOWN
50
FRANZEN TOWN
50
GREEN VALLEY TOWN
50
HALSEY TOWN
50
HEWITT TOWN
50
HCLTON TOWN
50
HULL TOWN
50
JOHNSON TOWN
50
MAINE TOWN
50
MARATHON TOWN
50
RIB FALLS TOWN
50
REITBROC* TOWN
50
SPENCER TOWN
50
WAUSAU TOWN
50
WIEN TOWN
50
BUFFALO TOWN
50
CRYSTAL LAKE TOWN
50
DOUGLAS TOWN
50
HARRIS TOWN
50
NESHKORO TOWN
50
NEWTON TOWN
50
OXFORD TOWN
50
PACKWAUKEE TCWN
50
SHIELDS TOWN
TREASURY
.,^a AT ^i-7S
05/25/78 A ; / s ; - ^ p A R T M E N T
PAGE300
0F
THE
DISTRESSED AREA ELIGIBILITY TE'ST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
50 SPRINGFIELD TOWN
50
ANGELO TOWN
50 CLIFTON TOWN
50 GLENDALE TOWN
50 GRANT TCWN
50 GREENFIELD TOWN
50 JEFFERSON TOWN
50 LAFAYETTE TOWN
50
NEW LYME TOWN
50
PORTLAND TOWN
50
RIDGEVILLE TOWN
50
SCOTT TOWN
50
SHELDON TOWN
50
SPARTA TOWN
50 WELLINGTON TOWN
50
WELLS TCWN
50
WILTON TOWN
50
BAGLEY TOWN
50
BRAZEAU TOWN
50 LENA TOWN
50
LITTLE RIVER TOWN
50
MAPLE VALLEY TOWN
50
OCONTO FALLS TOWN
50
SPRUCE TOWN
50
STILES TOWN
50
UNOERHILL TOWN
50
CLAM FALLS TOWN
50
CLEAR LAKE TOWN
50 FARMINGTON TOWN
50
MCKINLEY TOWN
50
AKAN TOWN
50
BLOOM TOWN
50
8UENA VISTA TOWN
50
OAYTON TOWN
50
EAGLE TOWN
50 FOREST TOWN
50
HENRIETTA TOWN
50
ITHACA TOWN
50
MARSHALL TOWN
50
RICHWOOD TOWN
50
ROCKBRIDGE TOWN
50
SYLVAN TOWN
50
WESTFORD TOWN
50
AVON TOWN
50
CENTER TOWN
50
JANESVILLE TOWN
TREASURY
05/23/78 AT 0 1 : 2 5
U.S. DEPARTMENT
PAGE301
OF THE TREASURY
DISTRESSED AREA ELIGIBILITY
(ELIGIBLE
STATE
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
TITLE
JOHNSTOWN TOWN
LIMA TOWN
NEWARK TOWN
PORTER TOWN
ROCK TOWN
SPRING VALLElY TOWN
ATLANTA TOWN
BIG BEND TOWN
BIG FALLS TOWN
CEOAR RAPIDS TOWN
DEWEY TOWN
FLAMBEAU TOWN
GRANT TOWN
GROW TCWN
HAWKINS TOWN
HUBBARD TOWN
LAWRENCE TOWN
MURRY TOWN
RICHLAND TOWN
RUSK TOWN
SOUTH FORK TOWN
STRICKLAND TOWN
STUBBS TOWN
THORNAPPLE TOWN
TRUE TOWN
WASHINGTON TOWN
WILKINSON TOWN
WILLARD TCWN
WILSON TOWN
BARA800 TOWN
BEAR CREEK TOWN
DELLONA TCWN
DELTON TOWN
EXCELSIOR TOWN
FAIRFIELJ TOWN
FRANKLIN TOWN
FREEDOM TOWN
GREENFIELD TOWN
HONEY CREEK TOWN
IRONTON TOWN
LA VALLE TOWN
MERRIMAC TOWN
SPRING GREEN TOWN
SUMPTER
TOWN
TROY TOWN
WASHINGTON TOWN
GOVERNMENTS)
TEST
^ .«.oc
05/23/76 A T H . 2 5 p A R [ M £ N T
PAGE332
op
DISTRESSED AREA ELIGIBILITY TEIST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
50 WESTFIELD TOWN
50 WINFIELD TOWN
50 WOODLANO TOWN
50
RADISSON TOWN
50 WEIRGOR TOWN
50 BELLE PLAINE TOWN
50 FAIRBANKS TOWN
50 GRANT TOWN
50 GREEN VALLEY TOWN
50 HERMAN TOWN
50
MORRIS TOWN
50 NAVARINO TOWN
50 PELLA TOWN
50
RED SPRING TOWN
50 SENECA TOWN
50 WAUKECHCN TOWN
50 HUTCHINS TOWN
50 GFEENBUSH TOWN
50
LIMA TOWN
50 MOSEL TOWN
50 AURORA TOWN
50 CLEVELAND TOWN
50 GOODRICH TOWN
50 GRCVER TOWN
50 HCLWAY TOWN
50 MCKINLEY TOWN
50 MAPLEHURST TOWN
50 MCLITCR TOWN
50 TAFT TOWN
50 CLINTON TOWN
50 COON TOWN
50 FOREST TOWN
50 GENOA TOWN
50 JEFFERSON TOWN
50 LIBERTY TOWN
50 STARK TOWN
50 STERLING TOWN
50 UNION TOWN
50 VIROQUA TOWN
50 WHEATLAND TOWN
50 WHITESTOWN TOWN
50 LAC DU FLAMBEAU TOWN
50 PHELPS TOWN
50 DELAVAN
WASHINGTON
DARIEN TOWN
TOWNTOWN
^
TREASURy
05/23/78 AT 31:25
U.S. DEPARTMENT OF THE
PAGE303
TREASURY
DISTRESSED AREA ELIGIBILITY TEST
(ELIGIBLE GOVERNMENTS)
STATE TITLE
50 GENEVA TOWN
50
SHARON TOWN
50
BARRONETT TOWN
50
BASHAW TOWN
50
BASS LAKE TOWN
50
BEAVER BROOK TOWN
50
BIRCHWOOD TOWN
50
BROOKLYN TOWN
50
CASEY TOWN
50
CHILOG TOWN
50
CRYSTAL TOWN
50
EVERGREEN TOWN
50
FROG CREEK TOWN
50
GULL LAKE TOWN
50
LONG LAKE TOWN
50
MINCNG TOWN
50
SARONA TOWN
50
SPOONER TOWN
50
SPRINGBROOK TOWN
50
STINNETT TOWN
50
STONE LAKE TOWN
50
BEAR CREEK TOWN
50
OUPONT TOWN
50
LARRABEE TOWN
50
LITTLE WOLF TOWN
50
MATTESON TOWN
50
UNION TOWN
50
WEYAUWEGA TOWN
50
WYOMING TOWN
50
AURORA TOWN
50
3L00MFIELD TOWN
50
COLOMA TOWN
50
DEERFIELD TOWN
50
LEON TOWN
50
OASIS TOWN
50
PCYSIPPI TOWN
50
ROSE TOWN
50
WARREN TOWN
STATE = 50: 544 RECORDS
FINAL TOTALS: 12142 RECORDS
U. S. GOVERNMENT PRINTING OFFICE : 1978 O - 266-274
FOR IMMEDIATE RELEASE
May 26, 1978
Contact: Alvin M. Hattal
202/566-8381
TREASURY ACTS ON ANTIDUMPING CASES
INVOLVING IMPORTS OF STEEL WIRE
STRAND FROM JAPAN AND INDIA
The Treasury Department said today that it has tentatively determined that steel wire strand for prestressed
concrete from Japan is being sold in the United States at
less than fair value.
In another action, the Treasury Department announced
that it has made a final determination that steel wire strand
for prestressed concrete from India is being sold here at less
than fair value.
Appraisement is being withheld on imports from both
countries. Under the Antidumping Actf the Secretary of the
Treasury is required to withhold appraisement whenever he
has reasonable cause to believe or suspect that "sales at less
than fair value" are taking place. Sales at less than fair
value, as defined by the Antidumping Act, generally occur when
imported merchandise is sold in the United States for less
than in the home market or in third countries.
Withholding of appraisement means that the valuation for
customs duty purposes of the goods is suspended until completion of the investigation, thus allowing any dumping duties
that are ultimately imposed to be levied on those imports.
The Indian case is being referred to the U. S. International
Trade Commission (ITC), which must decide within 90 days whether
a U. S. industry is being, or is likely to be, injured by these
sales. If the ITC finds that one is, dumping duties will be
assessed.
A final Treasury decision in the Japanese case must be
made by August 31, 1978.
Notice of these actions will appear in the Federal
Register of May 31, 1978.
Imports of steel wire strand for prestressed concrete from
Japan amounted to $19.6 million during the period June-November
1977. Imports of this merchandise from India were valued at
$249,000 during the period January-June 1977.
B-947
o0o
mtment of theJREASURY
HNGTON, D.C. 20220
TELEPHONE 566-2041
FOR R E L E A S E
TUESDAY, M A Y 30, 1978
AMs
S T A T E M E N T BY S E C R E T A R Y OF T H E T R E A S U R Y
W. MICHAEL BLUMENTHAL
The A p p r o p r i a t i o n s C o m m i t t e e of the H o u s e of
R e p r e s e n t a t i v e s t h i s p a s t w e e k r e p o r t e d the F o r e i g n
A s s i s t a n c e and R e l a t e d P r o g r a m s A p p r o p r i a t i o n s Bill,
including $2,628 m i l l i o n for the i n t e r n a t i o n a l
f i n a n c i a l i n s t i t u t i o n s — the W o r l d B a n k f a m i l y , the
I n t e r - A m e r i c a n D e v e l o p m e n t B a n k , the A s i a n D e v e l o p m e n t B a n k and the A f r i c a n D e v e l o p m e n t F u n d .
This figure is $876 million less than the Adm i n i s t r a t i o n ' s r e q u e s t . W e b e l i e v e that the C o m m i ttee's r e c o m m e n d a t i o n is the a b s o l u t e m i n i m u m a m o u n t
w h i c h is c o n s i s t e n t w i t h t h e i n t e r e s t s of the U n i t e d
States in the d e v e l o p i n g w o r l d , and w i t h our d e s i r e
to bring a b o u t c o n s t r u c t i v e p o l i c y c h a n g e s in the international f i n a n c i a l i n s t i t u t i o n s . W e w i l l u r g e the
House of R e p r e s e n t a t i v e s to r e s i s t a n y a d d i t i o n a l
r e d u c t i o n s w h i c h m a y b e p r o p o s e d o n the f l o o r .
The Administration strongly supports the international f i n a n c i a l i n s t i t u t i o n s . W e b e l i e v e that
these o r g a n i z a t i o n s e f f e c t i v e l y s e r v e a b r o a d r a n g e
of U . S . p o l i t i c a l , s e c u r i t y , e c o n o m i c and h u m a n i t a r i a n
interests b e c a u s e :
— they are extremely effective channels of dev e l o p m e n t a s s i s t a n c e to the p o o r e s t
in the w o r l d ;
countries
— they assure burden-sharing among donor countries;
o t h e r s p u t up $3 for e v e r y $1 c o n t r i b u t e d by the
United S t a t e s ;
— they spend $2 in the United States for every $1
w e p a y into them.
We have therefore urged the Congress, both in
formal t e s t i m o n y and in i n f o r m a l d i s c u s s i o n s w i t h
B-948
FOR IMMEDIATE RELEASE
May 26, 1978
Contact: Alvin M. Hattal
202/566-8381
TREASURY ACTS ON ANTIDUMPING CASES
INVOLVING IMPORTS OF STEEL WIRE
STRAND FROM JAPAN AND INDIA
The Treasury Department said today that it has tentatively determined that steel wire strand for prestressed
concrete from Japan is being sold in the United States at
less than fair value.
In another action, the Treasury Department announced
that it has made a final determination that steel wire strand
for prestressed concrete from India is being sold here at less
than fair value.
Appraisement is being withheld on imports from both
countries. Under the Antidumping Act, the Secretary of the
Treasury is required to withhold appraisement whenever he
has reasonable cause to believe or suspect that "sales at less
than fair value" are taking place. Sales at less than fair
value, as defined by the Antidumping Act, generally occur when
imported merchandise is sold in the United States for less
than in the home market or in third countries.
Withholding of appraisement means that the valuation for
customs duty purposes of the goods is suspended until completion of the investigation, thus allowing any dumping duties
that are ultimately imposed to be levied on those imports.
The Indian case is being referred to the U. S. International
Trade Commission (ITC), which must decide within 90 days whether
a U. S. industry is being, or is likely to be, injured by these
sales. If the ITC finds that one is, dumping duties will be
assessed.
A final Treasury decision in the Japanese case must be
made by August 31, 1978.
Notice of these actions will appear in the Federal
Register of May 31, 1978.
Imports of steel wire strand for prestressed concrete from
Japan amounted to $19.6 million during the period June-November
1977. Imports of this merchandise from India were valued at
$249,000 during the period January-June 1977.
B-947
o0o
mmentoftheJREASURY
NGTON, D.C. 20220
TELEPHONE 566-2041
FOR R E L E A S E
TUESDAY, MAY 30, 1978
AMs
S T A T E M E N T BY S E C R E T A R Y OF T H E T R E A S U R Y
W. MICHAEL BLUMENTHAL
The A p p r o p r i a t i o n s C o m m i t t e e of the H o u s e of
R e p r e s e n t a t i v e s this p a s t w e e k r e p o r t e d the F o r e i g n
A s s i s t a n c e and R e l a t e d P r o g r a m s A p p r o p r i a t i o n s Bill,
including $2,628 m i l l i o n for the i n t e r n a t i o n a l
f i n a n c i a l i n s t i t u t i o n s — the W o r l d B a n k family, the
I n t e r - A m e r i c a n D e v e l o p m e n t B a n k , the A s i a n D e v e l o p m e n t B a n k and the A f r i c a n D e v e l o p m e n t F u n d .
This figure is $876 million less than the Adm i n i s t r a t i o n ' s r e q u e s t . W e b e l i e v e that the C o m m i ttee's r e c o m m e n d a t i o n is the a b s o l u t e m i n i m u m a m o u n t
w h i c h is c o n s i s t e n t w i t h the i n t e r e s t s of the U n i t e d
States in the d e v e l o p i n g w o r l d , and w i t h our d e s i r e
to bring a b o u t c o n s t r u c t i v e p o l i c y c h a n g e s in the international f i n a n c i a l i n s t i t u t i o n s . W e w i l l u r g e the
House of R e p r e s e n t a t i v e s to r e s i s t any a d d i t i o n a l
r e d u c t i o n s w h i c h m a y be p r o p o s e d o n the f l o o r .
The Administration strongly supports the international f i n a n c i a l i n s t i t u t i o n s . W e b e l i e v e that
these o r g a n i z a t i o n s e f f e c t i v e l y s e r v e a broad r a n g e
of U . S . p o l i t i c a l , s e c u r i t y , e c o n o m i c and h u m a n i t a r i a n
interests b e c a u s e :
— they are extremely effective channels of dev e l o p m e n t a s s i s t a n c e to the p o o r e s t
in the w o r l d ;
countries
— they assure burden-sharing among donor countries;
o t h e r s p u t up $3 for e v e r y $1 c o n t r i b u t e d by the
United S t a t e s ;
— they spend $2 in the United States for every $1
w e pay into them.
We have therefore urged the Congress, both in
formal t e s t i m o n y and in i n f o r m a l d i s c u s s i o n s w i t h
B-948
- 2 many individual members, to support a level of appropriations as close as possible to the Administration's request of $3 ,5 05 million.
In its report, the Appropriations Committee also
decided not to recommend any legislative restrictions
on the use of U.S. funds by the international financial
institutions. Under provisions of their charters, the
banks cannot accept restricted funds. Passage of legislation with such restrictions would have the effect
of taking the United States out of the development banks.
This, in turn, could remove the banks from the international development process.
The Committee's decision in this respect was particularly significant, and is gratifying because of the
high priority the Administration places on continued
U.S. participation and support for the international
financial institutions.
oOo
tpartmentoftheTREASURY
SHINGTON, D.C. 20220
TELEPHONE tr6p>041
Contact:
FOR IMMEDIATE RELEASE
Carolyn M. Johnston
(202) 634-5377
May 23, 1978
SELLARS REAPPOINTED CHAIRMAN OF SAVINGS BONDS COUNCIL
Richard B. Sellars, Chairman of the Finance Committee of
the Board, Johnson § Johnson, New Brunswick, N.J., has
accepted reappointment as the National Chairman of the Savings
Bonds Volunteer State Chairmen's Council through December 3 1 ,
1979. The appointment was made by Secretary of the Treasury
W. Michael Blumenthal.
Mr. Sellars first became National Chairman of the Savings
Bonds Council on January 1, 1977. On reappointing Mr. Sellars,
Secretary Blumenthal said, "Encouraging millions of Americans
to save for themselves through the U.S. Savings Bonds program
is as important today as ever to help reduce the inflationary
pressures in our economy.
I thank you for your outstanding
leadership and support in th:is vital effort."
£?
^
m
The 51-member Savings Bonds Volunteer State liftawjnen
Council consists of leading businessmen who head tJLelvolo>i£.teer
program for the sale and retention of Savings Bonds in t'fw&ir
state. They are appointed to two-year terms by the Secretary
of the Treasury.
- ^ J o^<
Sellars, a 39-year veteran of Johnson § Johnson, has been
President of Johnson § Johnson Worldwide and ChaTrman of the
Board and Chief Executive Officer, Johnson § Johnson. In J
addition to his present business activity, he is active in
many civic and professional groups.
B-949
o
FOR RELEASE AT 4:00 P.M.
May 30, 1978
TREASURY'S WEEKLY BILL OFFERING
The Department of the Treasury, by this public notice,
invites tenders for two series of Treasury bills totaling
approximately $5,600 million, to be issued June 8, 1978.
This offering will not provide new cash for the Treasury as the
maturing bills are outstanding in the amount of $ 5,600 million.
The two series offered are as follows:
91-day bills (to maturity date) for approximately $2,200
million, representing an additional amount of bills dated
March 9, 1978,
and to mature September 7, 1978 (CUSIP No.
912793 T2 2), originally issued in the amount of $3,407 million,
the additional and original bills to be freely interchangeable.
182-day bills for approximately $3,400 million to be dated
June 8, 1978,
and to mature December 7, 1978
(CUSIP No.
912793 U7 9).
Both series of bills will be issued for cash and in
exchange for Treasury bills maturing June 8, 1978.
Federal Reserve Banks, for themselves and as agents of foreign
and international monetary authorities, presently hold $2,909
million of the maturing bills. These accounts may exchange bills
they hold for the bills now being offered at the weighted average
prices of accepted competitive tenders.
The bills will be issued on a discount basis under competitive
and noncompetitive bidding, and at maturity their par amount will
be payable without interest. Except for definitive bills in the
$100,000 denomination, which will be available only to investors
who are able to show that they are required by law or regulation
to hold securities in physical form, both series of bills will be
issued entirely in book-entry form in a minimum amount of $10,000
and in any higher $5,000 multiple, on the records either of the
Federal Reserve Banks and Branches, or of the Department of the
Treasury.
Tenders will be received at Federal Reserve Banks and
Branches and at the Bureau of the Public Debt, Washington,
0. C. 20226, up to 1:30 p.m., Eastern Daylight Saving time,
Monday, June 5, 1978.
Form PD 4632-2 (for 26-week
series) or Form PD 4632-3 (for 13-week series) should be used
to submit tenders for bills to be maintained on the book-entry
records of the Department of the Treasury.
B-950
-2Each tender must be for a minimum of $10,000. Tenders
over $10,000 must be in multiples of $5,000. In the case of
competitive tenders the price offered must be expressed on
the basis of 100, with not more than three decimals, e.g.,
99.925. Fractions may not be used.
Banking institutions and dealers who make primary
markets in Government securities and report daily to the
Federal Reserve Bank of New York their positions in and
borrowings on such securities may submit tenders for account
of customers, if the names of the customers and the amount
for each customer arie furnished. Others are only permitted
to submit tenders for their own account.
Payment for the full par amount of the bills applied for
must accompany all tenders submitted for bills to be maintained
on the book-entry records of the Department of the Treasury. A
cash adjustment will be made on all accepted tenders for the
difference between the par payment submitted and the actual
issue price as determined in the auction.
No deposit need accompany tenders from incorporated banks
and trust companies and from responsible and recognized dealers
in investment securities for bills to be maintained on the
book-entry records of Federal Reserve Banks and Branches, or for
bills issued in bearer form, where authorized. A deposit of 2
percent of the par amount of the bills applied for must
accompany tenders for such bills from others, unless an express
guaranty of payment by an incorporated bank or trust company
accompanies the tenders.
Public announcement will be made by the Department of the
Treasury of the amount and price range of accepted bids.
Competitive bidders will be advised of the acceptance or
rejection of their tenders. The Secretary of the Treasury
expressly reserves the right to accept or reject any or all
tenders, in whole or in part, and the Secretary's action
shall be final. Subject to these reservations, noncompetitive
tenders for each issue for $500,000 or less without stated price
from any one bidder will be accepted in full at the weighted
average price (in three decimals) of accepted competitive bids
for the respective issues.
Settlement for accepted tenders for bills to be maintained on the book-entry records of Federal Reserve Banks
and Branches, and bills issued in bearer form must be made
or completed at the Federal Reserve Bank or Branch or at the
Bureau of the Public Debt on June 8, 1978,
in cash or
other immediately available funds or in Treasury bills maturing
June 8, 1978.
Cash adjustments will be made for
differences
accepted in exchange
between the
andpar
thevalue
issueof
price
the maturing
of the new
bills
bills.
-3Under Sections 454(b) and 1221(5) of the Internal Revenue
Code of 1954 the amount of discount at which these bills are
sold is considered to accrue when the bills are sold, redeemed
or otherwise disposed of, and the bills are excluded from
consideration as capital assets. Accordingly, the owner of these
bills (other than life insurance companies) must include in his
or her Federal income tax return, as ordinary gain or loss, the
difference between the price paid for the bills, whether on
original issue or on subsequent purchase, and the amount actually
received either upon sale or redemption at maturity during the
taxable year for which the return is made.
Department of the Treasury Circulars, No. 418 (current
revision), Public Debt Series - Nos. 26-76 and 27-76, and this
notice, prescribe the terms of these Treasury bills and govern
the conditions of their issue. Copies of the circulars and
tender forms may be obtained from any Federal Reserve Bank or
Branch, or from the Bureau of the Public Debt.
oOo
FOR IMMEDIATE RELEASE
Tuesday, May 30, 1978
Contact:
Alvin Hattal
566-8381
TREASURY ANNOUNCES PRELIMINARY
COUNTERVAILING DUTY ACTIONS AGAINST
CERTAIN TEXTILE PRODUCTS FROM EIGHT COUNTRIES
The Treasury Department today announced its preliminary
determination that seven countries are subsidizing their
exports of textile mill products and men's and boys' apparel.
Those countries are Argentina, Brazil, Colombia, India,
Republic of China, Philippines and Uruguay.
The Treasury Department investigation was undertaken
as a result of a petition filed by the Amalgamated Clothing
and Textile Workers' Union in November 1977.
Under the Countervailing Duty Law, the Treasury Secretary
is required to assess an additional Customs duty that equals
the amount of a "bounty or grant" (subsidy) that has been
found to be paid on imported merchandise.
Treasury's preliminary investigation found a variety of
subsidies subject to countervailing duties, ranging from
export subsidies to regional aids, preferential export
financing, and special income tax benefits for export enterprises. Some tentative determinations were made without the
detailed information necessary from the foreign government
concerned to make a definitive decision on whether the
programs providing a subsidy are being used by that countryfs
textile industry. The Treasury must make a final determination
no later than November 7, 1978.
The Republic of Korea was also found to be subsidizing
its textile exports but the amounts received are so
inconsequential that the assessment of countervailing duties
would not be warranted.
Notice of this action will appear in the Federal Register
of June 1, 1978.
Import volume by value is not available at this time
but is estimated to be approximately $700 million in 1977.
0 o 0
B-9S1
tyartmentoftheTREASURY
\SHINGTON, D.C. 20220
TELEPHONE 566-2041
FOR IMMEDIATE RELEASE
May 2 7 , 1978
Contact:
Alvin M. Hattal
202/566-8381
TREASURY DEPARTMENT DENIES IT HAS
WITHDRAWN PROPOSED FIREARMS REGULATIONS
The Treasury Department today denied reports that it
has withdrawn its proposals for firearms regulations to m a k e
it easier to trace firearms used in crimes and to identify
those selling guns to the criminal m a r k e t .
Assistant Secretary of the Treasury Richard J. Davis
said, "The Treasury Department has not w i t h d r a w n or revised
the proposed regulations it published o n M a r c h 2 1 . B e c a u s e
of great public interest in the issue and b e c a u s e of the
widespread incorrect information about the n a t u r e of these
proposals that has been generated by some g r o u p s , w e h a v e
extended the comment period on them until June 3 0 .
Davis repeated,what Jie said in his May 4 testimony.±>.aT ...
fore the House Judiciary Subcommittee on C r i m e : that n o funds
± o implement these regulations w e r e . included__in the-fiscal
year 1979 Administration b u d g e t and that any decision to
implement them would require jseekinq funds from Conaress to do.
so.
This position w a s also communicated to Senator L a w t o n
Chiles (D-Fla.), Chairman of the Treasury A p p r o p r i a t i o n s
Subcommittee by Treasury Deputy Secretary Robert Carswell
when, in a May 2 3 , 1 9 7 8 , l e t t e r , h e w r o t e : "If a d e c i s i o n is
made to implement any of [these regulations] , it w o u l d b e
necessary to seek either a supplementary a p p r o p r i a t i o n for
1979 or include a request for such funds in our 1980 s u b m i s sion. We w i l l not implement these p r o p o s a l s w i t h o u t securing
from Congress the funds to do s o . "
B-952
tyartmentoflheJREASURY
IASHINGTON, D.C. 20220
TELEPHONE 566-2041
May 31, 1978
FOR IMMEDIATE RELEASE
RESULTS OF AUCTION OF 4-YEAR 1-MONTH TREASURY NOTES
The Department of the Treasury has accepted $2,257 million of
$5,026 million of tenders received from the public for the 4-year
1-month notes, Series H-1982, auctioned today.
The range of accepted competitive bids was as follows:
Lowest yield
Highest yield
Average yield
8.24%1/
8.28%
8.27%
x
The interest rate on the notes will be 8-1/4%.
the above yields result in the following prices:
Low-yield price 100.013
High-yield price
Average-yield price
At the 8-1/4% rate,
99.877
99.911
The $2,257 million of accepted tenders includes $508 million of
noncompetitive tenders and $1,749 million of competitive tenders from
private investors, including 9 % of the amount of notes bid for at
the high yield.
In addition to the $2,257 million of tenders accepted in the
auction process, $300 million of tenders were accepted at the average
price from Federal Reserve Banks as agents for foreign and international
monetary authorities for new cash.
1/
Excepting 6 tenders totaling $3,560,000
B-953
Contact:
FOR IMMEDIATE RELEASE
Carolyn Johnston
(202) 634-5377
JUNE 1, 1978
TREASURY SECRETARY BLUMENTHAL NAMES ROGER W. MULLIN, JR.
SAVINGS BONDS CHAIRMAN FOR PENNSYLVANIA
Roger W. Mullin, Jr., Chairman of the Board, Mack
Trucks, Inc., Allentown, has been appointed Volunteer State
Chairman for the Savings Bonds Program by Secretary of the
Treasury W. Michael Blumenthal, effective immediately.
He succeeds Henry J. Nave, former Chairman of the
Board, Mack Trucks, Inc., Allentown.
Mr. Mullin will head a committee of business, labor,
financial, media, and governmental leaders who — in cooperation with the Savings Bonds Division — assist in
promoting the sale of Savings Bonds.
Mr. Mullin received an L.L.B. Degree from Fordham
University Law School, and an L.L.M. Degree from George
Washington University Law School. During World War II,
he was with the U.S. Army Military Intelligence Service,
and later joined several New York law firms.
Mr. Mullin joined Mack Trucks, Inc. in 1961 as
Executive Assistant to the President. He was elected Vice
President, Secretary, and General Counsel in 1962, and
joined the Mack Board of Directors in 1967. He became
Vice Chairman in August 1974, and assumed his present
position in August 1976.
B-954
kpormentoftheTREASURY
|
LEPHONE 566-2041
WASHINGTON, OX. 20220
June 1, 1978
FOR IMMEDIATE RELEASE
RESULTS OF TREASURY'S 20-DAY BILL AUCTION
Tenders for $6,005 million of 20-day Treasury bills to be issued
on June 2, 1978, and to mature June 22, 1978, were accepted at the
Federal Reserve Banks today. The details are as follows:
RANGE OF ACCEPTED COMPETITIVE BIDS:
Price
High - 99.609
Low
99.604
Average 99.605
Discount Rate
7.038%
7.128%
7.110%
Investment Rate
(Equivalent Coupon-Issue Yield)
7.
7.26%
Tenders at the low price were allotted 80%.
TOTAL TENDERS RECEIVED AND ACCEPTED BY
FEDERAL RESERVE DISTRICTS:
Location
Received
Accepted
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
$ 91,000,000
9,647,000,000
$ 85,800,000
4,764,200,000
69,000,000
219,000,000
15,000,000
1,076,000,000
40,000,000
35,000,000
32,000,000
47,000,000
101,000,000
4,000,000
229,800,000
27,000,000
35,000,000
27,000,000
1,061,000,000
684,000,000
TOTAL
$12,285,000,000
$6,004,800,000
B-955
FOR IMMEDIATE RELEASE
June 2, 1978
Contact:
Robert E. Nipp
202/566-5328
TREASURY ANNOUNCES EXTENSION
OF DUMPING INVESTIGATION
The Treasury announced today that it was extending for
three months its investigation of alleged dumping of certain
steel mill products from six European countries. A petition
filed in December 1977 by National Steel Corporation claimed
that cold rolled and galvanized sheet was being imported
into the United States at less than "fair value" within the
meaning of the Antidumping Act from Belgium, Holland, Germany,
Italy, France and the United Kingdom. More than 30 companies
are involved in the sales of this merchandise and the added
time will be needed to analyze the volumnious data being
developed.
The announcement also notes that on May 31, 1978,
National Steel withdrew, without prejudice to possible
later reinstatement, its claims that the products under
investigation were being sold at less than their cost of
production.
A copy of the Antidumping Notice of Extension of
Investigatory Period is attached.
B-956
DEPARTMENT OF THE TREASURY
OFFICE OF THE SECRETARY
COLD ROLLED AND GALVANIZED CARBON STEEL SHEETS
FROM THE UNITED KINGDOM, WEST GERMANY, FRANCE,
ITALY, THE NETHERLANDS AND BELGIUM
ANTIDUMPING
NOTICE OF EXTENSION OF INVESTIGATORY PERIOD
AGENCY:
U.S. Treasury Department
ACTION:
Extension of Antidumping Investigatory Period
SUMMARY:
This notice is to advise the public that the Secretary
of the Treasury has determined that a tentative determination
as to whether sales at less than fair value of cold rolled and
galvanized carbon steel sheet from the United Kingdom,
West Germany, France, Italy, the Netherlands and Belgium have
occurred cannot reasonably be made in six months.
This
decision will be made in not longer than nine months from
the date of the initiation of the investigation.
EFFECTIVE DATE:
(Date of publication in the FEDERAL REGISTER)
FOR FURTHER INFORMATION CONTACT:
Mr. David P. Mueller, U.S. Customs Service, Office of
Operations, Duty Assessment Division, Technical Branch,
1301 Constitution Avenue, NW., Washington, D.C. 20229,
telephone 202 (566-5492).
-2SUPPLEMENTARY INFORMATION:
On October 25, 1977, information was received in proper
form pursuant to sections 153.26 and 153.27, Customs Regulations (19 CFR 153.26 and 153.27) from counsel on behalf of
National Steel Corporation indicating that cold rolled and galvanized carbon steel sheets from Italy, Belgium, France,
West Germany, the Netherlands and the United Kingdom are being,
or are likely to be, sold at less than fair value within the
meaning of the Antidumping Act, 1921 as amended (19 U.S.C.
160 et. seq.) (hereinafter referred to as "the Act"). On
the basis of this information and subsequent preliminary
investigation by the Customs Service, an "Antidumping Proceeding Notice" was published in the FEDERAL REGISTER of
December 2, 1977. That notice stated that:
"If? during the course of the investigation
being initiated it is found that actual home
market, or if appropriate, third country transactions, have been at prices below the Davignon
Plan or list prices for these products, a
comparison of these lower prices will be made
with the cost of production. If below cost sales
have occurred in substantial quantities and over
an extended period of time at prices not permitting the recovery of all costs within a
reasonable period of time, then a cost of production investigation would be deemed appropriate
and would be initiated. The Customs Service
will, accordingly, be directed to solicit information relevant to these considerations as
promptly as possible from all interested persons."
Petitioner thereafter filed supplemental information supporting
its claims of sales below cost. On May 31, 1978, petitioner
submitted a letter withdrawing the cost of production (but
-3not the pricing) allegations made in its petition and
in supplemental information filed on January 16, 1978,
without prejudice to a subsequent filing of these claims.
For purposes of this notice, the term "cold rolled and
galvanized carbon steel sheets" means those items provided
for in item number 608.87, 608.94, and 608.95 of the Tariff
Schedules of the United States.
The merchandise in question is made and sold in a large
number of sizes and forms in numerous individual transactions by 30 separate companies in the European countries
involved and in the United States.
Further, a variety of claims
for adjustments have been made with respect to many of the
transactions to be compared.
Additional time is needed to
analyze this data.
Accordingly pursuant to section 201(b)(2) of the Act
(19 U.S.C. 160(b)(2)), notice is hereby given that the
determination provided for in section 201(b)(1) of the
Act (19 U.S.C. 160(b)(1)) cannot reasonably be made within
six months.
The determination under section 201(b)(1) of
the Act (19 U.S.C. 160(b)(1)) will therefore be made within
no more than nine months.
This notice is published pursuant to section 201(b)(2)
of the Act (19 U.S.C. 160(b)(2)).
inefal Counsel of the Treasury
-JUN 2 1978
FOR IMMEDIATE RELEASE
June 2, 1978
Contact:
Alvin M. Hattal
202/566-8381
TREASURY EXTENDS RECORD-KEEPING
DEADLINE FOR CERTIFICATES OF DEPOSIT
The Treasury Department today announced that it
is delaying until June 19 enforcement of its regulations requiring banks and other financial institutions
to maintain records of certificates of deposit. Enforcement had been scheduled to start June 1.
Under Secretary Bette B. Anderson said the delay
was granted after a number of banks indicated they
would need additional time to change their recordkeeping procedures. Several thousand banks and savings
and loan associations will be affected.
The new provisions are intended to discourage the
use of certificates of deposit, including so-called
"honor" bonds, for illegal purposes.
o
B-957
0
o
[4810-25]
TITLE 31 - MONEY AND
FINANCE: TREASURY
Chapter 1 - Monetary Offices,
Department of the Treasury
Part 103 - FINANCIAL RECORDKEEPING AND REPORTING OF
CURRENCY AND FOREIGN TRANSACTIONS
NOTICE
The Treasury Department announced today that the
enforcement of those provisions in the May 9, 1978,
amendment to 31 CFR 103.34, which require a financial
institution selling or redeeming certificates of deposit
to maintain additional records of the transactions
beginning June 1, 1978, will not be enforced with respect
to transactions completed prior to June 19.
This policy announcement was made in response to
requests made on behalf of a number of banks which have
indicated that the publication of the amendment in the May 19
Federal Register did not allow them enough time to make
necessary procedural changes before June 1. The delay is
intended to provide relief for those financial institutions,
as well as others that have been unable to meet the June 1
effective date.
Date: ., " ** ; ':^g
Bette B. Anderson
Under Secretary of the Treasury
FOR IMMEDIATE RELEASE
June 2, 1978
Contact:
Alvin M. Hattal
202/566-8381
TREASURY ANNOUNCES TWO PRELIMINARY
COUNTERVAILING DUTY ACTIONS
ON CERTAIN CHEMICAL PRODUCTS FROM ISRAEL
The Treasury Department today announced its preliminary
determination that the Government of Israel is subsidizing
its exports of diuron and bromine and brominated compounds.
The action regarding diuron was taken pursuant to a
petition filed by E. I. du Pont de Nemours in June 1977.
The action regarding bromine and brominated compounds was
taken pursuant to a petition filed by Velsicol Chemical
Corporation in July 1977.
Under the Countervailing Duty Law, the Secretary of the
Treasury is required to assess an additional Customs duty
that equals the amount of a "bounty or grant" (subsidy) found
to have been paid on imported merchandise.
Under the law, Treasury must make a final decision in
the diuron case no later than June 13, 197 8, and in the bromine
case no later than July 11, 1978.
Treasury's preliminary investigation revealed subsidies
that appear at this stage to be subject to countervailing
duties including certain property tax rebates on export and
regional aids.
Notice of these actions will appear in the Federal Register
of June 5, 1978.
Imports of bromine and brominated compounds from Israel
were valued at approximately $150,000 in 1976.
Imports of diuron from Israel was valued at approximately
$500,000 in 1976.
o
B-958
0
o
FOR RELEASE ON DELIVERY
EXPECTED AT 9:30 A.M., EST
MONDAY, JUNE 5, 1978
REMARKS BY THE HONORABLE C. FRED BERGSTEN
ASSISTANT SECRETARY OF THE TREASURY
FOR INTERNATIONAL AFFAIRS
BEFORE
THE CONFERENCE BOARD
NEW YORK, NEW YORK
THE U.S. TRADE BALANCE AND AMERICAN COMPETITIVENESS IN THE
WORLD ECONOMY
The U.S. trade balance was in deficit by $31 billion
in 1977. In the first quarter of 1978, imports exceeded
exports by $11.2 billion — placing the trade deficit at an
annual rate of $45 billion. Despite the fact that our huge
earnings from international services transactions produce a
much smaller deficit on current account, the size of the
trade deficit and its persistency have raised serious
concerns about the ability of U.S. industry to compete
in world markets and I will focus on this basic question
today.
One of my conclusions will be that U.S. exporters,
as of this date, have not suffered any noticeable loss
in price competitiveness against other industrial country
suppliers. The dollar depreciation of late 1977-early
1978 has offset the decline in U.S. competitiveness
which was engendered by the dollar appreciation
and relatively poor U.S. price performance of 1974-1975,
and which has been adversely affecting U.S. trade performance
during the past couple of years.
However, price competitiveness is only one of a number of
factors in a country's export performance. Several other
important developments in the world economy — notably those
^elated to energy and to relative growth rates among the
industrial countries — have adversely affected the U.S.
trade balance. In addition, a number of dynamic advanced
developing countries (ADCs) have been sharply increasing their
B-959
- 2 international competitive position, cutting into the world
market shares of the United States (and most other industrial
countries as well). In any event, the sharp increase in our
payments for imported oil means that we will have to export
a larger share of our gross national product in the future in
order to produce a sustainable position in our external
accounts.
Thus there is a great need for the United States to
undertake major efforts to improve its export performance,
to take full advantage of the competitive opportunities which
seem to be available at this point in time. The President
indicated on April 11 that such an effort will be undertaken.
It is now in the final stages of planning and will be announced
over the next few weeks. As background for that program, and
because of the great importance of the trade balance both to
the U.S. economy and to international economic stability,
I would like to share with you in some detail our analysis
of its recent evolution.
Recent Trends in the Merchandise Trade Balance
Since the recession of 1974-75 — and the resultant
$9 billion trade surplus in 1975 — the U.S. trade balance
has deteriorated sharply and continuously.
In 1976, the balance shifted by about $18 billion to
a deficit of $9 billion. This sharp swing was primarily the
result of strong growth in the U.S. domestic economy.
Coming out of the recession trough of early 1975, the economy
grew by a strong 6 percent in GNP terms during 1976 while
overall industrial production expanded 10 percent and
production in manufacturing industries jumped 11 percent.
Capacity utilization rates during 1976 improved significantly —
up 7 percentage points (to 80 percent) according to the
Federal Reserve series, and also up 7 points (to 87 1/2
percent) on the Wharton series. This solid growth in 1976
was accompanied by a sharp 26.5 percent rise in nominal
imports. Only 3 percent of the rise resulted from price
increases, while import volume surged 23 percent. An important
part of this abnormally sharp growth was caused by inventory
rebuilding following the destocking which occurred during the
recession.
By contrast, export growth was weak. Volume expanded
about 3 1/2 percent while prices rose by a similar amount.
This nominal export rise of 7 percent was considerably slower
than the 10 percent global growth in world trade (excluding
oil). Non-agricultural exports rose only 1 1/2 percent
in volume terms between 1975 and 1976.
- 3 The U.S. merchandise trade balance continued along
these trends in 1977. Imports posted strong growth of 22 1/2
percent in value terms, 13 percent by volume. Non-petroleum
imports surged 19 percent by volume. Export performance
was again lack-luster. Total nominal exports grew only 5
percent, export volume less than 1 percent. Non-agricultural
exports were virtually unchanged in volume terms. The
combined effect was to produce the record trade deficit of
$31 billion.
The deficit again jumped sharply in the first quarter
of 1978, hitting an annual rate of $45 billion. It featured
an extraordinary surge in non-petroleum imports, however, which
we believe represented a temporary aberration. This surge
reflected J-curve effects, as non-petroleum import prices
rose over 6 percent. In addition, import shipments appear
to have accelerated as a result of last fall's anticipation
of continuing dollar depreciation and fears of new U.S. import
restrictions (including the February imposition of reference
prices for steel imports), foreign country export constraints,
the possibility of a West Coast dock strike this summer,
and a prospective ocean freight rate increase. We believe
that the first quarter deficit reflected a number of
temporary factors, all of which tended to worsen the
picture, and that the fourth quarter of last year and the
first quarter of 1978 represent the peak deficits which
the United States is likely to experience.
The moderate pickup of exports in March and April
and the accompanying 10 percent decline in the trade
deficit were a modestly encouraging sign. For the near
future, our current projections assume that foreign growth
will accelerate in the second half of 1978 and edge higher
in 1979. In addition, the effects on U.S. exports of the dollar
depreciation in 1977 and the first quarter of 1978 are
expected to grow as the year proceeds — rising by the end
of 1979 to an annual rate gain of about $7-8 billion. Export
performance will also benefit from improved conditions in
specific foreign markets important to the United States —
particularly in the developing countries such as Mexico, our
fifth largest market. All of these developments must be placed
in the longer run context of underlying international trends,
however, to discern even tentative answers to the key questions
surrounding the competitiveness of the United States in the
world economy.
Causes of the Trade Balance Decline
Why has the trade balance deteriorated so badly?
Will it continue to do so? What should American industry
and the Government do about the decline? These are all
- 4 questions of fundamental importance, which deserve
answers as straightforward as are analytically possible.
Last May, I addressed many of these same questions and outlined
some tentative conclusions on them. More recent data and
our continued analysis of the trade situation have produced
some additional insights, while generally confirming the
earlier analysis.
One of the major factors in the deteriorating trade balance
which I noted last year was of course the sharp growth in
U.S. oil imports, which expanded by $18 billion from
1975 to 1977. To be sure, some increase in oil imports (and
perhaps oil prices) inevitably accompanies economic growth.
And increased U.S. exports to oil-producing countries have
reduced the net impact of our oil imports on the trade
balance. But energy imports are a discrete element which
account for almost one-half of the deterioration in the
U.S. trade balance during the past two years.
A second major factor was the differing pace of economic
recovery among the major industrial countries. This sharp
divergence of recovery trends continued during 1977. Real
GNP in the U.S. rose by nearly 5 percent, the second straight
year of U.S. growth considerably in excess of our long-run
potential. We closed the gap of excess capacity during the
year and created three million additional jobs.
By contrast, growth in our major markets was far less
robust. Total GNP growth in the OECD area, excluding the
United States, rose only 2.7 percent in 1977 — down sharply
from the 4.7 percent growth rate of 1976 which itself was
less than U.S. growth. In the past two years, the U.S.
economy has expanded at an average rate of 5.6 percent while
the rest of the OECD grew at an average rate of only
3 3/4 percent. Only in the United States, in fact, has there
been any significant reduction in the rate of unemployment
from the trough of the 1974-1975 recession among the larger
OECD countries.
This is a sharp reversal of historical patterns. During
the 1960fs and early 1970's, the United States experienced
average growth of 4.2 percent (vs. 5.6 percent recently)
while the rest of the OECD area grew at 6 1/2 percent (vs.
3.75 percent more recently). This swing alone has had a
major adverse impact on the U.S. trade balance, explaining
perhaps $10-15 billion of the total swing of $40 billion
from 1975 through 1977.
Not only has the growth rate abroad slowed down, but
its composition seems to be changing with further
effects on the composition of demand for imports of these
countries. Investment is not playing its traditional role
- 5 in the growth of GNP and domestic demand abroad.
partly as a cause and partly as a result, industrial
production has grown particularly slowly. In the 18 months
ending December 1977, industrial production in 13 other major
OECD countries grew only 3.2 percent while their total GNP
expanded 7.6 percent. In the 12 months ending December 1977,
industrial production abroad did not grow at all while U.S.
industry increased its output by about 5 percent. With no
industrial production growth in our major markets, it is not
very surprising that U.S. non-agricultural exports — which
are comprised primarily of industrial supplies and capital
equipment — were essentially flat last year. Clearly the
relative performance of economies at home and abroad has
been a major factor in the deteriorating U.S. trade balance
since 1975.
This factor should become less important in the months
ahead. Growth in the United States is decelerating somewhat
from the very strong pace of 1976 and 1977, while growth
abroad is picking up somewhat this year and should do so
especially in the second half. As a result, we are now
expecting some convergence of growth rates among countries.
While it is not yet clear what the medium-term relationship
will be, I do not expect that U.S. growth rates will continue
to be considerably faster than average rates abroad. In
turn, this should lead to a pickup in the growth of our
export volume relative to our import volume, with favorable
effects on the U.S. trade balance — particularly over time,
as this convergence in growth rates cumulatively produces
higher levels of demand abroad relative to those at home.
Another major factor determining a country's performance
in world markets is its relative price competitiveness.
In the sixties, with fixed exchange rates, relative prices
provided quick and easy guides to the price competitiveness
of a country's exports compared to some particular group of
other countries. With today's more flexible exchange rate
system, movements in relative domestic prices must be
adjusted for exchange rate changes to discern changes in
"real" exchange rates and changes in a country's price
position. Such calculations are in no sense precise or
absolute measures of competitiveness, but they are important
indicators of trend developments.
These changes in price competitiveness are not immediate
reflected in trade flows. Empirical studies suggest that
trade flows exhibit a lagged response to price movements
of anywhere from one to five years. In our judgment, the
!ag usually runs from eighteen months to three years.
If this is so, trade flows in 1977 basically reflected
changes in U.S. competitiveness dating from 1974-1975 — a
- 6 period during which the U.S. competitive position experienced
a serious decline. In the wake of the oil crisis, U.S. inflation
accelerated rapidly and outpaced that of our competitors from
early 1974 to early 1975. At the same time, the U.S. dollar
was appreciating by some 8 percent on a trade-weighted basis,
apparently because observers felt that the United States would
weather the energy crisis better than other countries. This
double whammy — appreciation coupled with poor price performance
-- produced a sharp loss of something like 10 percent in the
trade competitiveness of U.S. suppliers during the 1974-1975
period. Given the time lags involved, this exerted a major
impact on 1977 trade flows. It may have been responsible
for somewhere like $5-10 billion of the deterioration which
occurred
by Performance
that year.
U.S. Export
In analyzing developments in the U.S. trade balance,
it is important to distinguish between export performance
and export competitiveness. Export performance is
frequently measured by changes in export market shares -in a country's share of global exports. But market shares
of today's world exports are actually the result of prior
changes in export competitiveness. As already noted,
trade flows tend to reflect changes in competitiveness
fully only after a lag of two or three years. Thus today's
U.S. export performance reflects changes in U.S. export
competitiveness of as much as two or three years ago.
A year ago, I noted that the U.S. share of world export
markets had increased in 1973-75 from the historic lows of
1972. I observed that the 1976 position was somewhat below
1975, but that I did not believe we were experiencing a
serious loss in market shares. Data for the first three
quarters of 1977 tend to confirm that belief as the U.S.
share of manufactured exports by industrial countries was
essentially unchanged during 1977 from the 1976 position:
— The U.S. share of total manufactured exports by
15 industrial countries hit its low point of 19.2
percent in 1972, and rose to 21.1 percent in
1975. The share then fell slightly, to 20.5
percent in 1976 and 20.4 percent in the third
quarter of 1977 (the most recent period for which
comparable data are available).
-- The U.S. share of chemical exports from these
countries rose steadily from 18.7 percent in
1972 to 20.6 percent in 1976, and jumped again
to 22.6 percent in the third quarter of 1977.
- 7 —
Our non-electrical machinery share rose from
the 1971 low of 25.1 percent to 26.8 percent
in 1976, but declined to 25.2 percent in the
third quarter of last year.
— Electrical machinery climbed steadily from its
1972 low of 20.9 percent to 23.3 percent in 1976,
and to 23.4 percent in the third quarter of 1977.
— Basic manufactures rose from a 1972 low of 10.6
percent to 11.9 percent in 1976, and dropped
slightly to 11.7 percent in 1977 III.
— Only in transport equipment is the U.S. share
lower today than in 1972, having fallen from 26.4
percent in 1972 to about 25.1 percent in 1976
and to 24.9 percent in 1977 III.
In citing these data, it is essential to repeat that
export performance measures such as shares of manufactured
exports are not necessarily good measures of current trends
or expected developments in the trade balance. Most
importantly, they do not pick up recent changes in a
country's competitive position. Indeed, the 1976-77 market
shares just cited reflect the deterioration in U.S.
price competitiveness dating from 1974-75 which I have
already described.
For the future, the price competitiveness of U.S.
exports has experienced significant improvement. The
exchange rate movements of the third quarter of 1977 and first
quarter of 1978 reversed the earlier losses in our relative
position resulting from the 8 percent dollar appreciation of
1974-75. Our competitiveness, as measured by price-adjusted
exchange rates, is now about where it was compared to other
major industrial countries in early 1973. This improvement
should begin to be felt in our trade flows — both exports
and imports — during the latter part of 1978 and into the next
year or so.
Developments Outside the Industrial Countries
The available measures of market share typically compare
the United States only to other industrial countries. One of the
roost important and impressive developments in the world
economy in the last few years has been the emergence of
a group of advanced developing countries (ADCs), most
notably Brazil, Korea, Hong Kong, Mexico, Singapore and
Taiwan. Their export volume growth has remained in double
digit levels for three straight years, and is growing
more strongly than it did even during the 1968-72 global
boom period.
- 8 Several important structural changes in the global
economy are being generated by this spectacular growth.
First, the locus of production is shifting. Between 1960
and 1973, world wide industrial production growth averaged
6.8 percent. Industrial countries grew at 6 percent, LDCs
were a bit more rapid at 6.8 percent and the non-market
economies grew at a strong 9 percent average rate. The
recession and its aftermath cut global production growth to
2.6 percent between 1973 and 1976, but growth in the LDCs and
non-market economies barely slowed down from the torrid pace
of the sixties. During 1973-76, LDC production increased 6.1
percent, while growth in the non-market economies continued at
an impressive 8.4 percent rate.
These growth rates have fostered changes in shares of global
industrial production. In 1963, the six key ADCs —
Brazil, Hong Kong, Korea, Mexico, Singapore, and Taiwan —
together accounted for about 2.4 percent of world industrial
production. All non-oil LDCs together produced about 10.4
percent of global output. By 1976, these ADCs had roughly
doubled their combined share of global output to 4.7 percent
and the total LDC share of global production had increased 3
percentage points, reaching a total of about 13 1/2 percent.
Over the same period, Japan and the less industrialized
OECD economies (Spain, Portugal, Turkey, Greece and Yugoslavia)
increased their combined share of global production by 5
percentage points. In 1976, these countries accounted for
some 13 percent of global production.
The net effect of these developments was to reduce
the share of global industrial production accounted for
by Europe and North America by roughly 8 percentage
points. This is a very sharp change in the locus of
productive capacity for such a short time span.
Not surprisingly, this increased productive capacity
is being felt in global export market shares. In 1963,
the six ADCs accounted for 1.5 percent of global manufactured
exports. By 1976, their share had jumped 3 1/2 percentage
points to 5 percent. This is an impressive increase. It
represents successful development strategies in the ADCs,
something that the United States and all of the other industrial
countries have aimed for in their assistance programs and overall
North-South policies. The manufactured exports are in a wide
variety of product categories: steel, cameras and optical
equipment, radios and television sets as well as the familiar
shoes and textiles.
Naturally U.S. exports to the non-OPEC LDCs have also
grown as these countries progress along the path of industrialization. Total U.S. exports to these nations rose
- 9 from $20 1/4 billion in 1970-72 to $27 3/4 billion in 1977.
These countries now account for about one-quarter of our
exports of manufactured goods. Indeed they are more
important to our export trade than the entire European
community.
The growth in our exports to the non-oil LDCs has
not, however, kept pace with the rise of imports. There was
an adverse swing in our trade balance with this area of
$5 billion. Eight developing nations suppliers (Brazil,
Mexico, Taiwan, Hong Kong, Singapore, Phillipines, South Korea,
and Malaysia) now account for $11 billion of the total $13 billion
of U.S. manufactured imports from LDCs. Total U.S. imports from
the non-oil LDCs grew from about $16 billion in 1972 to $38.5
billion in 1977 — an average annual growth rate of close to
25 percent. They have clearly become important factors in
the world economy, and offer increased competition for the
United Stated (and all other industrial countries) which we
must consider carefully in assessing our own competitive position
now and in the future.
Conclusions
This discussion of the adverse swing in the U.S. trade
balance has focused on three factors: oil imports, relative
growth rates and price competitiveness. In all three areas,
we are making progress:
— The energy bill is finally coming close to passage.
— Relative growth rates are converging, as our major
markets abroad pick up their growth while we slow
down a bit.
— U.S. price competitiveness has improved
significantly over the last quarter of 1977 and
the first quarter of 1978.
— And the President's determination to control
inflation will help to preserve our trade
competitiveness.
Nevertheless, more must be done to achieve the needed
improvement in our external accounts and thereby assure
continued stability for the dollar. We must continue and
strengthen our determination to restrain inflationary
Pressures. We must meet the trade challenge with aggressive
sales efforts by U.S. firms both at home and in third markets,
supported as necessary by the policies and programs of
our government. It is clear that the competitive ADCs
- 10 present a new challenge as well as a great opportunity,
and we must insure that they are brought more fully into
the global adjustment process.
These changes will show up in the trade numbers only
over time. We will not see dramatic changes immediately.
But fundamental improvements are under way, and we intend to
support them wherever we can do so effectively.
A strong export performance is essential for our own economy
and for the international position of the United States. It
is a major policy objective which will be pursued vigorously
by the administration, based on our analysis of the underlying
strength and competitiveness of the U.S. economy as
outlined today. It is an effort which — with hard work
by both the private sector and Washington — we are
confident can succeed.
0O0
pimntoftheTREASURY
TELEPHONE 566-2041
IHINGTON, D.C. 20220
FOR IMMEDIATE RELEASE
June 5, 1978
RESULTS OF TREASURY'S WEEKLY BILL AUCTIONS
Tenders for $2,203 million of 13-week Treasury bills and for $3,401 million
of 26-week Treasury bills, both series to be issued on June 8, 1978,
were accepted at the Federal Reserve Banks and Treasury today. The details are
as follows:
RANGE OF ACCEPTED
COMPETITIVE BIDS:
13-week bills
maturing September 7, 1978
Price
98.331a/
98.324
98.325
High
Low
Average
Discount
Rate
6.603%
6.630%
6.626%
26-week bills
maturing December 7, 1978
Investment [
Rate 1/ : Price
6.81%
6.84%
6.83%
Discount
Rate
j: 96.421
: 96.409
: 96.413
7.079%
7.103%
7.095%
Investment
Rate 1/
7.44%
7.47%
7.46%
a/ Excepting 1 tender of $80,000.
Tenders at the low price for the 13-week bills were allotted 80%.
Tenders at the low price for the 26-week bills were allotted 74%.
TOTAL TENDERS RECEIVED AND ACCEPTED
BY FEDERAL RESERVE DISTRICTSAND TREASURY:
Location
Received
Boston
$
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Accepted
Received
98, 595, 000
52,595,000 $
39,460,000
$
19,460,000
717,015,000
4,985,985,000
2,591,485,000
21,385,000
103,335,000
13,335,000
31,370,000
62,215,000
32,215,000
47, 560,000
18,205,000
11,205,000
22, 765,000
24,200,000
24,200,000
71, 800,000
716,680,000
483,360,000
18 250,000
43,535,000
16,275,000
22,155,000
25,175,000
24,135,000
20,640,000
22,000,000
21,650,000
17
815,000
7,285,000
7,025,000
150,110,000
330,250,000
150,630,000^
5,895,000
5,895,000
9,125,000
$4,643,38 5,000 $2 , 2 02 , 58 5 , 000V $6, 384,220,000
$3,400,870,000£/
666, 515, 000
21, 385, 000
101, 960, 000
51, 560, 000
23, 765, 000
224, 080, 000
45, 250, 000
25, 155, 000
22, 665, 000
18, 415, 000
334, 915, 000
9,125,000
^ ncludes $364,120,000 noncompetitive tenders from the public.
ncludes $213,505,000 noncompetitive tenders from the public.
./Equivalent coupon-issue yield.
B-960
Accepted
FOR RELEASE AT 4:00 P.M.
TREASURY'S WEEKLY BILL OFFERING
The Department of the Treasury, by this public notice,
invites tenders for two series of Treasury bills totaling
approximately $ 5,700 million, to be issued June 15, 1978.
This offering will not provide new cash for the Treasury as the
maturing bills are outstanding in the amount of $5,713 million.
The two series offered are as follows:
91-day bills (to maturity date) for approximately $2,300
million, representing an additional amount of bills dated
March 16, 1978,
and to mature September 14, 1978 (CUSIP No.
912793 T3 0), originally issued in the amount of $3,402 million,
the additional and original bills to be freely interchangeable.
182-day bills for approximately $3,400 million to be dated
June 15, 1978,
and to mature December 14, 1978 (CUSIP No.
912793 U8 7).
Both series of bills will be issued for cash and in
exchange for Treasury bills maturing June 15, 1978.
Federal Reserve Banks, for themselves and as agents of foreign
and international monetary authorities, presently hold $3,070
million of the maturing bills. These accounts may exchange bills
they hold for the bills now being offered at the weighted average
prices of accepted competitive tenders.
The bills will be issued on a discount basis under competitive
and noncompetitive bidding, and at maturity their par amount will
be payable without interest. Except for definitive bills in the
$100,000 denomination, which will be available only to investors
who are able to show that they are required by law or regulation
to hold securities in physical form, both series of bills will be
issued entirely in book-entry form in a minimum amount of $10,000
and in any higher $5,000 multiple, on the records either of the
Federal Reserve Banks and Branches, or of the Department of the
Treasury.
Tenders will be received at Federal Reserve Banks and
Branches and at the Bureau of the Public Debt, Washington,
D
« C. 20226, up to 1:30 p.m., Eastern Daylight Saving time,
Monday, June 12, 1978.
Form PD 4632-2 (for 26-week
series) or Form PD 4632-3 (for 13-week series) should be used
to submit tenders for bills to be maintained on the book-entry
records
B-961 of the Department of the Treasury.
-2Each tender must be for a minimum of $10,000. Tenders
over $10,000 must be in multiples of $5,000. In the case of
competitive tenders the price offered must be expressed on
the basis of 100, with not more than three decimals, e.g.,
99.925. Fractions may not be used.
Banking institutions and dealers who make primary
markets in Government securities and report daily to the
Federal Reserve Bank of New York their positions in and
Dorrowings on such securities may submit tenders for account
of customers, if the names of the customers and the amount
for each customer are furnished. Others are only permitted
to submit tenders for their own account.
Payment for the full par amount of the bills applied for
must accompany all tenders submitted for bills to be maintained
on the book-entry records of the Department of the Treasury. A
cash adjustment will be made on all accepted tenders for the
difference between the par payment submitted and the actual
issue price as determined in the auction.
No deposit need accompany tenders from incorporated banks
and trust companies and from responsible and recognized dealers
in investment securities for bills to be maintained on the
book-entry records of Federal Reserve Banks and Branches, or for
bills issued in bearer form, where authorized. A deposit of 2
percent of the par amount of the bills applied for must
accompany tenders for such bills from others, unless an express
guaranty of payment by an incorporated bank or trust company
accompanies the tenders.
Public announcement will be made by the Department of the
Treasury of the amount and price range of accepted bids.
Competitive bidders will be advised of the acceptance or
rejection of their tenders. The Secretary of the Treasury
expressly reserves the right to accept or reject any or all
tenders, in whole or in part, and the Secretary's action
shall be final. Subject to these reservations, noncompetitive
tenders for each issue for $500,000 or less without stated price
from any one bidder will be accepted in full at the weighted
average price (in three decimals) of accepted competitive bids
for the respective issues.
Settlement for accepted tenders for bills to be maintained on the book-entry records of Federal Reserve Banks
and Branches, and bills issued in bearer form must be made
or completed at the Federal Reserve Bank or Branch or at the
Bureau of the Public Debt on June 15, 1978,
in cash or
other immediately available funds or in Treasury bills maturing
June 15, 1978.
Cash adjustments will be made for
differences between the par value of the maturing bills
accepted in exchange and the issue price of the new bills.
-3Under Sections 454(b) and 1221(5) of the Internal Revenue
Code of 1954 the amount of discount at which these bills are
sold is considered to accrue when the bills are sold, redeemed
or otherwise disposed of, and the bills are excluded from
consideration as capital assets. Accordingly, the owner of these
bills (other than life insurance companies) must include in his
or her Federal income tax return, as ordinary gain or loss, the
difference between the price paid for the bills, whether on
original issue or on subsequent purchase, and the amount actually
received either upon sale or redemption at maturity during the
taxable year for which the return is made.
Department of the Treasury Circulars, No. 418 (current
revision), Public Debt Series - Nos. 26-76 and 27-76, and this
notice, prescribe the terms of these Treasury bills and govern
the conditions of their issue. Copies of the circulars and
tender forms may be obtained from any Federal Reserve Bank or
Branch, or from the Bureau of the Public Debt.
oOo
mrmentoftheTREASURY
JHINGTON, D.C. 20220
LEPHONE 566-2041
FOR R E L E A S E U P O N DELIVERY
Expected at 3:00 p.m.
June 7, 1 9 7 8
STATEMENT OF THE HONORABLE W. MICHAEL BLUMENTHAL
SECRETARY OF THE TREASURY
BEFORE THE SENATE COMMITTEE ON BANKING, HOUSING,
AND URBAN AFFAIRS
Mr. Chairman and members of this distinguished Committee:
I appear before you to present the Administration's recommendations on the future Federal relationship to the financing
of New York City. My testimony will cover three major areas:
first, the events of the past two and a half years which underlie
our discussions here today; second, New York City's budget and
financing plans covering the 1979-1982 period; and third, the
Administration's recommendations on financing assistance for
the City during that period.
Mr. Chairman, four important principles underlie the
conclusions which I will present today.
— Preserving New York City's Solvency: This Administration believes that the effects of a bankruptcy on the
residents of the City and State, the market for all
municipal securities and foreign confidence in the
United States would be very serious. A concerted
effort must be made to prevent bankruptcy.
— Maximum Budget and "Financing Efforts by the Local
Parties! Primary responsibility for New York City's
financing rests with the local elected officials
and the relevant private parties at the City level.
Beyond that, the City is the responsibility of New
York State. Any Federal financing assistance should
be provided only under extraordinary circumstances
and should be limited to a residual and transitional
one.
to
" A Truly Balanced City Budget;is a Prerequisite
Pr
Ending this Crisis: New York City 1 ost access to
B-962
- 2 conventional borrowing sources because it incurred
large budget deficits and otherwise lost control of
its finances. These deficits have been reduced,
but not eliminated, and they remain the primary
obstacle to restoring the City's access to the credit
markets. Any post-June 30, 1978 financing plan, therefore, must be conditioned upon achievement over the
plan period of a budget which is balanced in accordance
with generally accepted accounting principles.
T
— ^e New York City Financing Crisis Should be~Resolved
Once and For All: The only acceptable plan for future
financing of the City is one which will restore permanently New York's ability to finance itself.
Mr. Chairman, let me now begin a detailed discussion
of the past and present situation and our legislative recommendations for the future.
I. Review of the 1975-1978 Period
During the early 1970's, New York City's fiscal condition was weakened by the migration of jobs and related tax
revenues from the City, the 1974-1975 national recession
as well as unsound budget and borrowing practices.
The consequences of these became clear in early 1975,
when the municipal bond market closed to New York City, and
the City teetered on the edge of bankruptcy. The City's then
budget of approximately $13 billion — by far the largest
municipal budget in this country — was estimated to be
$2.0 billion in deficit, and its accounting and financial
control systems were archaic and unreliable.
Not only did the public markets close to New York City,
but even massive efforts in 1975 by the State of New York were
insufficient to solve the entire City financing problem.
The State created a Municipal Assistance Corporation
(MAC), with authority to issue its own bonds, and to use
the proceeds for making direct loans to the City and refinancing of City notes. The State also advanced $800 million of additional funds directly to the City. Yet, MAC
was unable to borrow sufficient amounts in relation to the
City's needs. Indeed, in the fall of 1975, the municipal
bond market also closed to MAC, and the State was forced to
take further action. It installed an Emergency Financial
Control Board (EFCB) to exercise substantial control over
the City's finances.
- 3 These drastic steps were still insufficent, however,
and imminent bankruptcy threatened. In that context the
Congress passed the 1975 New York City Seasonal Financing Act.
This legislation authorized the U.S. Treasury to provide shortterm loans to the City to meet cash flow imbalances occurring
within the City's fiscal year. These loans were purely seasonal —they were extended and matured within the City's fiscal
year — and were limited to $2.3 billion in any one year. This
Federal lending program, which expires at the end of this month,
has supplied New York City's short-term borrowing requirements
since late 1975.
From 1975 through June 30, 1978, the City's employee pension
funds have purchased or are obligated to purchase $2.65 billion
of long-term City and MAC debt, bringing their total holdings
of such debt to 35 percent of their total assets. Such
purchases have satisfied New York's long-term borrowing
needs during this emergency period.
The 1976-1978 Period
Mr. Chairman, both the 1975 emergency State legislation and the Seasonal Financing Act required New York City
to adhere to the three-year financial plan developed in 1975
and to take a series of other steps to improve its fiscal
condition. These were designed to restore the City's access
to conventional borrowing sources.
A crucial aspect of today's discussion, then, concerns
these steps — whether they have been taken and whether they
were sufficient. As to the first point, Mr. Chairman, it
is clear that New York City has done what it pledged to do
in 1975. Let me quickly review the major steps taken,
particularly because many here in Washington and elsewhere
may be under the misapprehension that the fiscal condition
of New York City has not improved since 1975.
The City responded to the crisis by developing a threeyear financial plan to reduce expenditures in real terms while
increasing revenues, so that by 1978 its budget would be
"balanced" as that term is defined under New York State law.
We expect this objective to have been met at the end of the
City's current fiscal year. Taking into account all expense
items still included in the capital budget, and the accrued
pension liability, the City has reduced its deficit from
approximately $2.0 billion in fiscal year 1975 to approximately
$750 million estimated for fiscal year 1978. Table 1 presents
summary budget data for these years.
- 4 The City has achieved this improvement by reducing the
City-funded work force by 60,000; by charging tuition for all
students at City University for the first time; by sharply
limiting wage increases for municipal employees through
June 1978 and reducing employee fringe benefits; by withdrawing
from mortgage financing of low- and middle-income housing projects? by reducing the number of beds in City operated hospitals; by raising the transit fare from 35 cents to 50 cents;
and by reducing social services through closing 77 day-care
centers and limiting reimbursement rates at other centers.
The City also reduced its share of contributions to municipal
union pension funds by requiring greater employee contributions,
while the City increased the absolute amount of its contributions
to increase the actuarial soundness of the funds.
At the same time as it took these budgetary actions, the
City also moved to reform its accounting and internal financial control systems. The City has begun phasing current
expense items out of its capital budget and is now accelerating
that phase-out for completion by the end of 1981. It has installed
an integrated financial management system at a cost of $16 million.
Furthermore, a consortium of independent certified public
accountants is conducting an independent audit of the results
of the City's current fiscal year and will do so in the future
years.
The State of New York also has taken important steps to
restore the fiscal integrity of the City. It established
the Emergency Financial Control Board with the Governor as
Chairman to oversee implementation of the City's three-year
plan. As I noted earlier, it created a State agency, the
Municipal Assistance Corporation (MAC), to provide financing
for the City. More than $3 billion of short-term City notes,
which were outstanding in mid-1975, were converted into longterm MAC bonds. The State has continued to advance $800 million
of aid each year to help meet the City's financing needs. The
State has also undertaken greater responsibility in funding
City services including assuming a larger role in funding City
University and assuming financial responsibility for City courts.
Currently the State has continued to assist the City. The
Governor has provided needed leadership in guiding the bill
through the legislature to extend the powers of the EFCB and
enlarge MAC's borrowing authority. I should like to point out
that by increasing the amount of debt which MAC is authorized to
issue by $3 billion the State is really putting itself on the
line for the City because the MAC bonds are backed by the
- 5 so-called moral obligations of the State. In effect, therefore,
the State wil be at least morally responsible for $8.8 billion of
MAC debt issued on behalf of the City. I think this refutes
any argument that the State has not supported or acted on behalf
of the City.
City Seasonal Borrowings From the Treasury
The City has complied with all key provisions of the Federal
seasonal loan program. Furthermore, the program has not cost
the U.S. taxpayer anything. Table 2 provides a schedule of
our total loans under the program.
During fiscal year 1976, New York borrowed $1.26 billion
and repaid it with interest, either on time or ahead of schedule.
In fiscal 1977, $2.1 billion was borrowed and again repaid
punctually. During this current year, the City has borrowed
$1,875 billion, and already repaid $1.2 billion ahead of schedule
I anticipate timely repayment of the remaining amount.
Under the law, Treasury is required to charge the City
one percent more than the rate on outstanding U.S. Government
obligations of comparable maturity. As a result, this year's
seasonal loan program will yield a net surplus of approximately
$13 million. This amount will be returned, of course, to
Treasury's general fund. The aggregate amount of interest
received by the Treasury during the past two and one-half year
period, over and above our borrowing costs, will be $30 million.
II. New York City's Continuing Lack of Access to Conventional
Lending Sources
Although New York City has taken the important steps I
have outlined, the municipal credit markets have not re-opened
to the City. At the moment, its notes and bonds remain unsaleable in the public markets. A primary purpose of the Seasonal
Financing Act — to restore New York's access to conventional
lending sources — has not been achieved.
There are at least two reasons for this lack of market
access. The first concerns continuing budget deficits. To
- 6 the extent that budget deficits originally caused the
City's loss of market access, New York's smaller but continuing deficits remain a primary obstacle to regaining it.
The second reason for New York's continuing lack of
market access might be described as traditional investor
skepticism. Once a major borrower - municipal or corporate
- loses his credit standing and is nearly insolvent, the
rating agencies and the public markets require a period
of years before they are convinced that corrective steps
have worked and that creditworthiness has been restored.
This is a natural lag, and there are numerous examples of
it in modern finance. The public financing difficulties
of our airline industry, after its loss years of the early
1970's, are a representative example.
It is not altogether surprising, therefore, that the
credit markets did not re-open this past year to New York City.
It is less than three years since the height of its fiscal
crisis and its near bankruptcy. Market access generally
is not regained that fast. The traditional skepticism of
public markets is such that New York needs more time before
it can rely on those markets for the full amounts of its
borrowing needs.
III. The City's Four-^Year Budget Outlook
Most informed observers believe — and I concur in their
conclusion — that if the obstacle of budget deficits could
be eliminated, then investor caution would tend to dissipate.
Accordingly, I asked City officials in November to prepare a
four-year financial plan, covering budgets and financing, and
aimed at achieving budget balance in accordance with generally
accepted accounting principles at the end of the plan period.
Treasury received this financial plan on January 20 and
reviewed it intensively, together with our consultants —
Arthur Andersen & Co. Our conclusions regarding this plan were
central to the development of our proposed financing legislation
as presented to Congress on March 2 and embodied in S. 2892.
On April 27, 1978 the City presented its formal 1979 budget and
an up-dated and revised four-year budget plan to the City
Council and Board of Estimate. We have also studied this
latest version carefully. I will now discuss the City's
current condition, and then this most recent budget plan and
our assessment of it.
- 7 Parameters of The City's Budget
New York does not have a conventional budget and cannot
eliminate its deficits in one year. Let me explain why.
New York City's budget is virtually unique in terms of
its size and composition. At approximately $13.5 billion today,
it is by far the largest municipal budget in the United States.
Indeed, New York has the third largest overall governmental
budget in this country — behind the Federal government
and the State of California, but considerably larger than
that of New York State. This enormous City budget reflects
New York's huge population (7.5 million) and the large
number of services for which the City, instead of a larger
county or State, pays.
Specifically, the City administers a wide range of State
and national welfare programs, for which it must pay a large
share of the costs. The City pays for 25 percent of the
welfare and medicaid benefits provided to its residents.
These alone involve $1.2 billion each year. New York is the
only major U.S. city responsible for paying this high proportion of welfare and medicaid. Indeed, only 12 States require
their localities to share any substantial amount of the
costs of Federal welfare programs.
In addition, the City funds a series of other services
which, in other cities, are paid for by larger governmental
units — a county or the State. This is partially because
New York is so large, both in territory and population. It
also reflects the historical division of financial responsibility between the City and the State whereby the City pays
most of the costs of the municipal courts, hospitals, and
public schools.
New York City —A Reflection of Americans Urban Problems
Consistent with this general fiscal situation, of course,
New York suffers from a series of ills which afflict many
other urban centers. The City's economy has declined sharply
during the past decade, as have those of numerous other
Northeast and Midwest cities. New York has lost approximately
510,000 jobs from 1969 through 1975, an amount which alone
exceeds more than the total public and private employment
of all but a handful of other cities. Moreover, the City
faces a serious revenue/expenditure gap with revenues growing
more slowly than inflation-driven expenditures.
- 8 These problems are not unique to New York. They are
common to a number of our larger American cities. The
underlying cause is largely one of secular economic decline.
Current trends include population loss, declining private
sector employment and slower per capita income growth.
Hence, the ability of the City to balance its budget
over the four-year period is substantially impacted by the
local and national economies. A declining local economy
yields the equally unattractive choices of either raising
taxes or cutting services. Each of these steps accelerates
the deterioration of its economy. The only way to break
the downward spiral is to rebuild the private sector base.
Cognizant of these problems, the Administration already
has taken steps to assist declining cities.
On March 27, 1978, the President announced his urban
policy package which provides a framework to guide federal
policy decisions in all areas and to focus Federal resources
on urban problems in the years to come. Included are a
variety of specific administrative and legislative initiatives.
Let me highlight three major ones.
The President recommends replacing the expiring countercyclical program with a $1 billion Supplementary Fiscal
Assistance program to aid fiscally distressed local governments. He is proposing the establishment of a National
Development Bank to encourage the private sector to remain,
expand and locate in distressed areas. His third major
initiative is the proposed Labor Intensive Soft Public
Works program, involving $1 billion per year over 3 years to
rehabilitate and renovate public facilities.
These are a few examples of a diverse set of programs,
each designed to ameliorate one aspect of the multi-faceted
problems facing our cities. The package totals approximately
$8 billion in budgetary authority, guarantee authority and tax
expenditures during the first year. It augments other significant Presidential proposals, such as the extension of the
Comprehensive Employment and Training Act and the welfare reform
program, which are under Congressional consideration now.
The City's Four-Year Budget Plan
The revised City four-year plan (the "Plan") is summarized
in Table 3. Please note that this is a "plan", not a fourYear budget. No city or governmental unit, be it New York City
- 9 or the U.S. Government, can formulate a detailed budget today,
for 1980, let alone 1981 or 1982.
In drawing up the revised Plan, City officials extrapolated
trends in revenues and expenditures which are reflected in its
FY 1979 budget. At my request this initial forecast also
assumed that the practice of funding operating expenses through
the capital budget be eliminated before the start of the last
year of the Plan. I also insisted that the budget be balanced
in accordance with generally accepted accounting principles.
The revised New York City Plan projects a balanced
budget for the City's next fiscal year. Over the 1980-1982
period, however, it forecasts annual deficits growing to a
little more than $700 million by the end of the Plan period,
$362 million in FY 1980, $593 million in FY 1981, and $702
million in FY 1982. The primary reason for these deficits is
the phasing out of the practice of funding operating expenses
with monies from the capital budget and the adjustment of the
City's contribution to its pension funds to conform with
generally accepted accounting principles. Looking at the
budget plan on the basis of generally accepted accounting
principles, the budget gap would be approximately $600 million
for FY 1979 and would grow slightly, to the $702 million
figure for FY 1982 mentioned above.
The 1979 Budget
On
the Boa
a balance Denween revenues ana expenairures in concrasi to t.
January 20 estimate of a $457 million deficit. This balance
was achieved through a variety of means, including the use
of new expenditure and revenue baselines, the adoption of
certain actions by the City to close the gap, and the passage
of an aid package for the City by the State legislature.
The January 20 Plan was based on revenue and expenditure
patterns through September 1977. In drawing up the FY 1979
budget and the revised Plan the City relied on updated informa
tion reflecting the January-March period. In particular, tax
revenues, especially sales and personal income tax receipts,
were running somewhat higher than forecast and thus are now
estimated to be somewhat greater over the Plan period. In
addition, the City actuary determined that pension fund costs
were overestimated in the January 20 Plan, as were estimates
°f the City's interest expense.
The 1979 deficit reduction actions which the City is
Vitiating will produce $174 million in budgetary savings
- 10 (shown in Table 4 ) . The principal action involves attrition
of 3 percent of the labor force over the next year, which will
lower so-called personal service costs by $76 million. The
other major actions involve a plan to sharply limit growth in
expenditures for materials and supplies and to reduce costs of
the Department of Social Services through reduced welfare eligibility, improved job placement of those on welfare and a
reduction in medicaid expenditure.
Included in the FY 1979 budget are $250 million of
additional State aid over and above the amounts shown in
the January 20 version of the Plan and I commend Governor
Carey and the State legislature for taking these actions.
These State actions, shown in Table 5, are composed
primarily of increases in State revenue sharing ($76 million),
State education aid ($60 million), and the State assumption
of costs to the localities of the Supplemental Security
Income program ($60 million). The remaining amounts of
additional aid come from increased taxes on real property
of Conrail and Amtrak passed through to the City ($12 million)
and a tightening of procedures for the administration of
several public assistance programs ($43 million).
The Emergency Financial Control Board (the "EFCB") and
the Special Deputy State Comptroller have identified approximately $100 million of potential revenue shortfalls or underestimates of expenditures in the FY 1979 budget. For the
most part, these "soft" areas reflect uncertainty over certain
State actions and over passage of the Administration's Supplementary Fiscal Assistance program. Reflecting its statutory
responsibilities, the EFCB has asked Mayor Koch to identify
$100 million of contingent deficit reduction steps to be taken
in FY 1979 if the City's projections are not met. I concurred
in this EFCB analysis and asked the Mayor to present the contingent FY 1979 budget actions to me before this testimony.
The Mayor's stand-by deficit program for FY 1979 consists
of possible actions to be taken in four principal areas. First,
the City has identified 32 separate expenditure reduction steps
in its agencies which would produce total savings of about $23
million. These reductions largely involve further attrition
in each agency. Second, the maximum increase in the City's
procurement budget would be held to an even lower level than
contemplated in the January Plan — below 3 percent — to
produce savings of $20 million. A third area consists of delays
in hiring new workers during the 1979 fiscal year, yielding
another $20 million of budgetary relief. The fourth step
concerns the re-estimation of certain revenues and the resolution of certain accounting issues affecting them. The net
revenue increase approximated $40 million. These actions are
summarized in Table 6.
- 11 Let me emphasize that the deficit reduction process
reflected in this 1979 budget is the same approach which has
been taken successfully by the City over each of the last
three years. Working with the EFCB the City has budgeted
for its operations in such a way as to produce a balance
according to State law. In general, the operating results
for the last three years have been better than expected,
thus validating the City budget process.
The FY 1980 - FY 1982 Part of thePlan
Regarding the remaining three years of the Plan, you
will note on Table 7 that several of its 1979 reduction steps
will produce recurring and growing savings in the later years.
In addition, the City plans to take additional actions in those
years to narrow the projected gaps. Specifically, further
attrition is planned for the 1980-1982 period, together with
continued actions to contain other than personal service costs
and management improvements. The total budgetary relief amounts
to $125 million in FY 1980 and would rise to $422 million in
FY 1982. When applied against the forecasted deficits for those
years the gaps narrow to the amounts shown in the middle of
Table 7.
The City, as it has in the past, is continuing to work
with State and Federal officials to identify specific programs
that could be begun, modified, or expanded to close these gaps.
Iv
- Treasury's Assessment of the Four-Year Plan
We have studied this Plan thoroughly together with our
consultants, Arthur Andersen & Co. We are satisfied that the
FY 1979 revenue and expenditure forecasts are reasonable, and
that next year's budget thus will be balanced. Of course,
budget balance" in this case reflects the permitted four
Year phase-out of those operating expenses which are funded
through the capital budget.
Turning to the FY 1980-FY 1982 part of the Plan, it is
our assessment that City's revenue estimates for that period
are conservative — they involve little growth. Such estimates
ver the past three years have been quite accurate and an
examination of the assumption underlying the forecast for the
J-an period confirm that the City continues to project
conservatively.
- 12 Expenditure estimates for the FY 1980 through FY 1982 period
also appear to be generally reasonable, although we have identified
a few areas of uncertainty. One uncertainty is, of course,
the cost of labor contracts over this full four-year period.
I will have more to say about this issue later.
Regarding 1980, specifically, I have asked Mayor Koch, and
he has agreed, to identify contingent deficit reduction steps
to save $300 million in that year. We are not projecting a
deficit of that magnitude but there are uncertainties in the
City's Plan for that year and a supplemental budget plan should
be available for implementation if needed.
In response to my request Mayor Koch has identified $300
million of additional measures to close any potential budget
gap for 1980. Since the January 20 Plan, the Administration
has sent its proposed Supplementary Fiscal Assistance program
to Congress and the City now estimates that it would receive
$84 million more in 1980 than it earlier planned. Similarly,
Governor Carey has indicated that the City may plan on $116
million more of 1980 State aid than is contained in its April
27 budget plan. Finally, many of the contingent actions outlined
by the City for FY 1979 could be repeated in FY 1980, to produce
an overall total of $300 million in gap-closing actions for
that year. Together with the 1979 contingent plan, we think
that such 1980 actions can ensure that the City achieves budget
balance, as defined, during the next two years.
Turning now to the 1981-1982 period, our judgment is that
the City's budget can move into budget balance according to
generally accepted accounting principles by FY 1982. This
judgment reflects several factors. First, the City plans to
take additional deficit reduction actions in those years to
produce savings in the amounts shown in Table 7 (as I mentioned
earlier). These will have the remaining gap of between $230
million and $330 million to be filled by additional State and
Federal actions or through more City actions in those years.
State actions potentially could close almost all of the
prospective gaps in the two final years. As shown at the
bottom of Table 7, the revised plan carries $250 million of
increased State aid in FY 1979, but only $174 million of
this is projected to recur in subsequent years. I met with
Governor Carey and the State legislative leaders and emphasized the need for aid to the City to increase and to be of
a recurring nature. The Governor provided me with estimates
showing the amount of aid increasing up to $450 million by 1982.
- 13 The difference between the $450 million promised by the Governor
and the $174 million included in the revised plan is $276
million — about the size of the projected FY 1982 remaining
gap.
I recognize that the State legislature cannot commit
in advance to specific amounts in future budgets. Yet, it
is also clear that increased State aid beyond 1979 is a
prerequisite to achieving true budget balance for the City.
Our position is that amounts of at least this magnitude must
be provided.
The City's Plan for closing the budget gap also assumes
moderate amounts of additional Federal fiscal assistance.
Our general view is that the City has primary responsibility
for its budget, and beyond that, the State has the principal
responsibility. Nevertheless, the City's needs are such
that some Federal residual budget assistance is clearly
justified.
Table 8 summarizes the history of Federal aid to the City
in recent years and illustrates that New York has received
growing amounts of Federal aid in these years. I do not believe
it is unreasonable to assume that New York together with other
cities will receive increases in Federal aid over the 1979-1982
period as the President's urban initiatives are implemented.
Finally, I believe that the combination of Mayor Koch's
commitment to attain the balance, the EFCB's statutory
responsibilities in that area, and the terms of S. 2892 - which
would require the attainment of true budget balance by 1982,
will mean that New York will attain its four year budget goals.
In my judgment, the City will take whatever fiscal steps are
necessary in 1981 and 1982 to reach budget balance.
The City's New Labor Contracts
The City and its unions announced an agreement two days
ago concerning new labor contracts for the 1979-1980 period.
Treasury took no direct part in the negotiations — believing
this to be an inherently local issue — but consistently stressed
to the City that the budget effects of the final settlement
would be of critical importance to the integrity of the City
budget Plan. Specifically, we have consistently taken the position that the City must fully offset any increased labor costs
with recurring revenues or true savings in other areas.
- 14 The proposed settlement would cost the City budget
approximately $757 million over those two years. Base wages
would increase 4 percent beginning October 1978 and another
4 percent beginning October 1979, and "bonuses" (cost-of-living
adjustments) of $750 per worker would be paid in each of the
two years. These latter payments actually would be somewhat
smaller than the cost of living adjustments paid during the
past two years.
The City's April 26 budget Plan proposed to finance any
settlement with: (a) $69 million already budgeted in each
year for cost-of-living adjustments; (b) the use of $170 million of its FY 1978 ending cash balance; and (c) the use of
a contingency reserve established in the revised Plan amounting to $193 million in FY 1979 and $116 million in FY 1980.
These items total $617 million.
We think that the City's proposed financing of this settlement is sound with two exceptions. First, to state the obvious,
the new agreement would cost $140 million more than the $617
million carried in the April Plan. Off-setting deficit reduction
steps in this amount will be required, and the City's recently
submitted 1979 and 1980 contingent budget plans should be sufficient in this regard. Second, the budget plan for FY 1981
and FY 1982 assumes the bonuses or costof-living adjustments
will not be continued in those years, and this appears unrealistic.
In general, this labor agreement appears fair. On the one
hand, it is unreasonable to ask City workers to accept no increases
for the next two years. On the other hand, the effective wage
increase over the two years of approximately 6 percent (the
8 percent does not take full effect until FY 1981) is reasonably
restrained in the context of other recent public and private
sector labor settlements. All things considered, I conclude
that this potential agreement is a responsible one.
I am disappointed, however, that the labor agreement has
not addressed the issue of obtaining increased productivity
from the City work force. More specifically, the settlement
does not include any provisions to bring about needed modifications in work rules, fringe and pension benefits, and unnecessarily rigid civil service rules. To an outsider, it seems
clear that progress in those areas is essential to the ultimate
recovery of the City. As I understand it, New York City's
present work rules and benefits are considerably more generous
than those that exist in typical cities across the country. It
is difficult to see how they can be justified when the City faces
the kind of financial difficulties that your Committee has been
reviewing. The Congress may wish to consider whether it should
take any action to facilitate progress in this area.
- 15 V.
New York City's Financing Outlook
Let me now discuss New York's borrowing needs.
Why New York Borrows Large Amounts Each Year
Each year New York borrows large amounts through the
issuance of both short- and long-term notes. During this
current year, for example it has borrowed $1,875 billion
on a seasonal basis and will have borrowed $1 billion
on a 15-year basis.
Seasonal needs arise because City expenditures are spread
fairly evenly over the year while certain revenues, particularly
State aid, are concentrated in the final months of the City's
fiscal year. The City thus borrows during the first months of
its fiscal year, in anticipation of revenues to be received
during the final months of its fiscal year.
New York, like all other municipalities, also must finance
its capital budget. The City's capital budget includes expenditures for long-term assets, e.g. schools, roads, etc., that are
traditionally financed with long-term debt. During each of the
past two years, the City has sold $1 billion of long-term
bonds to cover both traditional capital spending and operating
expenses carried in the capital budget.
Recent Financing History and Current Problems
Since 1975, substantially all of the City's new borrowing
needs have been satisfied from two sources. Treasury has
provided short-term loans under the Seasonal Financing Act,
and the City employee pension funds will have lent or are
obligated to lend $2.65 billion during the intervening two
and a half years.
Both the Federal seasonal loan program and the City
pension fund loan program expire on June 30, 1978. The
City thus must develop new financing arrangements for both
its short- and long-term needs.
For this reason, I asked the City last November to
develop an overall financing plan, to accompany its budget
Plan. This also was submitted to me on January 20, and
Treasury has been evaluating it since then.
- 16 The City's Four^Year Financing Plan
Regarding long-term financing, the City Plan projects
$5.1 billion of financing, as set forth in Table 9.
The crux of New York's long-term borrowing plan is a
$2,025 billion program of Federal and State loan guarantees
on a 90 percent - 10 percent basis for City bonds sold to
the City and State pension funds. The City anticipates
that the guarantee protection would last for at least ten
years, although the City bonds would carry 20 or 25 year
maturities. Its proposed guarantee automatically would
lapse, however, if the pension funds resold the bonds.
The City's Seasonal Financing Plan
The City projects seasonal borrowings of $1.4 billion
next year, declining to $1 billion in 1982. This reduction
would be accomplished by selling MAC bonds to fund the $800
million advance that the State extends annually to the City.
New York proposes an extended Federal seasonal loan
program pursuant to which it would borrow $1.2 billion
next year, $800 million in 1980, and $400 million in 1981.
The remainder of its seasonal needs would be covered by a
$600 million line of credit from the New York Clearing House
Banks.
Summary of City Financing Plan
City officials believe that these financing arrangements
will permit New York both to meet its full borrowing needs
over the 1979-1982 period and to regain full access to conventional markets at the end of that period. Indeed, it
projects selling $1 billion of City bonds to the public in
1983, as compared to only $250 million during the final year
of the Plan period.
Recent Developments - in New York City and State
Local Financing Negotiations
The Municipal Assistance Corporation has been negotiating
with local financial institutions to obtain unguaranteed, longterm lending commitments to the City for the 1979-1982 period.
Recently, it obtained commitments to buy MAC bonds over those
four years in amounts of $500 million from the Clearing House
- 17 banks, $250 million from a consortium of insurance companies
and $250 million from a consortium of savings banks.
Our view is that this $1 billion commitment represents
a good first step toward assembling the necessary package of
unguaranteed private lending commitments and planned public
offerings. I believe that the Clearing House banks, in particular, should consider a larger commitment than the $500
million which they have pledged. They have the capacity to do
so, and still keep the proportions of their investment portfolios invested in City or MAC securities well below 1976
and 1977 levels.
The Municipal Assistance Corporation also has held discussions with representatives of City and State employee
pension funds, concerning long-term lending commitments
from them.
Substantive negotiations with those entities have not yet
begun, but we anticipate that they will commence shortly. Our
position concerning the City pension funds is that they must
commit to buy unguaranteed City or MAC securities over the next
four years, just as the financial institutions have done. I real
ize that the City funds have supplied all of New York's long-term
borrowing needs since late 1975, and commend them for having
done so. I obviously do not expect them to continue as sole
lender, nor to increase the overall percentage of their assets
invested in City and MAC securities. But, I should point out
that if for the next four years, they simply reinvest the
principal of maturing City obligations that they presently hold,
the percentage of City's obligations that they hold will go down
from 35 percent to 24 percent. This is the case because their
total assets are projected to grow by approximately 34 percent
over the next four years.
New State Legislation
Let me now review several recent developments in New York
which relate to the conditions under which we would issue
guarantees. The New York State legislature has enacted two
bills that essentially meet the conditions regarding State
legislation which underlie our proposed legislation. First,
the State has enacted legislation to extend the life of the EFCB
and to alter some of its powers. This legislation generally
satisfies our requirement that the fiscal control and monitoring entity have powers no less extensive than the existing
EFCB.
- 18 The life of the EFCB has been extended for a period which
could run 30 years. While a sunrise-sunset provision has been
added, that provision is inapplicable so long as any Federal
guarantees remain outstanding. Under this legislation, so long
as Federal guarantees are outstanding, the EFCB has the power
to:
1. Approve, disapprove, and in some cases formulate
and adopt, the financial plan and any modifications thereto.
The financial plan is now a rolling four-year plan which
must be reviewed and approved each year. Revenue estimates
presented by the City may be revised by the EFCB. Subject
to certain narrow exceptions which will be discussed below,
budgets must be balanced in accordance with GAAP for fiscal
years beginning after June 30, 1981 and annual audits are
required by independent public accountants.
2. Approve or disapprove contracts (including collective
bargaining agreements of the City and the covered organization) and any proposed long-term or short-term borrowings.
In this regard, new strict limitations on the issuance of
short-term debt have been incorporated into the statute for
the first time.
3. Maintain a separate fund through which the cash
resources of the City and the covered organizations may be
controlled in appropriate circumstances. In addition, a
separate debt service fund has been created in the possession
of the New York State Comptroller into which all real estate
tax revenues and certain other revenues will be deposited
and applied to the repayment of outstanding bonds and notes.
In a related measure, MAC has been authorized to issue
an additional $3 billion of its bonds which are backed by
the moral obligation of New York State as well as $500 million in short-term notes maturing on June 30, 1978 which are
not backed by the moral obligation of New York State but are
secured by New York State aid payments. It is anticipated
that these notes will be sold to the City pension funds to
bridge their obligation to invest $683 million in long-term
City bonds.
The EFCB legislation provides two narrow exceptions
to the requirement that budgets be balanced in accordance
with GAAP. Changes in GAAP or changes in the rules of application of GAAP may be phased in with the approval of the
EFCB if immediate application thereof would result in a substantial adverse impact on the delivery of essential services.
- 19 Similarly, the EFCB may relieve the City from the requirement
that its budget be balanced in accordance with GAAP if, after
the beginning of a year in which a balanced budget has been
adopted, an event occurs which would require so drastic a
modification to the budget to achieve balance at year-end
that a material adverse impact on the delivery of essential
services would result. In the case of fiscal years ending
after June 30, 1982, the amount of any deficit which results
must be repaid in the next fiscal year. We believe both of
these limited exceptions are appropriate given the long-term
nature of the EFCB, and we would support an amendment to S. 2892
to accommodate them.
The $683 million Long-term Pension Fund'Loan Scheduled by
June30, 1978
At this point, I should comment on the matter of the remaining $683 million investment obligation of the City pension funds.
In 1975, the pension funds agreed, in the Amended and Restated
Agreement, to provide long-term financing for the City during
the period ending June 30, 1978. That agreement was part of
a package of arrangements among the several interested parties,
including the United States, that met the City's financial
crisis. Although a number of appropriate conditions were
included in the Agreement, none of them related to the prospects
for Federal financing assistance after June 1978. Yet certain
pension fund trustees have recently indicated that they do not
feel obligated to invest the $683 million because of uncertainties over the post-June 1978 period.
Mr. Chairman, as you know, Congress relied upon the longterm financing commitments of the pension funds in authorizing
Federal seasonal financing assistance. Treasury, in making
individual loans under the Seasonal Financing Act, has relied
upon the timely fulfillment of those commitments in order to
provide needed funds for the City. I might note, parenthetically,
that our proposal for guarantee authority over the next four
years is premised upon the making and fulfillment of new lending
commitments by the local parties, including the City pension funds.
Treasury's General Counsel has advised me that the outstanding
commitments of the pension funds are firm, binding contractual
obligations, and I expect them to be fulfilled. We would, of
course, not proceed with the program that has been proposed
if this commitment is not kept.
- 20 VI. The Administration's Financing Proposal
Background
Our evaluation of the City's financing plan is that it
is well-conceived and should achieve its objective. We have,
however, two reservations: First, our analysis of the Plan
leads us to conclude that the City can adequately provide for
its capital requirements by selling somewhat less — perhaps
$4-1/2 billion — than the $5.1 billion in long-term securities
during the years 1979-1982, which the Plan projects. Second,
we believe that this reduced level of long-term financing
can be assured with, more modest Federal assistance.
I want to emphasize, however, that we have concluded
that the City's solvency would not be assured in the absence
of any Federal lending assistance beyond June 30, 1978.
In this regard, therefore, we disagree with the conclusions
of the Report recently issued by this Committee on New York
City. While it is conceivable that if every contingency is
favorably resolved, no additional Federal lending assistance
to the City will be required, we do not believe it would be
responsible to risk bankruptcy should events prove this judgment wrong. New York City in bankruptcy will prove far more
expensive to this nation — both in expense and personal
sacrifice — than any modest form of assistance.
Let me now outline the reasons why I believe there must
be some Federal long-term lending assistance. Any long-term
financing plan for New York must rely on the sale to the public
of large amounts of MAC bonds and City bonds. The City's
own plan projects $1.85 billion of such public sales and your
Committee Report forecasts only modestly lower amounts.
The receptivity of public markets to those sales, however, is far from assured. Today there is no market for
City bonds at all. Moreover, the market for MAC offerings
in recent months has been quite limited, and last December's
$250 million MAC offering was barely completed. It is entirely
possible, therefore, that the public markets will not supply
the amounts of long-term capital which New York needs to meet
even its minimal capital needs. Unless there is a Federal
backstop, to assure that these amounts can be obtained, the
City's solvency simply cannot be assured.
We believe local private parties primarily the City
pension funds and the local financial institutions, can
supply a large portion of the long-term needs of the City,
but we cannot be certain that they will be able to supply
all of such needs.
- 21 -
the seasonal loan program, on a reduced and self-liquidating
bas
does
and
Specific Proposal
We proposed on March 2 that Congress (i) authorize the
Secretary of the Treasury in the four years ending June
30, 1982, to guarantee up to $2 billion in aggregate principal
amount of taxable New York City or MAC securities, such guarantees not to exceed 15 years, with a minimum annual guarantee
fee of 1/2 percent per annum payable on any outstanding guaranteed securities; and (ii) amend PL 94-236 to permit the City
and State employee pension funds to purchase City or MAC
securities during the 1979-1982 period.
On March 2, I testified that guarantees authorized
by the Congress would be issued only under a set of detailed
conditions. The current status of those conditions, and what
has been done to satisfy them, is as follows:
— For fiscal year 1979, I stipulated that the City
would be required to adopt a four-year budget
plan that by 1982 produces a budget balanced
in accordance with Generally Accepted Accounting
Principles (GAAP), and would continue to adopt
and adhere to rolling four-year budget plans
that for 1982 and thereafter are balanced in
accordance with GAAP. The City periodically
would submit to the Secretary financial statements as required. Our assessment of the City's
recently revised four-year budget plan already
has been described.
— New York State recently has enacted the necessary
legislation to ensure the existence of a fiscal
control and monitoring entity with powers no
less extensive than the current Emergency Financial
Control Board (EFCB). This entity would be in
existence for at least the life of the Federal
guarantees. I expect that this legislation will
be modified in a few areas described below.
New York State also has enacted appropriate legislation to facilitate the public sale of MAC longterm securities, and to provide appropriate security
and legal authority for such securities. Our position,
- 22 --
however, is that the State also must enact legislation
to expand the City's bonding authority as required for
the four-year financing plan and to permit pension fund
trustees to invest in City and MAC securities.
Federal guarantees will be appropriately secured by
Federal transfer payments to New York City and by
such payments to New York State.
The recently passed State legislation extending the
EFCB will be modified to include a requirement that
the City demonstrate that it has achieved market
access for its securities before the emergency period
can end and before the sunset provisions of the EFCB
legislation are applicable. We understand that this
modification is acceptable to all parties.
The City will engage independent bond counsel of
national reputation to pass upon the validity of
the State legislation and any guarantee agreement
entered into with the Federal Government. All parties
recognize that this may require certain technical
amendments to the legislation.
In my earlier testimony, I indicated that Federal guarantees
will be appropriately secured by Federal payments to the City and
a State funded debt reserve account or the pledge of an appropriate
amount of Federal transfer payments of the State. The bill before
your Committee provides that the Secretary shall withhold first
City and then State transfer payments in the event the Federal
Government makes payment under the guarantees. Furthermore, upon
payment under any guarantee, the Federal Government will be
entitled to the security provided by the City on the guaranteed
bonds and to a first priority on distributions from the fund
controlled by the EFCB. Since we believe this security to be
adequate, we have not required the creation of a State funded
debt reserve fund.
Role of the Guarantees in the City's 1979-1982 Long-term
Financing Plan.
A long-term financing plan for New York cannot work without
the cooperation of the relevant local parties -- the City
and State pension funds, the Clearing House banks and other
local financial institutions, and others. The
- 23 exact division of lending commitments among these parties
is a matter for detailed negotiation over the near-term
future in light of the prevailing conditions. It is clear,
however, that each of these key parties must make a major
lending contribution.
In general, I think that up to $2 billion of MAC
and City bonds can and should be sold to the public during
the next four years on an unguaranteed basis and additional
amounts to private lenders. Federal guarantees will be
issued only to the extent that the public markets and private lenders do not provide the necessary funds on an unguaranteed basis. However, it would not be my intention
to issue Federal guarantees unless other lenders to New York
City make significant long-term lending commitments on an
unguaranteed basis. The timing of the issuance of Federal
guarantees and the size of purchases of non-guaranteed
MAC or New York City long-term obligations by lenders will
have to be worked out as part of an overall financing package.
The precise form and coverage of the guarantees require
further negotiation. Among other things, however, the
guarantee would lapse if the guaranteed securities were
sold by the original purchasers.
It is clear to me, however, that Federal guarantees, on
the order of $500 million, must be issued during the first
year of the City's financing plan. This will be necessary
to demonstrate a Federal commitment to New York's future. It
will set the financial control mechanism in place and provide
the impetus to obtain the necessary commitments from private
lenders and the pension funds to purchase significant amounts
of unguaranteed bonds from the City or MAC.
It will be my intention, in the negotiations that will
take place with potential lenders, to keep the length of Federal
guarantees as short as feasible. Similarly, since we require
that a "best efforts test" be met before any guarantees would
be issued, we hope to avoid issuance of guarantees in the later
years of the Plan when hopefully the City will regain access to
the markets.
Seasonal Financing
My judgment is that New York can satisfy its own
short-term borrowing needs, provided that Federal guarantee
authority as outlined above is available concerning its
long-term financing. Before Congress enacts guarantee
- 24 legislation, however, New York should prepare a seasonal
financing plan satisfactory to the Treasury. I have asked
Mayor Koch to do so.
If my judgment changes over the near-term future on
New York's ability to meet its own short-term needs, I will
report accordingly to Congress.
Conclusion
We look forward to working with Committee staff on the
details of our proposed legislation. I also will be happy
to answer now any questions you might have.
0O0
SUMMARY
FY
REVENUES
OF
THIS
NEW
YORK
CITY
B U D G E T ^
1975 T H R O U G H FY 197 8 (ESTIMATED)
($ In Millions)
FY
1975
F\"
1976
FY '
1977
FY
1978
General Sources
Sales Tax
Personal Income Tax
General Corporation Tax
Water & Sewer Charges
Stock Transfer Tax
Financial Corporation Tax
Other
TOTAL GENERAL SOURCES
Real Estate Tax
Federal £> State Aid
TOTAL REVENUES
$
791
466
268
238
185
;i4
1,555
r~i7$Tr:
$
$
828
615
443
218
270
202
1,128
3,704
$
$
867
742
519
206
279
149
1,205
3,967
$
$
901
756
504
231
250
168
1,242
4,052
3,236
5,435
3,168
6,083
$12,009
$12,638
$13,303
987
1,269
$ 3,746
3,010
1,377
652
285
1,847
462
1,137
461
$ 3,774
2,481
1,325
669
292
1,747
597
1,209
873
$ 3,906
2,564
1,346
661
297
1,607
402
1,188
1,332
$12,033
$12,977
$12,967
$13,303
$ 968
$ 329
$ 2,000
$ 1,200
2,896
5,452
2,966
5,339
$11,965
3,482
2,345
1,187
654
282
1,827
•
EXPENSES
Social Services
Education
Health St Sanitation
Police
Fire
Debt Service (2)
MAC Debt service
Pensions (2)
Other
TOTAL EXPENSES
DEFICIT
Estimated Adjusted Deficit
Based on Treasury Estimates
Using GAAP
68
$
2,100
750
TABLE 2
NEW YORK CITY SEASONAL LOAN PROGRAM
BORROWING AND REPAYMENT SCHEDULE
CITY FISCAL YEARS 1976 - 1978
1976
Borrowing
Date
Repayment
Date
Amount
(Millions)
12/18/75
12/31/75
1/15/76
2/11/76
2/17/76
2/17/76
3/01/76
3/15/76
4/20/76-i^
5/2Q/76f'
4/2Q/76±/
S 130
240
140
250
80
100
250
70
6/30/76?/
6/3Q/76-?,
6/30/76-/
$1,260
Interest
Rate (%)
Interest Due
(Millions)
6.92
6.68
6.13
6.29
6.26
6.26
6.39
6.33
6.43
2.958
6.105
2.163
5.514
1.770
2.298
5.077
1.238
27.122
7.37
7.02
7.10
7.04
5.85
5.83
5.73
5.75
5.92
6.53
29.076
7.876
.827
.36 8
.315
.670
.526
4.874
4.466
88.398
6.65
6.80
6.85
6.93
7.36
7.38
7.46
7.54
7.58
7.75
7.73
7.75
7.26
15.796
5.142
8.670
10.063
2.490
5.297
12.518
2.376
14.791
6.274
1.842
7.814
93.075
1977
7/01/76
7/16/76
7/16/76
8/04/76
12/01/76
12/08/76
12/22/76
12/30/76
3/14/77
4/20/77-|^
4/20/77 T V
5/20/77^
6/20/77*/
6/20/77.1/
6/20/77i4
6/30/77J,
6/30/77- 7
$
500
150
200
225
200
200
200
170
255
$2,100
1978
7/05/77
7/18/77
7/18/77
7/29/77
8/16/77
8/16/77
9/19/77
10/04/77
10/04/77
12/05/77
12/28/77
12/28/77
4/20/781/
4/20/78 i?
5/20/787,
4/20/78-',
4/20/78 44
5/05/78 f/
5/20/781/
5/20/78 i/
6/20/78
6/20/78
6/20/78
6/30/78
$
300
100
150
200
50
100
250
50
275
150
50
200
T7875"
1)
2)
3)
4)
5)
Repaid
Repaid
Repaid
Repaid
Repaid
four days early.
two days early.
five days early.
one day early.
six days early.
TABLE 3
New York City's Four-Year Financial Plan
As Revised
($ In Millions)
Fiscal Year
1980
1981
1979
1982
REVENUES
3,189 $ 3,137 $ 3,126 $ 3,156
General Property Taxes
3,325
3,466
3,209
3,150
Other Taxes
834
856
815
886
Miscellaneous Revenues
923
973
977
1,187
Unrestricted Federal & State Aid
1,985
1,990
2,014
2,429
Federal Grant: Categorical
1,994
2,021
1,970
2,191
State Grants: Categorical
(100)
(100)
(100)
(100)
Less: Provision for Disallowances
379
251
109
529
Capital
435
443
426
417
Intra-City Revenues
$13,878 $12,827 $12,773 $12,914
TOTAL REVENUES
EXPENSES
Personal Service
Other Than Personal Service
Debt Service
MAC Debt Service Funding
General Reserve
TOTAL EXPENSES
Gap To Be Closed
5,762
6,038
1,516
462
100
5,643
5,556
1,416
474
100
5,744
5,704
1,321
497
100
5,828
5,885
1,248
555
100
$13,878
$13,189
$13,366
$13,616
—
$
(362) $
(593) $
(702)
ACTIONS TO CLOSE GAP
Federal & State Actions
City Actions
TOTAL ACTIONS TO CLOSE GAP
237
125
321
272
280
422
362
593
702
TABLE 4
NEW YORK CITY PROPOSED ACTIONS
TO CLOSE FY 1979 BUDGET GAP
Reductions of
Revenue
Expenditures
Increases (City Funds)
($ In Millions)
Total
Savings From Attrition:
Salaries
Fringe Benefits
Sub-Total
$
$
—
—
$ 72.6
3.6
$ 76.2
$
$
72.6
3.6
76.2
Other Savings & Revenues:
Board of Education
$ —
Dept. of Social Service
Debt Service
—
Indirect Cost Reimbursements on Fed. Grants 11.0
OTPS Cost Containment
Improved Billing 6
Licensing Procedures
6.0
Other Actions
2.3
Sub-Total Other
Savings & Revenues
$19.3
Total Savings & Revenues $19.3
$ 15.7
24.0
15-0
$
15 .7
24 .0
15 .0
23.0
11.0
23.0
1.5
6.0
3.8
$ 79.2
$
$155.4
$174.7
98.5
NEW YORK STATE ACTIONS
TO CLOSE FY 19 79 BUDGET GAP
Amount
($ in Willi
Revenue Adjustments
State Revenue Sharing $ *3.0
NYS Countercyclical Aid
Real Property Tax (Conrail and Amtrakj
Additional Social Service Review
".0
l^.u
22.0
$110.0
Expense Adjustments
State Education Aid $ ^^
SSI Cost Assumption
Wage Reporting Matchup
Audits of Voluntary Hospitals
Additional MMIS Savings
Drug Abuse Program Assumption
b
Total
6
^-^
!••>
10.0
6.0
5,5
$141.0
$251.0
TABLE 6
CITY FY 1979 CONTINGENT GAP-CLOSING ACTIONS
(IN MILLIONS OF DOLLARS)'
Specific Agency Expenditure Reductions
Further City-wide Cost Containment of
General Procurement Expenditures
Hiring Lag
Reestimation of Revenues and Expenditures
(net, to be included in the General Reserve)
TOTAL
$
TABLE 7
Summary of Federal, State, and City Actions
to Close Budget Gaps in Revised Plan
($ In Millions)
1979
Gap to Be Closed
Fiscal Year
1980
1981
1982
362
593
702
62
22
172
46
285
71
41
54
66
125
272
422
City Actions Planned
to Close Gap
Work Force Reduction
Other Than Personal Service
Cost Containment
Management Improvements
TOTAL
Remaining Gap to Be Closed
To be eliminated through
Federal & State Actions
beyond those included in
revised plan.
State Actions Already in
Revised Plan
250
Federal Actions Already
in Revised Plan
83
TOTAL
333
174
174
174
180
180
180
FEDERAL A I D TO NEW YORK CITY
CITY FISCAL YEARS 1973 - 1978
($ Millions)
TYPE OF AID 1973 1974 1975 1976 1977 1978
Categorical Aid $1,790 $1,783 $2,217 $2,262 $2,421 $2,808
Revenue Sharing
(including ARFA)
259
267
257
263
290
479
Total $2,049 $2,050 $2,474 $2,525 $2,711 $3,287
Source:
Temporary Commission on City Finances and City Comptroll
CITY FINANCING PLAN
USES OF FUNDS
Amount
Item
True Capital Spending
Funding of Operating Expenses
MAC Restructuring
MAC Capital Reserve
Bonding of State Advance
$
522
.900
-560
-250
.
-^"
$5,100
SOURCES OF BORROWINGS
City & State Pension Funds (USG Guaranteed)
MAC Private Placement: local financial
institutions
MAC sales to public
City bonds to public
* 90% USG guaranteed - $2,025
$2.25
1.000
1.510
V340
$5,100
THE SECRETARY OF T H E T R E A S U R Y
WASHINGTON 20220
June 2, 1978
Dear
The government is making every effort to reduce the
inflationary impulses of our economy. We recently pared
back and delayed our proposed tax cut; we are fighting
hard to reduce future budget deficits; we have taken
steps to reduce inflation-creating regulations; we have
directed our agencies to observe the principle of deceleration in all new or renegotiated Federal contracts. And
we have initiated politically difficult and painful wage
deceleration guidelines for Federal workers. On April 11,
President Carter announced that he would order a freeze on
the salaries of all Executive employees and seek to limit
increases in Federal white collar salaries to 5.5% this
year. The Congress is now considering imposing similar
restraints in high level pay on itself and on the Judiciary.
To be sure, we have much more to do. But government
cannot do the job alone. We must ask the private sector —
labor and business — to contribute to this critical effort
if we are to begin turning back the tide of inflation.
I am writing to ask you to implement within your own
institution the principle of wage and salary deceleration
that we are applying to Federal employees. In the past few
weeks, General Motors, Ford and AT&T have announced their
intention to put tight constraints on executive salaries and
other salaries over which they have control. Other business
firms have followed suit. We would like to hear a similar
Pledge from your organization.
We ask that you help us meet our objective of reducing
the economy-wide average increase in total compensation —
£ages and benefits (excluding legally mandated items such as
social Security taxes) — by at least a percentage point per
year, in particular, we seek to realize greater deceleration
- 2 -
in wages on the part of those workers who have experienced
the greatest gains in recent yeairs. If we can pull down
the rate of growth in these wages while preventing an
acceleration in the wage gains of others, we will be able
to reduce the average wage increase nationwide. I enclose
a memo from the Council on Wage and Price Stability
indicating how this can be accomplished within an institution
such as yours.
Please give this matter serious thought and notify me
soon whether you will cooperate in this critical endeavor.
I realize that this letter will hardly endear me to your
fellow executives. Most industries can think of one or another
reason for exempting themselves from this exercise. And
individually, no one wants a salary freeze or a reduction in
pay increases which they have become accustomed to. Yet
everyone mus.t contribute to the fight against inflation if we
are collectively to maintain healthy profits, a vigorous
economy and a strong dollar.
- Sincerely,
tCU
W. Michael Blumenthal
IMPLEMENTATION OF WAGE DECELERATION
"In order to reduce the average wage and salary increases
nationwide iL will be necessary to achieve substantia^ deceleration in the rate of increase in wages and salaries for
groups of workers who have achieved gains in recent years that
substantially exceed the economy-wide average. We have no
rigid guideline, -and the wage deceleration effort should be
characterized by a flexibility that reflects the widely-varying
o •
recent wage and salary trends of. various groups of worker;
.Furthermore, while some of the details of the program are
specified below, its actual implementation will necessarily
take slightly different forms in different industries, depending
upon the institutional peculiarities involved in the wage determination process in each industry. For example, in industries
such as banking and insurance, the focus of the deceleration
effort should be on annual salaries since most workers are
paid on that basis.
Our objective is to hold increases in total compensation
— wages or salaries and benefits (excluding legally mandated
items such as Social Security taxes) — significantly below
their average annual increase during the base period. For
example, a firm with a total quarterly payroll cost for workers
of $3.0 million would first deduct the cost of such items as
Social Security taxes,'Unemployment Insurance, and Workmen's
Compensation. If, in this hypothetical example, these items
totalled $200,000, the difference -- $2.8 million — would
represent the relevant total compensation expenditures for
this employee unit, including both salaries and payments for
private fringe benefits such as health insurance and pension
plans.
Total quarterly payroll cost $3.Cm
Less- employment taxes
(e.g., Social Security)
0.2m
Total compensation $2.8m
The firm would then examine its records and ascertain how
rauch this total compensation figure had grown over the 1976-77
period. For nonunion workers the compound average annual rate
QLAncrease over the two-year period would then be the basis
against which 1978 performance would be compared. Suppose this
compound annual average growth rate in compensation were 7.2
Percent. In this case compliance with the deceleration objective
would be achieved if in 1978 the increase in compensation were
ne
ld to 6.2 percent.
- 2 In situations where compensation is determined under the
terms of a collective bargaining agreement, the .base period is
the life of the contract rather than the calendar year 1976-77
period, and the relevant measure is the average annual increase
in compensation over that contract term. The rate of increase
should be figured separately for appropriate groups of recognized
workers — recognized bargaining units where there is collective
bargaining and traditional units of similar kinds of workers
where there is no bargaining.
In the case of executive salaries we are asking that the
rate of increase during 1978 be held to 5 percent or less.
June 6, 1978
[In response to inquiries concerning the report by the
House Committee on Government Operations on "Foreign Tax
Credits Claimed by U.S. Petroleum Companies"]
The question of whether U.S. oil producers operating
overseas could claim U.S. foreign tax credits for levies
paid to foreign governments had been under consideration for
many years before the Carter Administration assumed
office, with no decision having been reached. A fresh
review of the issue was immediately commenced and in
January 1978 the 1955 ruling that permitted such
credits to be taken was revoked. In view of the
complexities of the question, the length of time taken
to complete the review was not unreasonable. The
decision was made exclusively on the basis of tax
law considerations in the Internal Revenue Service and
the Treasury Department and after a review by the Secretary
of the Treasury who has the statutory responsibility for
all tax matters.
When an Internal Revenue Service ruling is revoked,
the Service's normal practice, which is explicitly
sanctioned in the Internal Revenue Code, is not to make
the revocation retroactive but rather to give taxpayers
a reasonable time to adjust their affairs in the light
of the revocation. This was the principle followed in
this case.
^ottmentoftheTREASURY
BHINGTON, D.C. 20220
TELEPHONE 566-2041
"•• *!' M H M M i
ADVANCE FOR RELEASE SUNDAY MORNING
June 11, 1978
TREASURY SECRETARY W. MICHAEL BLUMENTHAL
ON ECONOMIC POLICY
Following is the transcript of an interview with Secretary
of the Treasury W. Michael Blumenthal by Alfred H. Kingdon,
Editor-in-Chief of Financial World magazine on May 17.
The interview appears in the current issue of Financial
World reaching subscribers tomorrow.
*
B-963
*
*
*
*
MR. KINGON:
Mr. Secretary, for some reason this Administration
hasn't won the full confidence of investors and businessmen. To
what do you attribute this? What has gone wrong?
MR. BLUMENTHAL:
In the first place there is increasing
evidence of a shift and of increasing confidence by the business
and financial community that the Administration is following
sound, sensible economic policies that are consistent and easily
understandable-. The commitment to maintain a reasonable growth
rate, the commitment to put a tight lid on Government spending,
the identification in the April 11th speech by the President of
inflation as public enemy no. 1, the recent decision to trim the
size of the tax package in order to reduce the budget, the
continuing commitment to bring the deficit down and move it
toward balance — all of these are things that I think are
creating greater business confidence.
Obviously, also the fact that we not only had a good year in
1977, but all indications are that we will have a good one in
1978 and that the prospects for '79 look good...all of that is
helpful. I think the fact that the stock market has been moving
up and that the exchange markets have stabilized and the dollar
has strengthened all contribute to that. So I think we are in a
slightly different situation now than we were.
In the past, I think there were a number of factors. One of
them was simply the lack of familiarity with a new President and
a new Administration. Secondly, no doubt the fact that many
leaders in the business and financial community belong to a
different party and did not support this President when he was a
candidate, naturally caused some hesitation on their part and a
kind^of wait and see attitude. And finally, I think the lack of
confidence has been a reflection of some real factors, the real
factors being that we had a fairly long period when we
experienced high levels of inflation, high levels of unemployment, uncertainty in international markets, and a kind of a sense
by the business community that we no longer are masters of our
own economic fate in quite the way we used to be. That may at
times get put in terms of a particular Administration, but it is
really a general problem, and I remember as a member of the
business community having the same sense during the Nixon and
F
°rd Administrations. So I understand it very well. That kind
of uncertainty obviously is a fact of life, but I think the
Puces as such are more clearly understood and the situation is
improving.
• K1NG0N: Sir, to get specific for a moment — the
President, you, others in the Administration have stressed lately
tn
e tremendous need for capital formation and incentives for
^vestment. And yet when such a move, a direct move, emanates
trom Congress,- and of course .I am referring to the Steiger
Amendment,
the President
has you running
to the Hill in
ssence crying
foul and threatening
veto.upWhy?
-2MR. BLUMENTHAL:
It is important to stress that this
Administration is vitally concerned with the problem of capital
formation. That's been said repeatedly: I did it most clearly
in the speech to the Financial Analysts in Bal Harbour a week
ago. So it is not a question of whether, but how.
The tax bill that is before the Congress reflects a major
effort to increase the profitability of-business, to increase
cash flow for business. It is profitability of business and cash
flow that will cause more investment and hence greater capital
formation. The decision to try to achieve that by an across-theboard reduction in the corporate tax rate of a significant amount
was not taken lightly: it was not taken in a vacuum. It was
based on literally hundreds of people with whom I personally
consulted, large business and small business, in the financial
world and in the business world. And while there are many ways
of providing more resources to business, all of them agreed that
the highest priority was to bring the corporate tax rate down.
What I have been saying, and also in the recent letter that
I sent to the Congress on the Steiger Amendment, was that in the
first place we don't have unlimited resources available to us.
If we were to give up more than $2 billion of revenue for the
Steiger Amendment, we would not have it available for reducing
the corporate tax rate. And we think the corporate tax rate —
and business felt that way — is a better way of doing that.
Secondly, the Steiger Amendment is a "fat-cat" amendment.
The Steiger Amendment is an amendment that benefits more than 80
percent of those taxpayer groups who make more than $100,000 a
year. In fact it is a very regressive way of changing the tax
system because it actually reduces the effective tax rate for
those above $200,000 as compared to those who earn less. You
actually begin to pay less in taxes when you reach $200,000 than
you do at an earlier rate.
That is not the way to get capital formation: that is
certainly not the best way to get it. Which does not mean that
the question of the double taxation of dividends, the distinction
between earned and unearned income taxation and capital gains
taxation should not be reviewed at some point in the future. But
not at the cost of taking away the revenue for across-the-board
reduction in the corporate rate.
MR. KINGON: You referred to that in your response and said
the Steiger Amendment "would steal much of the revenue" earmarked
for corporate tax reduction. But is it not fair to say that it
could not equally steal from some other reforms that aren't
regarded by the business and investment community as so
important? I am sure you've seen the S. I. A. study, and Chase
out out a study. Econometrics also and unless the Treasury
economists are different, everyone seems to be concluding that
the effect of reducing capital gains taxes would be increasing
revenues.
-3MR. BLUMENTHAL:
If that were true, I would lead the parade of
those who would call for a drastic reduction in the tax treatment
of capital gains, because then we could in one fell swoop achieve
capital formation and balance the budget at the same time.
Unfortunately, reality is somewhat different.
The S.I.A. study achieves its result in a very simple way by
making certain assumptions, assumptions which ate not supported
by either fact or logic and that are quite unrealistic. As you
well know, what you get out of a computer depends very much on
what you put into the computer. They assume that the effect of
the Steiger Amendment would be: one to increase by 10 percent.
I believe it is, the price of all stocks — an assumption which
is off the wall. And two, they assume that those increases in
stock values would be realized, which means that everybody would
rush out to sell to realize those gains. That also is an
assumption that is not based on fact. In fact in a previous
study, which the same organization made but for a different
client, they had very different assumptions. So unfortunately
there is no basis that we know of for concluding, and the
Treasury does have different views therefore, that by a reduction
of capital gains taxes to the levels of pre-1969 we would gain
more than we would give up in revenue.
MR. KINGON: Can you tell me why the President and the
Administration seemingly abandoned the program for sweeping away
what Mr. Carter called "a disgrace to the human race," the
personal income tax code, and substituted for it a whole series
of reforms that are growing increasingly modest as a result of
Congressional intransigence? Why did that happen? Was it a
result of the conflict within the Administration?
MR. BLUMENTHAL: The President remains committed to
substantial reform of the tax system and I certainly agree with
him wholeheartedly that this kind of reform is a highly desirable
thing. We began the survey of what could be done when he first
came into office by looking at all elements of the tax system
that theoretically could be reformed. We selected from that list
and that was a very long list — Congress being an incremental
place and not an institution that easily, in one bill if you
will, totally scraps a tax system and substitutes another one —
clearly that whole long list could not be implemented in one fell
swoop. What the President selected from that, in view of the
fact that he felt that a tax bill was essential (and he still
feels that way in this year of 1978), was a package of reforms,
involving about $9 billion of gained revenue — that and some
losses of revenue — that he felt was achievable in one year.
This does not mean that at some point in the future you might not
come back to attempting suggestions of additional reforms.
That package has not changed. The Administration continues
to feel that that is a sensible package and is continuing to
fight to get it implemented. What has changed is the fact that
there are many members of Congress who think that even that is
-4too much; that the President's efforts to make a beginning on
reducing the degree of disgrace to the human race inherent in the
tax system is being too ambitious. And so the discussion at the
moment between ourselves and the Congress is whether all, or if
not what portion, of those reforms he is recommending can be
adopted. But we have not scaled back.
MR. KINGON: This brings to mind a larger question. Earlier
this week I came across a corporate executive who was now
thoroughly confused because of the reaction to the Steiger
Amendment as to whether the Administration really is for tax
incentives to stimulate investment now. I want to ask you why
there have been so many confusing signals in the history of this
Administration sent out to business and the investment community
— and I am think of the capital gains tax thing and I'm thinking
of the initial tax reform program when it seemed to change before
the program was promulgated. There was a great deal of confusion
about the Administration's attitude toward the dollar when it was
declining, and the energy program as well. It seems to many that
there is a great deal more confusion than in past
administrations. I wonder if you could address yourself to that.
MR. BLUMENTHAL: I most certainly can. And I would have to do
so by taking issue with you that the Administration has changed
the signals on the basic policies in the economic field that it
wishes to follow. We never suggested that there should be a
reduction in the capital gains tax treatment, so there's no
change in signals. At no time did we ever suggest that that
should be done. We did consider whether or not it would be
possible this year to make a major move toward the elimination of
the double taxation of dividends and to bring the marginal tax
rates down substantially below 70 percent ideally down to the
same level of 50 percent — and in thinking of the capital gains
tax thing and I'm thinking of the initial tax reform that context
eliminate preference for capital gains. We never suggested or
even internally discussed that capital gains treatment should be
reduced. Those three things, if they could be done together,
would do a great deal to stimulate capital formation. So that
it's not fair to say that we changed signals. Mr. Steiger sent
up a signal, but we didn't. That's point number one.
Secondly, on the energy legislation I am not aware of the
fact that the Administration ever changed its view on the need
for such legislation, on the nature of that legislation — that
legislation was put forward last year in April. The
Administration has been fighting as hard as possible to get it
accepted by the Congress in a form as close as possible to what
was suggested and we've been having great difficulty. But that
has not been for lack of trying. I remain confident that with
three pieces approved, the fourth already virtually agreed to and
the fifth in the works, we will be able to achieve it.
-5You mentioned a third point — the dollar. I think the key
characteristic of our exchange rate policy has been its
steadfastness. We have never changed signals on it. We said all
along that in a world of floating exchange rates we cannot and
will not step in to support a particular rate or a particular
range within which the dollar should trade in relation to certain
other currencies. We have never wavered in that regard and we
always explained why supporting a particular rate was not a
sensible.
And we continued to follow that policy. We always
said that we would obviously collaborate closely with other
countries and other finance ministries and central banks to seek
to eliminate disorderly movements in the exchange markets. That
we have done. That we have continued to do. We always said that
we were interested in a strong and stable dollar; we never said
anything different. The perception in a nervous market where the
dollar was declining for a variety of reasons may have been
different, but not because of anything that we have said.
Finally, what is important and what needs to be emphasized,
and I hope you will do so, is the fact that from the beginning,
although people didn't believe it and I hope they believe it now,
the President said that he's going to do his darndest to balance
that budget by the end of the first term. From the beginning he
said, and he identified it very clearly again in the January
economic message, that he is going to put a tight rein on Federal
spending, which he is doing. He's said as recently as April 11th
that he is going to veto any spending legislation outside of what
he had proposed. From the beginning he said he is going to get
Federal expenditures down to the traditional level of 21 percent
of GNP, that he is going to keep taxation as a percentage of
personal income down to moderate levels and that he is going to
rely on the private sector to provide the jobs. Those are the
basic things that we have always said and that we are doing.
MR. KING0N: I suppose my question is not to the substantive
merits of what you're saying but about certain changes that were
made. For example, I believe at one time you were quoted about
the double taxation of dividends. The Administration tax plan
was going to do away with them. And when the final bill came out
it seemingly disappeared, and now you're promising to reconsider
it again. That's what I am referring to — changes as you go
along to implement these programs after announcements to the
contrary.
MR. BLUMENTHAL: Well, I have never been associated with an
organization in which you do not study a range of problems,
consider various alternatives and make your selection based along
certain general policy lines you have laid out for yourself as to
how to achieve it. There will always be various alternatives and
the newspapers and media will always be busy ferreting out
information on what is being considered. As long as the basic
line doesn't change these things are there.
-6Now the reason why we did not choose to go forward with the
double taxation of dividends is because it was always clear that
that, together with the bringing down the high marginal rates and
having the same rate of taxation for capital gains treatment, was
a package. It has to be a package. These can't be handled in
isolation. And it became clear that that was a sufficiently
complicated .thing to do in one year since there was a lot of
different opposition to different pieces of it, that it would
take too much time to do it. So we took a more limited thing and
we followed the advice of the business community, which is to go
for a deep cut across-the-board.
MR. KINGON: I presume what you are saying to me is that you
still have every reason to expect the budget to be balanced by
the 1981 budget; that you will at some point introduce the idea
of doing away with the double taxation of dividends and I gather
you are heading toward wiping out the distinction between earned
and unearnned income.
MR. BLUMENTHAL: I think you are overstating what I was
saying, so let me be very specific. The President's commitment
to work to achieve budget balance by the end of his first term
remains strong — as strong as it has always been. In my
judgment, the opportunity to move substantially toward that goal
or to achieve it in an economy of our size — whether it's $5
billion of $10 billion either way doesn't really matter, but to
get close to it — I think the opportunity to do that by fiscal
'81, which is the end of his first term, remains good and I am
optimistic that we can get quite close to it if not achieve it.
I certainly personally believe that when this tax bill is
finished, when this year is finished, the job of improving the
tax system is not finished. We will have to review it, this
Administration and future Administrations, in order to continue
to make progress on it. I cannot tell you exactly what will be
proposed the next time. I personally happen to believe that the
double taxation of dividends, the high marginal rates on unearned
income and the question of capital gains remains an issue, and I
would like to see action on it at some future date. I know that
the President feels the same way. Whether that will actually
happen or not I cannot tell you and I hope you won't write that
we're sending mixed signals again.
MR. KINGON: Your colleague Mr. Strauss is reported again in
the press to have said that he will need about eight months to
see if this voluntary program, jawboning if you will, will,
against a wage and price increase will work. Frankly, what
possible evidence does he or you or the Administration have that
a six-month jawboning program will make a dent in a
two-generation inflationary consciousness?
-7MR. BLUMENTHAL:
I don't think anyone can pretend or has
suggested that in six or eight months the deeply embedded problem
of inflation in the United States economy will have been licked.
I haven't seen the precise quote to which you refer, but I would
be very dubious that Bob Strauss really said it in quite that
way. I think what is a possibility is that within a period of
time, such as six or eight or ten months, one can begin to see
how much progress we are making, whether we are making any
progress at all and I presume that's what he was referring to.
think that in the course of this year, given the fact that the
president has taken some very specific steps to show that the
Government is going to do its part to deal with the inflation
problem and we have a large responsibility in that area, the
general promises of support that we have received from the
buisness community and from labor will be translated into the
specific decisions that have to be made in various labor
negotiations and into price decisions on the part of the business
community.
MR. KINGON: Let me ask a more general question. Given the
anticipated budget deficit for this year, approximately $50-plus
billion, and the early indications of next year and last year's,
is there really any possibility of gaining control over the
inflationary forces without a much sterner fiscal policy?
MR. BLUMENTHAL: I believe that we need a very stern fiscal
policy. The President is committed to one. The recent action to
reduce the size of the tax cut and the statement that he made in
that regard clearly indicates his commitment to a very tough
fiscal policy. I think that tough fiscal policy will reflect
itself in steadily decreasing budget deficits in '80 and '81.
And I think that that will be a significant contribution to
dealing with the inflation problem, but it will not be the only
thing that needs to be done. And I think there's a commitment to
do that.
MR. KINGON: Recently, Mr. Eizenstat criticized Mr. Miller and
the Federal Reserve by noting that the steps taken to allow for
interest rate rises and I am quoting here "aren't the ones we
asked for" and "aren't the ones we have applauded." Do you share
that feeling?
MR. BLUMENTHAL: I think Mr. Eizenstat probably got a bum rap
here; I don't think that he meant to criticize. Taken at its
r
ace value I agree with the statement. We did not ask for it and
w
e did not applaud it. I have followed the policy of not
commenting either positively or negatively on actions which the
federal Reserve takes. I followed that policy when Arthur Burns
*as the chairman and I intend to and have followed it with Bill
Miller and intend to continue to follow it. I don't either
condemn it or applaud it. Nor do I ask for either a higher of a
lower Federal funds rate.
-8I understand what the Federal Reserve did and I understand
the reasons for it and I am hopeful that as the fiscal policy of
the Administration is increasingly tight, as it is going to be,
the need for an every-tighter monetary policy will' abate for
those two things are part of different ways of dealing with the
same problem. But I don't really think that Mr. Eizenstat was
seeking to criticize the Federal Reserve. If he was, you will
have to talk to him. As far as I am concerned. I don't
criticize them. I don't applaud them. I don't ask for
particular action. They have their responsibility; they carry it
out. I have enough responsibilities here that I am struggling
with.
MR. KINGON: Mr. Strauss made a speech in which he was quoted
in part as excoriating the country's "I'll grab mine and run"
psychology. What interested me was that he praised General
Motors and Chrysler for promising to hold their price boosts to
less than the average of the last two years. And this raises a
question in my mind. Is this going to be a standard practice of
the Administration, and more to the point if, say in response to
free market conditions or added costs companies raise prices more
than in recent history, will they be singled out for abuse?
MR. BLUMENTHAL: I would certainly hope that the
Administration abuses no one. That would be inappropriate. I
would hope that no senior official in the Administration will
ever be abusive. I do believe that the deceleration standard,
which is a voluntary standard and which clearly has to be applied
on a flexible basis depending on the circumstances of each
individual price and wage decision, is a reasonable standard. I
believe what Bob Strauss was saying was to indicate the
appreciation of the Administration for the commitment by General
Motors and Chrysler to try to live with this standard. I think
you can expect that any company or union that makes that
commitment or that lives by that standard can certainly count on
the approval and approbation of the Administration similarly.
I would think that those who could do so but fail to do so
probably if it's a serious case will be criticized — not abused
— but they will be criticized. And I think they should be
criticized, for the fight against inflation is one that we must
wage together. It is just not acceptable for labor and business
to say it's all the fault of the Government, just as it would be
quite inappropriate for us to say it's all the fault of big
business or it's all the fault of some of those large unions. We
are all in it together. We all have a role to play. I think it
is the responsibility of the Government to approve of those who
do their part and to voice concern about those who do not.
MR. KINGON: Turning to the international area, are you
satisfied now that the dollar has been effectively stabilized and
quite apart from the obvious fact that it is trading where it
ought
be fairly
by the valued?
very nature of the market, are you satisfied
that itto is
-9MR. BLUMENTHAL:
I am not in a position to indicate where I
think the dollar ought to be and whether it is fairly valued or
not. I have learned that the Secretary of the Treasury cannot be
in that position. I am satisfied that the disorder which
characterized exchange markets in the early part of the year,
around January, seems to have been eliminated, seems to have
abated. I think we have enough resources and a good enough
system of cooperation and contact with the Germans and the
Japanese and others to prevent that from happening in the future.
I am obviously encouraged by the fact that the dollar has
strengthened in relation to certain other currencies, which seems
to indicate that the market judges the situation to be more
positive and our policies to be reasonable. I see nothing in the
future that is likely to change that, and I am encouraged by
that. But I am not in a position to indicate that this level is
the right or the wrong level.
MR. KINGON: Even at this date the media reported that a lot
of our allies abroad seem to be unhappy and distressed over
American international economic policy — so-called pressures for
them to reflate — and our lack of, for want of a better term,
leadership among our friends. Do you think this criticism is
fair? How would you assess the relationship now between the
United States and its principal allies?
MR. BLUMENTHAL: I think the relationship between ourselves
and our principal allies is good. I think there is a large
measure of agreement on what the problems are and how we must
approach them together. It has to be understood that there are
many strains and stresses which work on individual Governments,
and that there is to some extent a sense of concern amongst all
of us that individually or collectively it is very difficult to
deal with these problems in the short run. Under those
circumstances it is perhaps not surprising that some individuals
in some of those countries tend to, with a certain sense of
frustration, look to us as the largest economic power in the
world and say to us: "why don't you do something?"
But basically amongst the leaders of the world and the
responsible officials, my counterparts — the ministers of
finance — there is a considerable amount of agreement on what
the problems are and what we ought to do about them. That was
again reflected in the meeting of the ministers of finance at the
IMF meetings in Mexico. I think you will again see it reflected
in the summit meeting that will take place at Bonn in July.
It relates to the absolute necessity of bringing the trade
n
egotiations to a successful conclusion this year, which is
certainly something in which the leadership of the United States
is widely acknowledged.
-10It relates to the need to maintain a strong and stable
dollar and to work together to prevent disorderly condition's in
the exchange markets; that certainly is something that we are all
agreed on and doing quite well together. It relates to the need
to work on the fundamentals, each in our own country. We agree
with our allies and friends that we need to bring inflation under
control. We need to get that-energy legislation passed. We need
to get the budget into balance. Everybody tells us that. We
agree with it. There•is no problem there. The Japanese
certainly agree that they need to get their surplus in their
trade and current accounts down. Mr. Fukuda was here to see the
President and strongly emphasized the point that he was doing all
he could. And the Germans and we and others agree that they need
a proper level of growth in order to play their part in Europe
and in the world to bring the rest of the world out of the
recession.
The fact that this year the growth rate in Europe and in
Germany will be faster than it was last year, and therefore the
differential in growth rates between ourselves and the European
countries is narrowing, is an indication that we are, broadly
speaking, moving in the same direction and that we are following
roughly analagous policies. It is understandable that at various
times people who are not close to this — bankers or businessmen
who get nervous when the dollar goes down too far — tend to say
things which get reported in the media as being indications of
great concern or lack of leadership. It is easier to call for
leadership than to be specific about what is meant by it.
MR. KINGON: If I had the opportunity to sit with you a year
from today, what would you like to see changed in the American
economic equation?
MR. BLUMENTHAL: I would like to see the rate of inflation
below 6 percent. I would like to see some further progress in
reducing unemployment in the hard-core pockets where it is still
very high — amongst the blacks in the inner city, other
minorities, the very young people starting out. I would like to
see the energy legislation enacted and active consideration being
given to the next stage of energy legislation that will promote
production of additional energy in this country. I would like to
see a trade negotiation successfully completed so as to hold back
the pressures for protectionism, and a relatively stable
international exchange market. I would hope that a year from now
we could anticipate another year of record corporate profits as
we have had in '77 and likely to
have in '78, look forward to one
O00O
in '79 and look with some equanimity at 1980 being another good
year .
FOR RELEASE ON DELIVERY
EXPECTED AT 9:00 A.M., MST
THURSDAY, JUNE 8, 1978
REMARKS BY H. DAVID ROSENBLOOM
INTERNATIONAL TAX COUNSEL
BEFORE
MULTISTATE TAX COMMISSION
DENVER, COLORADO
FEDERAL INITIATIVES AND STATE TAX POLICIES
I appreciate this opportunity to discuss federal
initiatives and state tax policies. Since I am directly
concerned with one particular aspect of this subject —
Article 9(4) of the proposed income tax treaty with the
United Kingdom — I have taken the liberty of limiting my
remarks to that highly controversial matter. I do not expect
these observations to quell the controversy, but perhaps a
fresh examination of the issues may dispel some
misunderstandings and thereby prove useful.
Description of Article 9(4)
The best place to begin, I think, is with a summary of
Article 9 (4) .
As you know, that provision is intended to limit the
application of the so-called "unitary" method of determining
the income subject to a state's taxation. The limitation
applies where an enterprise doing business in a state is
either: (1) a resident of the United Kingdom (i.e., a branch
of a U.K. company) or (2) controlled directly or indirectly
B-964
-2-
by a U.K. resident (i.e., a U.S. subsidiary of a U.K.
company). In either case, Article 9(4) declares that, except
as otherwise provided in Article 9, a state seeking to
determine the income of the enterprise may not take into
account any income or expenses of related companies which are
residents of the United Kingdom or of a third country.
Article 9(4) does not preclude application of the
unitary method to a single enterprise doing business in more
than one state, and to any related U.S. company. Moreover,
if the enterprise doing business in the state is a U.S.
corporation, Article 9(4) does not prevent application of the
unitary method to any related company to the extent that its
capital is owned by that U.S. corporation. Finally, it
should be clear that Article 9(4) does not apply at all if
the enterprise doing business in a state is ultimately
controlled by a resident of any country other than the United
Kingdom.
There are two other interesting aspects of this
provision. First, Article 9(4) uses a "doing business"
standard as the threshold for state taxation. This standard
is very broad — much broader than the "permanent
establishment" test required for federal taxation of British
business income. The permanent establishment standard is, of
course, the one currently employed in tax treaties throughout
the world.
Second, Article 9(4) begins with the words "except as
specifically provided in this Article." Article 9(4) is,
therefore, subject to the other specific provisions of
Article 9, including Article 9(1), which reads as follows:
"Where an enterprise of a Contracting State is
related to another enterprise and conditions are
made or imposed between the two enterprises in
their commercial or financial relations which
differ from these which would have been made
between independent enterprises, then any income,
deduction, receipts, or outgoings which would, but
for those conditions, have been attributed to one
of the enterprises but by reason of those
conditions have not been so attributed, may be
taken into account in computing the profits or
losses of that enterprise and taxed accordingly."
-3-
This is, of course, a restatement of the arm's length
standard that appears in slightly different terms in section
482 of the Internal Revenue Code.
It seems reasonably clear
that, as long as a state is seeking to reach an arm's length
result, and as long as a taxpayer is permitted to submit
independent proof addressed to that point, formulas designed
to approximate arm's length conditions are permissible within
the contemplation of the Article.
Background of the Treaty Provision
For several years now, a number of capital exporting
countries have questioned the application of the unitary
method to international businesses based in their countries.
They have argued that tax treaties generally provide that one
Contracting State may not tax the business profits of an
enterprise of the other Contracting State unless the income
is attributable to a permanent establishment in the first
Contracting State. They perceive the unitary system applied
in the international context as reaching profits which not
only may not be attributable to a permanent establishment
located in the taxing state but which may have nothing
whatever to do with the taxing state. Although existing U.S.
treaties apply generally only with respect to the Federal
income tax, foreign countries have suggested that some state
practices violate the spirit of our agreements.
In addition, foreign governments have noted the
administrative burdens which compliance with unitary systems
can impose in the international context. They have pointed
out that the records of their worldwide business groups may
not be maintained in dollars, or kept in English, that they
may have only bare voting control of some subsidiaries, and
that they may not have the personnel to keep pace with state
requirements.
As a result of such complaints, the Treasury sought for
several years to achieve an informal resolution of the matter
on a basis that would be satisfactory both to other countries
and to states. We were not successful, however, and
consideration was then given to a treaty resolution. The
British made a strong case for Article 9(4), and they made
major concessions in the proposed treaty concerning the
treatment of dividends and recognition of the U.S. rules for
allocating deductions. It was thus considered reasonable to
include a limited provision dealing with the unitary method
in the proposed treaty with the United Kingdom.
-4-
The Debate
As a consequence, the past two years have witnessed an
unparalleled debate over the proposed treaty — and
specifically over Article 9(4). In my view this is a good
and a healthy thing. This treaty, and specifically Article
9(4), raises major questions of tax policy and federal-state
relations, and a rational discussion of these questions can
only be beneficial.
The issues raised by Article 9(4) can be stated in the
form of two broad questions. First, whether as a matter of
principle any federal involvement in state taxation practices
is warranted. And second, assuming that some federal
involvement is warranted, whether the specific provisions of
Article 9(4) are reasonable and appropriate.
On the first of these questions, the principle of
federal involvement, I do not believe there is much room for
doubt. State tax practices are not wholly immune from
federal involvement. The principle of such involvement
derives from a sound constitutional base and was clearly
articulated in 1959 when Congress passed Public Law 86-272
(15 U.S.C. 381), establishing minimum jurisdictional
standards for state taxation of multistate business. The
principle of federal involvement with state tax practices
through exercise of the treaty power was established even
earlier—when the present treaty with the United Kingdom was
ratified by the Senate in 1946. That treaty and many others
since have prohibited states and municipalities from using 9J
their tax systems to discriminate against nationals or
residents of the treaty partner.
Article 9(4) does not establish the precedent for
federal involvement in state tax practices — that precedent
exists already. What, then, concerns states so much in
Article 9(4)? Perhaps it is the fear that Article 9(4)
signals an era of ever more expansive federal involvement in
their affairs.
Although I cannot speak for Congress on this point, I
assure you that the Treasury views Article 9(4) as a narrow
response to a particular problem of international tax
relations, and not as the opening shot in an ever widening
campaign to restrict state tax policies. As Secretary
Blumenthal has written to every state governor, "the Treasury
has no intention of amplifying the provisions of Article 9(4)
in treaties. We intend no broader limitation on state taxing
-5-
powcrs. Specifically, we have no intention of supporting
limitations on the unitary method with respect to U.S.
controlled multinational groups or with respect to income
from purely domestic commerce." The Treasury stands by that
commitment.
We do intend, in appropriate cases, to negotiate other
treaties with a provision similar to Article 9(4). In no
event, however, will the provision be any broader than
Article 9(4) itself. Moreover, I assure you that there will
be ample public notice of all future treaty negotiations and
I invite you now and in the future to work with us to refine
and perfect the approach to be taken in any future treaty
provision dealing with the unitary tax issue.
I do not believe that we at the Treasury and you in
state tax administration should be eternally at odds on this
subject. Article 9(4) is- not symbolic of anything more
profound than what it purports to be: a narrow and
reasonable response to a real problem. It is true that the
problem involves state tax practices, but it also involves
international relations — an area where, I believe, the
legitimacy of federal action cannot be questioned. So I say
tc you: let us work together on this matter. If Article 9(4)
can be improved, we are certainly open to your suggestions.
I have indicated several times that I think Article 9(4)
is both reasonable and appropriate. Let me now explain why I
have come to that conclusion. I realize that some of these
considerations have been articulated in the past, but it may
nevertheless be helpful to consider them again in the present
context.
First, the arm's length standard, not the unitary
method, is the internationally accepted method of dealing
with the misallocation of income among related companies.
This standard is reflected in the OECD Model treaty as well
as in all of the income tax treaties to which the United
States is a party. In fact, in the OECD Model treaty the
rule is intended to apply to subsidiary levels of government,
although U.S. treaties have not previously adopted the rule
at the state and local level.
Since most countries in the world use an arm's length
standard to determine the income of an entity in a corporate
group, they find it confusing when our states insist on a
different standard. Furthermore, the use of a different
method by one jurisdiction raises a real possibility of
international double taxation. Other countries ask this
-6-
question, which I as a treaty negotiator find difficult to
answer: If the United States as a nation finds it possible
to accept the internation^l standard, why is it so
unreasonable to ask the fifty states to tailor their
internationally sensitive tax practices accordingly?
Second, the particular complaints which foreign
countries have raised—and which I have previously
summarized—in regard to the international implications of
the unitary method seem, at least in some cases, to be
justified. The unitary method does assume that profit rates
in different units of a corporate family will be more or less
the same. This assumption is convenient, but it is also
arbitrary and in the international area it does not seem
justified. Application of the unitary method to
multinational corporate groups does entail burdensome
record-keeping and reporting requirements. Particularly when
there is no transactional nexus between related corporate
entities, the burden appears unnecessary.
Since the complaining party*with respect to these
problems is a foreign country concerned about the treatment^
of its residents in the United States, a treaty solution isT
appropriate. Moreover, dealing with such a problem in the
treaty context has definite advantages. It permits the
United States to obtain concessions in return for concessions
that it makes, and it permits the achievement of reciprocal.
protection for*our citizens and residents. Furthermore, a
treaty solution demonstrates to the world what the United
States thinks appropriate in the area of international
taxation — a particularly important point when we consider^
the arbitrary tax formulas that some countries have sought to
apply to U.S. citizens and residents.
6
In addition to the seeming reasonableness of the British
position in regard to the unitary method, and the
appropriateness of a treaty provision to deal with this
issue, it is worth emphasizing that the proposed treaty with
the United Kingdom is, on the whole, highly advantageous to
the United States—and by the "United States" I mean U.S.
investors, the Treasury, and the states. One of its most
important provisions obligates the United Kingdom to make
substantial refunds of taxes to American investors in United
Kingdom corporations. A transfer of these substantial
sums—hundreds of millions of dollars—has the effect of
lowering effective corporate rates in the United Kingdom and
thereby generating far fewer excess foreign tax credits than
-7-
would otherwise be the case. Moreover, as Secretary
Blumenthal has pointed out, large transfers from a foreign
Treasury to the United States economy should help both our
balance of payments and the value of the dollar in foreign
currency markets.
From the standpoint of international tax relations, the
proposed treaty is equally significant. It is the first
treaty ever to reconcile successfully a classical system of
corporate taxation such as ours with the type of integrated
system currently in place in many developed countries.
Without such a reconciliation, United States investors
encounter discriminatory taxation in countries having such
integrated systems. We are hopeful that this aspect of the
proposed treaty will serve as a model in our current treaty
negotiations with France, Germany, Canada, and other
countries that have integrated systems similar to that of the
United Kingdom.
Despite the limited scope of Article 9(4), despite the
fact that it is addressed to a real problem, and in spite of
the benefits of the treaty as a whole, many objections
continue to be raised. Let us examine them.
Most commonly heard is the point that states restricted
by Article 9(4) will be unable to prevent tax avoidance by
artificial pricing. It must be remembered, however, that
Article 9(4) restricts the use of the unitary method only in
limited situations. And in those instances where the
limitation applies, the proposed treaty makes it clear that
states may use the arm's length method for taxing foreign
enterprises doing business within their borders. Not only is
the arm's length method the one universally accepted in the
international community and the one used by the federal
government; I am under the impression that it is also the one
used, with respect to international business income, by most
of the states.
Treasury recognizes that the administrative resources
available to state governments may not permit them to make
the same kind of intensive transfer price investigations that
Federal tax authorities are able to undertake. For this
reason we have repeatedly assured states that they will have
access to data derived from federal tax audits. Furthermore,
it seems reasonable to read the treaty in such a fashion that
the United States competent authority can obtain information
from the United Kingdom in order to ensure that Article 9(4)
will not be abused. Thus, I do not believe the limitation in
Article 9(4) materially impairs a state's tax audit ability.
-8-
It has also been argued that Article 9(4) will lead to a
substantial loss of state tax revenues. This contention
calls for some careful analysis. The information available
to us indicates that the effect of the provision on state
revenues has been overestimated. Some California
authorities, for example, have estimated the effect in
California to be $15-$20 million per year. Since the
California corporate tax rate is 9 percent, and since Article
9 permits the states to tax the income taxed by the federal
government, an estimate of a yearly $15-$20 million revenue
loss implies that between $166 million and $222 million of
income from United Kingdom investment in California is
escaping all taxation in the United States every year. That
does not seem correct.
It may be added, parenthetically, that Article 9(4) does
not have any negative revenue impact on most states because
the great majority of states do not use the unitary method in
a way that Article 9(4) limits.
Finally, it has recently been alleged that Article 9(4)
will stimulate foreign investment in U.S. farmland. We at
Treasury do not understand this concern. The proposed treaty
does not in any way create a tax preference for foreign
ownership of U.S. farmland. The proposed treaty contains no
provisions specifically addressed to the taxation of
farmland. The treaty does provide in Article 6 that U.S.
real property income is taxable in the United States under
normal Federal tax rules. This would include income derived
from farmland. Thus, the treaty most certainly would not
prevent the states from taxing farm income.
Nor can it plausibly be contended that Article 9(4)
would erect a substantial impediment to such taxation. The
wide market for agricultural products and the ready
availability of arm's length prices for agricultural
commodities preclude the artificial shifting of farm profits.
In fact, farm income is surely one of the types for which
application of the arm's length standard is easiest.
In closing, let me express a personal view. I think a
reservation on Article 9(4) would raise the substantial
possibility of a large loss of benefits to the United States.
A reservation would invite the British to review the new
balance of concessions. I do not believe they will be eager
to endorse, without change, a treaty in which Article 9(4) is
missing.
-9-
This treaty is good and necessary for the United States.
It has flaws — what complex document does not — but it
represents an international agreement that our country should
be happy to accept. Given the Treasury's assurance that
Article 9(4) does not portend any greater federal initiative
in state tax policies, given our willingness to assist you in
seeing that Article 9(4) does not lead to abuses, given the
commitment of our British colleagues that after ratification
the treaty will be subject to continuing review, analysis,
and—if necessary—correction, I submit that the proposed
treaty is worthy of support as it stands.
*
*
*
FOR IMMEDIATE RELEASE
June 7, 1978
Contact:
Alvin M. Hattal
202/566-8381
TREASURY DEPARTMENT STATEMENT
Comment on the proposed firearms regulations ends on
June 30. The Treasury intends to review all the materials
received in order to determine whether or what revisions to
these proposals are appropriate. The Treasury Department
will continue to consult fully with Congress as it does so.
If it is decided by the Treasury to promulgate these regulations or revised regulations, the Treasury would then
request the necessary funds from Congress.
The vote today on the rider to the Treasury's appropriations bill does not change this schedule. The rider, which
prohibits the use of funds by the Treasury to implement
the proposed regulations, was opposed by the Treasury.
*
*
*
Attached is a June 2 letter from Treasury Deputy Secretary
Carswell to Representative Tom Steed, Chairman of the Treasury,
Postal Service and General Government Subcommittee of the
House Appropriations Committee.
B-965
THE DEPUTY SECRETARY OF THE TREASURY
WASHINGTON, D.C. 20220
JUN 21978
Pear Mr. Chairman:
Last week the Senate Subcommittee on Appropriations
decided to approve the budget of the Bureau of Alcohol,
Tobacco and Firearms, substantially at the level requested
by the President. Prior to the Senate Subcommittee's decision and in response to their request, we provided written
assurances concerning the Treasury Department's plans
regarding certain proposed firearms regulations. These
assurances were consistent with those given in testimony
by Assistant Secretary Richard J. Davis to the House Judiciary
Committee. Specifically the proposed Fiscal Year 1979 budget
contains no funds to implement certain proposed firearms
regulations. Therefore, if a decision is made to implement
any of these regulations, it would be necessary for the
Department to seek either a supplemental appropriation for
1979 or include a request for such funds in our 1980 submission. In either event we cannot implement these proposals
without receiving from Congress the funds to do so. I make
these same assurances to you and to the committee.
I would hope that in the coming weeks you and other
members of the House Appropriations Committee would decide
to restore the $4.2 million. Otherwise, there will have to
be a serious curtailment of ATF's activities, both regulatory
and enforcement.
If there are any questions, please feel free to
contact me.
Sincerely,
Robert Carswell
The Honorable
Tom Steed, Chairman
Subcommittee on Treasury,
Postal Service, and General
Government
Committee on Appropriations
House of Representatives
Washington D.C. 20515
FOR IMMEDIATE RELEASE
June 9, 1978
Contact:
Alvin M. Hattal
202/566-8381
TREASURY DEPARTMENT EXTENDS PERIOD OF
INVESTIGATION OF STEEL WIRE ROPE FROM KOREA
The Treasury Department today said it will extend
its antidumping investigation of steel wire rope from
the Republic of Korea for an additional period not to
exceed 60 days. Treasury said it needed more time to
analyze and verify the data provided to determine whether
the product is being sold in the United States at less
than fair value.
As defined by the Antidumping Act, "sales at less
than fair value" generally occur when imported merchandise is sold here for less than in the home market or to
third countries. If Treasury determines "sales at less
than fair value" occur, the case is referred to the U. S.
International Trade Commission to determine whether they
are hurting a U. S- industry. An affirmative ITC decision
would require dumping duties.
Notice of this action appeared in the Federal Register
of June 8, 1978.
Imports of steel wire rope from the Republic of Korea
were valued at approximately $13 million during calendar
year 1976.
o
B-966
0
o
FOR IMMEDIATE RELEASE
June 9, 1978
Contact:
Alvin M. Hattal
202/566-8381
TREASURY SAYS PRELIMINARY INVESTIGATION
INDICATES CANADA IS SUBSIDIZING
OPTIC-LIQUID LEVEL-SENSING SYSTEMS
The Treasury Department today announced its
preliminary determination that the Government of Canada is
subsidizing exports to the United States of optic-liquid
level-sensing systems manufactured by Honeywell Ltd. This
product is designed to prevent the overfilling of oil storage tanks and oil delivery trucks.
The action results from a petition filed by Scully
Electronics System, Inc., in November 1977. Under the law,
Treasury must make a final decision by November 14, 197 8.
The Countervailing Duty Law requires the Treasury to
assess an additional Customs duty equal to the amount of a
"bounty or grant" (subsidy) paid on imported merchandise.
Treasury's preliminary investigation revealed that payments were made by the Canadian Government to partially
defray costs incurred by Honeywell Ltd. in the commercial
introduction of this product and that at this stage these
payments appear to be subject to countervailing duties.
Notice of this action will appear in the Federal Register
of June 12, 1978.
No public statistics regarding the value of imports of
optic-liquid level-sensing systems manufactured by Honeywell
Ltd. are available.
o
B-967
0
o
FOR IMMEDIATE RELEASE
June 9, 1978
Contact:
James Parker
202/376-0872
ONE-CENT MELTING BAN REVOKED
The Treasury Department announced today that the
regulations prohibiting the exportation, melting or
treating of one-cent pieces have been revoked.
The ban on the exportation, melting or treating of
one-cent coins was imposed by the Secretary of the
Treasury in April 1974. The restrictions were placed
into effect primarily because high copper prices at the
time made it potentially profitable to melt one-cent
coins for their metal content or to export them. Violations of the regulations carried a statutory penalty
of up to $10,000 and/or 5 years imprisonment.
Because of changed economic conditions, including
stabilized copper prices and the large inventory of
one-cent coins maintained by the Government, the
Department has determined that the prohibitions are no
longer necessary. The revocation became effective on
June 7, 1978.
o
B-968
0
o
FOR IMMEDIATE RELEASE
June 9, 1978
Press Contact:
Robert E. Nipp
202/566-5328
Non-Press Contact:
202/566-8235
566-8651
566-5286
STEEL TRIGGER PRICE HEARING ON GREAT LAKES DIVERSION CLAIMS
The Treasury Department today announced the schedule for the
hearing Monday, June 12 on steel mill imports in the Great
Lakes region. The hearing will consider allegations that a
secondary effect of the trigger price mechanism has been to
divert steel imports from Great Lakes to East, West, and Gulf
coast ports. Testimony will also be heard on a Treasury proposal
to adjust the Gre?t Lakes freight rates used to calculate trigger
prices for steel pl~ce and cold and hot rolled sheets. In addition, other proposals will be considered to correct the claimed
diversionary effect.
The hearing begins at 9:30 a.m. in Room 4121, Main Treasury
Building. General Counsel Robert Mundheim and Deputy Assistant
Secretary for Tariff Affairs Peter Ehrenhaft will preside. The
hearing is open to the public.
The tentative schedule of testimony is:
9:30 Welcome and Introduction
Mr. Mundheim and Mr. Ehrenhaft
9:45 First Panel: (Each panelist to make 10 minute
presentation and be available for questioning by
hearing officers.)
1. Robert J. Lewis, Assistant Admix. dtor
for Development, St. Lawrence Seavay
Development Corp.
2. Robert D. McBride, President, National
Steel Corp.
B-969
-23.
Leonard S. Baness, President,
Wire Sales Co.
4. Raymond N. Carlen, Vice Chairman,
Inland Steel
5. A. R. Hudson, Great Lakes Task Force
11:00 Second Panel
1. R. G. Criss and J. D. Heckerman,
Republic Steel
2. Larry Williams, Director of Kurt Orban Co.,
American Institute for Imported Steel
3. W. V. Murphy, Vice President, McLouth
Steel Corp.
4. Jim Fish, Great Lakes Commission
5. Thomas A. Cleary, Executive Vice President,
Youngstown Sheet and Tube
6. Mike Moran, Director, Chicago Maritime
Council
Other testimony will be scheduled as time permits.
Transcript of the hearing may be ordered from the MillerColumbian Reporting Service at (202)347-0224. All written
submissions will be kept in a public reading file in the
Treasury Department Library, Room 5030.
The period for written comments has been extended to
Monday, June 19.
oOo
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WASHINGTON, D.C. 20220
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<D O
FOR IMMEDIATE RELEASE
June 9, 1978
SUMMARY OF FEDERAL FINANCING BANK ACTIVITY
May 1-May 31, 1978
Federal Financing Bank activity for the month of May,
1978, was announced as follows by Roland H. Cook, Secretary:
On May 1, the Federal Financing Bank (FFB) purchased
Note #15 from the National Railroad Passenger Corporation
(Amtrak) in the amount of $100 million. The note matures on
October 1, 1978, and is guaranteed by the Department of
Transportation (DOT). Amtrak made drawdowns against the
note in the following amounts:
Interest
Date
Amount
Rate
$69,684,000
7.145%
5/1
5,000,000
7.195%
5/4
3,000,000
7.275%
5/9
2,500,000
7.285%
5/12
7.275%
5,000,000
5/15
7.245%
4,500,000
5/17
7.255%
2,000,000
5/26
On May 1, the FFB advanced $121,196 to the Trustee of
Chicago, Rock Island and Pacific Railroad at a rate of 8.475%.
The Trusteefs certificate under which the advance was made
is guaranteed by DOT and will mature on June 21, 1991.
On May 1, the FFB advanced $1,900,216 to the Chicago
and North Western Transportation Company at a rate of 8.523%
on an annual basis. The note under which the advance was
made matures on March 1, 1989 and is guaranteed by DOT.
The U.S. Railway Association made the following drawdowns
under notes guaranteed by DOT:
Interest
Maturity
Note
Amount
Date
NFn-i-o #
#
AmrmntMaturity
Rate
5/5
5/9
5/31
B-970
8
13
8
$3,142,000
250,000
326,500
4/30/79
12/26/90
4/30/79
7.803%
8.125%
7.648%
- 2On May 3, the FFB completed its original commitment to
DOT to lend up to $12 million to the Missouri-Kansas-Texas
Railroad (MKT) by advancing $45,515 to that railroad at an
interest rate of 8.418%. On May 26, DOT and FFB agreed to
increase the amount of the MKT loan by $4.5 million. The
initial $12 million is payable in quarterly installments
to 1997, and the additional $4.5 million will be repaid in
1997. This new loan is guaranteed by DOT pursuant to Section
511 of the Railroad Revitalization and Regulatory Reform Act
of 1976.
The FFB purchased the following notes from the Student
Loan Marketing Association. The notes are guaranteed by
the Department of Health, Education and Welfare.
Interest
Date
Note
Amount
Maturity
Rate
$60,000,000
142 #
8/1/78
5/2
6.784%
8/8/78
6.788%
5/9
143
60,000,000
5/16
144
70,000,000
8/15/78
6.635%
5/23
145
60,000,000
8/22/78
6.800%
5/31
146
40,000,000
8/29/78
6.991%
The above borrowings represent $210 million in rollovers of
maturing SLMA notes and $80 million in new cash.
On May 15, SLMA and FFB completed arrangements, subject
to the guarantee of HEW, for SLMA to borrow up to $1 billion
outstanding under a variable rate master note maturing on
March 15, 1993. The interest rate on the note will vary each
week based on the average of the most recent 91-day Treasury
bill auction.
The FFB advanced the following amounts to the Western
Union Space Communications against a $687 million master note
maturing on October 1, 1989. The repayment of the note is
secured by the National Aeronautics and Space Administration's
obligations to Western Union under a tracking and procurement
contract.
Interest
Date
Amount
Rate
5/1 $23,350,000 8.526%
5/22
1,135,000
8.666%
Interest payments on the above advances are made on an
annual basis.
The FFB pruchased participation certificates from the
General Services Administration in the following amounts:
Interest
Date
Series
Amount
Maturity
Rate _
5/1
5/9
5/10
5/15
5/31
K
M
L
L
K
$2,745,559.47
6,484,716.10
189,688.00
3,239,360.11
1,836,266.19
7/15/04
7/31/03
11/15/04
11/15/04
7/15/04
8.556
8.617<
8.610*
8.596<
8.682<
- 3The Federal Financing Bank advanced the following amounts
to rural utility companies under notes guaranteed by the Rural
Electrification Administration:
Interest
Date Borrower
Amount
Maturity
Rate
9,200,000
457,000
4,266,000
500,000
12/31/12
12/31/12
12/31/12
5/1/80
8.464%
8.464%
8.464%
8.005%
25,192,000
6/30/80
8.025%
Wolverine Elect. Coop.
601,000
5/14/80
8.005%
5/8
Gulf Telephone Co.
164,000
12/31/12
8.527%
5/9
5/9
5/9
North Florida Telephone Co.
Basin Elect. Pwr. Coop.
Wabash Valley Power Assn.
2,315,000
71,452,000
1,798,000
12/31/12
5/9/80
12/31/12
8.528%
8.074%
8.528%
5/10
Allegheny Elect. Coop.
1,662,000
12/31/12
8.527%
5/12
5/12
Arizona Elect. Pwr. Coop.
Colorado-Ute Elect. Assn.
1,451,000
6,457,000
12/31/12
12/31/12
8.505%
8.505%
5/15
5/15
Arizona Elect. Pwr. Coop.
Western Farmers Elect. Coop.
3,380,000
1,500,000
12/31/12
5/15/80
8.523%
8.093%
5/19
5/19
Tri-State Gen. § Trans. Assn.
Big River Elect. Corp.
200,000
4,232,000
6/30/80
12/31/12
8.132%
8.526%
5/23
South Mississippi Elect.
1,152,000
5/26/80
8.162%
5/25
East Kentucky Power Coop.
5,897,000
12/31/12
8.541%
5/26
Southern Illinois Power Coop.
1,400,000
5/26/80
8.191%
5/31
5/31
5/31
5/31
Arkansas Elect. Coop.
Tri-State Gen. § Trans. Assn.
Basin Elect. Power Coop.
Central Iowa Power Coop.
5,026,000
9,075,000
17,106,000
776,000
12/31/12
7/31/80
5/31/80
12/31/12
8.581%
8.201%
8.191%
8.581%
5/1
5/1
5/1
5/1
United Power Assn.
Allied Tele. Co. of Arkansas
Oglethorpe Elect. Membership
Eastern Iowa Light § Power
5/4
Tri-State Gen. § Trans. Assn.
5/5
Interest payments on the ab ove advances are made on a
quarterly basis.
The FFB purchased the following Certificates of Beneficial
Ownership (CBO's) from the Farmers Home Administration:
Interest
Date
Amount
Maturity
Rate
5/9 $795,000,000 5/9/83 8.52%
5/26
175,000,000
5/26/83
8.61%
Interest on th.p ntiove CB0Ts is paid on an annual basis.
- 4 -
The Tennessee Valley Authority sold notes to the FFB
in the following amounts:
Interest
Date
Note #
Amount
Maturity
Rate
5/15
5/31
75
76
$ 45,000,000
460,000,000
8/31/78
8/31/78
6.9621
6.994%
On May 24, the FFB purchased debentures from small business
investment companies in the aggregate amount of $8,050,000,
bearing interest at a rate of 8.5451 and a maturity of May 1,
1988.
The FFB made the following advances under loans guaranteed
by the Department of Defense:
Date of
Promissory
Date of
Interest
Borrower
Amount
Maturity
Note
Advance
Rate
Argentina
6/30/76
6/30/76
5/16
5/22
China
6/30/77
Columbia
1,741.93
9,705,982.16
6/30/83
6/30/83
8.2351
8.296%
5/11
582,000.00
7/1/85
8.3001
6/10/76
5/11
575,867.19
6/30/83
8.2271
Costa Rica
9/30/77
5/2
492,110.00
4/10/83
8.1631
Ecuador
7/28/76
9/15/77
5/2
5/5
943,385.00
498,755.00
6/30/83
8/25/84
8.1631
8.1831
Greece
5/23/78
5/31
5,272,549.55
5/3/88
8.4901
Honduras
Israel
9/30/77
9/30/77
9/30/77
7/1/76
9/30/77
2/15/78
5/11
5/22
5/3
5/16
5/31
5/23
80,567.00
7,750.00
100,322.00
645,398.33
1,603,782.02
25,170,417.92
10/7/82
10/7/82
9/20/86
6/30/83
9/20/86
1/12/08
8.194%
8.237%
8.280%
8.235%
8.452%
8.624%
Jordan
5/26/76
5/25
98,652.47
11/26/85
8.402%
Malaysia
9/30/77
9/30/77
5/19
5/31
260,099.00
3,367,000.00
3/20/84
3/20/84
8.296%
8.362%
Morocco
9/28/77
5/5
222,535.23
9/10/85
8.210%
Thailand
9/29/76
5/5
13,354.67
6/30/83
8.14%
Tunisia
9/29/76
9/29/77
5/11
5/11
3,355.69
1,239.63
10/1/84
10/1/85
8.277%
8.254%
Indonesia
$
Federal Financing Bank holdings on May 31, 1978 totalled
$43.9 billion.
# 0 #
¥rimentoftheTREA$URY
IfflpWo!)
TELEPHONE 566-2041
GT0N.D.C.2022Q
I
FOR IMMEDIATE RELEASE
June 12, 1978
RESULTS OF TREASURY'S WEEKLY BILL AUCTIONS
Tenders for $2,304 million of 13-week Treasury bills and for $3,407 million
of 26-week Treasury bills, both series to be issued on June 15, 1978,
were accepted at the Federal Reserve Banks and Treasury today. The details are
as follows:
RANGE OF ACCEPTED
COMPETITIVE BIDS:
13-week bills
matur:Lng September 14, 1978
P rice
High
Low
Average
Discount
Rate
98 .330
98 .326
98 .327
6.607%
6.622%
6.618%
4
26-week bills
:. maturine December 14, 1978
Investment
Rate 1/
6.81%
6.83%
6.82%
Discount
Rate
Pr: Lee
. 96.403
: 96.399
: 96.400
7.115%
7.123%
7.121%
Investment
Rate 1/
7.48%
7.49%
7.49%
Tenders at the low price for the 13-week bills were allotted 19%.
Tenders at the low price for the 26-week bills were allotted
TOTAL TENDERS RECEIVED AND ACCEPTED
BY FEDERAL RESERVE DISTRICTS AND TREASURY:
Location
Received
Boston
$
29,040,000
New York
3,849,420,000
Philadelphia
18,705,000
Cleveland
53,345,000
Richmond
25,600,000
Atlanta
27,805,000
Chicago
368,645,000
St. Louis
48,765,000
30,505,000
Minneapolis
Kansas City
33,630,000
Dallas
12,770,000
San Francisco
226,410,000
Treasury
TOTALS
7,965,000
$4,732,605,000
Accepted
$
; Received
9,155,000
18,960,000 : $
2,022,650,000 • 5,076,590,000
7,390,000
18,690,000
55,955,000
28,435,000 ,
23,670,000
17,490,000
20,125,000
27,685,000
599,770,000
44,545,000
45,400,000
21,765,000
26,895,000
11,645,000
17,055,000
31,305,000
10,395,000
12,770,000 :
616,440,000
40,110,000
7,965,000
$2,304,015,000a/
5,760,000
$6,514,600,000
-Includes $348,520,000 noncompetitive tenders from the public.
-• ncludes $199,670,000 noncompetitive tenders from the public.
-Equivalent coupon-issue yield.
B-971
Accented
$
9,155,000
2,743,390,000
7,390,000
15,960,000
9,670,000
19,565,000
123,070,000
11,400,000
14,695,000
16,685,000
9,895,000
420,115,000
5,760,000
J
$3,406,750,000b!
Contact:
Alvin Hattal
566-8381
June 12, 1978
FOR IMMEDIATE RELEASE
TREASURY DEPARTMENT ANNOUNCES START OF
ANTIDUMPING INVESTIGATION OF METHYL ALCOHOL
FROM CANADA
The Treasury Department said today that it will
begin an antidumping investigation of methyl alcohol
(methanol) from Canada.
Treasury's announcement followed a summary
investigation conducted by the U.S. Customs Service
after receipt of a petition filed by the E.I. du Pont
de Nemours & Company, alleging that this product is
being dumped in the United States.
The petition alleges that methyl alcohol is being
exported from Canada at prices below those in the home
market and cites Alberta Gas Chemicals, Ltd., Medicine
Hat, Alberta, as the principal Canadian supplier.
This case is simultaneously being referred to the
U.S. International Trade Commission (ITC). Should
the ITC find (within 30 days) that there is no
reasonable indication of injury or likelihood of
injury to a domestic industry, the investigation will
be terminated. Otherwise, the Treasury will continue
B-972
-2its investigation into the question of sales at less
than fair value (Dumping occurs when there are both
sales at less than fair value and injury to a U.S. industry).
Notice of this action will be published in the
Federal Register of June 14, 1978.
Imports of methyl alcohol from Canada were valued
at approximately $14 million during calendar year 1977.
*
*
*
p imntoftheTREASURY
|HINGT0N,D.C.2O22O
TELEPHONE 566-20*1
FOR IMMEDIATE RELEASE
June 13, 1978
Contact:
George G. Ross
202/566-2356
TREASURY ANNOUNCES PUBLIC MEETING TO DISCUSS
USA-ITALY TAX TREATY ISSUES, ON JULY 21, 1978
The Treasury Department today announced that it will
hold a public meeting on July 21, 1978, to solicit the views
of interested persons regarding issues being considered
during negotiations to develop a new income tax treaty between the United States and Italy.
The public meeting will be held at the Treasury
Department, at 2:00 p.m., in room 4121. Persons interested
in attending are requested to give notice in writing, by July
17, 1978, of their intention to attend. Notices should be
addressed to H. David Rosenbloom, International Tax Counsel,
Department of the Treasury, Washington, D. C. 20220.
Today's announcement of the July public meeting follows
the recent conclusion of a further round of negotiations between representatives of the United States and Italy to develop
a new income tax treaty for the avoidance of double taxation
and the prevention of tax evasion. The income tax treaty
presently in effect dates from 1955.
In the course of the recent negotiations, many subjects
of mutual concern were identified and discussed. Among the
major issues being considered are: taxation of charitable and
educational organizations; taxation of social security payments; taxation of corporations organized in one country but
managed or controlled in the other country; taxation of partnerships; taxation of dividends, interest, and royalties;
taxation of rentals of tangible personal property; the rules
relating to permanent establishments; the taxes to be covered;
and the taxation of directors' fees.
The Treasury seeks the views of interested persons in regard to these issues, as well as other matters that may have
relevance in the context of an income tax treaty between the
United States and Italy. The July 21 public meeting is being
held to provide an opportunity for an exchange of views, as
well as for the purpose of discussing the United States position in regard to the issues presented in the negotiations.
o
0
o
B-973
FOR RELEASE AT 4:00 P.M.
June 13, 1978
TREASURY'S WEEKLY BILL OFFERING
The Department of the Treasury, by this public notice,
invites tenders for two series of Treasury bills totaling
approximately $5,600 million, to be issued June 22, 1978.
This offering will result in a pay-down for the Treasury of about
$6,010 million as the maturing bills are outstanding in the
amount of $11,610 million ($6,005 million of which represents
20-day bills issued June 2, 1978). The two series offered are as
follows:
91-day bills (to maturity date) for approximately $2,200
million, representing an additional amount of bills dated
March 23, 1978, and to mature September 21, 1978 (CUSIP No.
912793 T4 8 ) , originally issued in the amount of $3,402 million,
the additional and original bills to be freely interchangeable.
182-day bills for approximately $3,400 million to be dated
June 22, 1978, and to mature December 21, 1978 (CUSIP No.
912793 U9 5).
Both series of bills will be issued for cash and in exchange
for Treasury bills maturing June 22, 1978.
Federal Reserve
Banks, for themselves and as agents of foreign and international
monetary authorities, presently hold $3,597 million of the
maturing bills. These accounts may exchange bills they hold for
the bills now being offered at the weighted average prices of
accepted competitive tenders.
The bills will be issued on a discount basis under competitive
and noncompetitive bidding, and at maturity their par amount will
be payable without interest. Except for definitive bills in the
$100,000 denomination, which will be available only to investors
who are able to show that they are required by law or regulation
to hold securities in physical form, both series of bills will be
issued entirely in book-entry form in a minimum amount of $10,000
and in any higher $5,000 multiple, on the records either of the
Federal Reserve Banks and Branches, or of the Department of the
Treasury.
Tenders will be received at Federal Reserve Banks and
Branches and at the Bureau of the Public Debt, Washington,
D
« C 20226, up to 1:30 p.m., Eastern Daylight Saving time,
Monday, June 19, 1978. Form PD 4632-2 (for 26-week series) or
Form PD 4632-3 (for 13-week series) should be used to submit
tenders for bills to be maintained on the book-entry records of
the Department of the Treasury.
B-974
-2Each tender must be for a minimum of $10,000. Tenders
over $10,000 must be in multiples of $5,000. In the case of
competitive tenders the price offered must be expressed on
the basis of 100, with not more than three decimals, e.g.,
99.925. Fractions may not be used.
Banking institutions and dealers who make primary
markets in Government securities and report daily to the
Federal Reserve Bank of New York their positions in and
borrowings on such securities may submit tenders for account
of customers, if the names of the customers and the amount
for each customer are furnished. Others are only permitted
to submit tenders for their own account.
Payment for the full par amount of the bills applied for
must accompany all tenders submitted for bills to be maintained
on the book-entry records of the Department of the Treasury. A
cash adjustment will be made on all accepted tenders for the
difference between the par payment submitted and the actual
issue price as determined in the auction.
No deposit need accompany tenders from incorporated banks
and trust companies and from responsible and recognized dealers
in investment securities for bills to be maintained on the
book-entry records of Federal Reserve Banks and Branches, or for
bills issued in bearer form, where authorized. A deposit of 2
percent of the par amount of the bills applied for must
accompany tenders for such bills from others, unless an express
guaranty of payment by an incorporated bank or trust company
accompanies the tenders.
Public announcement will be made by the Department of the
Treasury of the amount and price range of accepted bids.
Competitive bidders will be advised of the acceptance or
rejection of their tenders. The Secretary of the Treasury
expressly reserves the right to accept or reject any or all
tenders, in whole or in part, and the Secretary's action
shall be final. Subject to these reservations, noncompetitive
tenders for each issue for $500,000 or less without stated price
from any one bidder will be accepted in full at the weighted
average price (in three decimals) of accepted competitive bids
for the respective issues.
Settlement for accepted tenders for bills to be maintained on the book-entry records of Federal Reserve Banks
and Branches, and bills issued in bearer form must be made
or completed at the Federal Reserve Bank or Branch or at the
Bureau of the Public Debt on June 22, 1978,
in cash or
other immediately available funds or in Treasury bills maturing
differences
accepted
June 22, in
1978.
exchange
between the
Cash
andpar
the
adjustments
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issueof
price
the
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maturing
ofbe
the
made
new
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for
bills.
-3Under Sections 454(b) and 1221(5) of the Internal Revenue
Code of 1954 the amount of discount at which these bills are
sold is considered to accrue when the bills are sold, redeemed
or otherwise disposed of, and the bills are excluded from
consideration as capital assets. Accordingly, the owner of these
bills (other than life insurance companies) must include in his
or her Federal income tax return, as ordinary gain or loss, the
difference between the price paid for the bills, whether on
original issue or on subsequent purchase, and the amount actually
received either upon sale or redemption at maturity during the
taxable year for which the return is made.
Department of the Treasury Circulars, No. 418 (current
revision), Public Debt Series - Nos. 26-76 and 27-76, and this
notice, prescribe the terms of these Treasury bills and govern
the conditions of their issue. Copies of the circulars and
tender forms may be obtained from any Federal Reserve Bank or
Branch, or from the Bureau of the Public Debt.
^m
ptmentoftheTREASURY
H5HINGT0N, D.C. 20220
TELEPHONE 566-2041
FOR IMMEDIATE RELEASE
June 13, 1978
Contact:
Mr. Robert Nipp
202/566-5328
TREASURY WAIVES DUTIES ON FISH SUBSIDIES
BEING PAID BY THE CANADIAN GOVERNMENT
The Treasury Department today announced a final determination
that the Canadian Government has been subsidizing exports of fish
to the United States, but waived the imposition of countervailing
duties because of Canadian action to "substantially reduce" and by
October 1 "almost entirely eliminate" the subsidies.
The waiver applies to dutiable fish which would have been
subject immediately to countervailing duties. Duties would be
imposed on duty-free fish only if the U.S. International Trade
Ccranission, to which the matter has been referred, finds injury
or the threat of injury to a domestic industry. Hcwever, if that
finding were made, the waiver would be extended to duty-free fish
as well.
The Treasury Department found subsidies by the Government of
Canada and provincial governments consisting of cash payments to
Canadian fishermen and fish processors on their fish catches,
cash payments to fishermen for financing the construction of fishing
vessels, grants for various facilities required in the fishing
industry and loans for vessel construction and processing facilities.
The amount of the subsidy on dutiable fish was estimated at 5 percent
of the fob price for export to the United States.
However, the Treasury Department also found that the Canadian
government had reduced its subsidies by 68 percent as of March 31, 1978
and would achieve a 92 percent reduction by October 1, 1978. In
addition, the Treasury Department found that imposition of duties
would seriously jeopardize the achievement of trade agreements that
would reduce or eliminate trade barriers and distortions.
The Countervailing Duty Act requires the imposition of a duty
equal to any bounty or grant (subsidy) paid on exports to the
United States. The Statue also authorizes the Secretary of the
Treasury to waive the duty if he determines that adequate steps
B - 975
- 2 -
have been taken to reduce substantially or eliminate the adverse
effect of the subsidy and that imposition of the duty would jeopardize
reasonable prospects for successful trade agreements to reduce or
eliininate barriers and distortions to international trade.
The waiver will expire as of January 4, 1979.
Notice of the final determination and waiver will appear in
the Federal Register of June 10, 1978.
The types of fish covered by the investigation include cod,
sole, haddock, and flounder. Canadian fish exports to the United
States were valued at $200 million in 1977.
0 o 0
For Release Upon Delivery
Expected at 10:00 a.m.
STATEMENT OF
DANIEL I. HALPERIN, TAX LEGISLATIVE COUNSEL
DEPARTMENT OF THE TREASURY, OFFICE OF TAX POLICY
BEFORE THE
SUBCOMMITTEE ON MISCELLANEOUS REVENUE MEASURES
OF THE COMMITTEE ON WAYS AND MEANS
June 14, 1978
Mr. Chairman and Members of the Subcommittee:
I am pleased to have the opportunity to present the
views of the Treasury Department on the eleven miscellaneous
bills under current consideration by the Subcommittee. The
Treasury Department position on each of these bills is
summarized in Exhibit A to this statement.
This Subcommittee performs an important function in the
tax legislative process. It provides a forum for the examination of legislative proposals important to one or more of
the diverse sectors of society affected by our tax laws;
proposals that might otherwise not receive adequate attention from the Congress. It also encourages continuous
review of the application of the tax laws and thereby promotes an atmosphere in which necessary corrective changes
may be identified and enacted expeditiously. A recent
example of this aspect of the Subcommittee's work is provided by H.R. 12578, which contains noncontroversial technical
recommendations of the Treasury, the American Bar Association
and the American Institute of Certified Public Accountants.
The Treasury believes that the following bills under
current consideration fit into a similar category:
H.R. 6897 (deficiency dividend procedure for certain
regulated investment companies): The Treasury Department
supports the bill and supports extension of the deficiency
dividend procedure to all regulated investment companies.
B-97S
- 2 However, the deficiency dividend procedure should be conformed to that provided for real estate investment trusts by
the Tax Reform Act of 1976 (see §§1601 (b)- (f) of P.L. 94455).
H.R. 9192 (tax treatment of banks for cooperatives):
The Treasury Department does not oppose the portion of the
bill which grants to banks for cooperatives ordinary income
treatment for gains and losses arising from the sale or
exchange of bonds or other evidence of indebtedness.
H.R. 10653 (tax treatment of transfer railroads under
the Conrail reorganization): The Treasury Department does
not oppose this bill which would permit extended net operating losses to be used against income realized by one member
of an affiliated group from "certificates of value" issued
as a result of the Conrail reorganization to another member
of the group.
H.R. 12200 (election to treat qualified stock options
as nonqualified stock options): The Treasury Department
does not oppose this bill which would permit taxpayers
owning qualified stock options to elect to treat the options
as nonqualified. However, in order to prevent windfall
benefits to employers, we recommend the bill specifically
provide that the employer's deduction, if any, is to be
determined under the rules applicable to qualified stock
options (section 421(b)).
H.R. 12606 (tax deferred annuities for employees of
Uniformed Services of the Health Sciences): Although the
Treasury Department does not believe that section 403(b)
represents sound tax policy, in the context of present law
it does not oppose this bill which would extend section
403(b) treatment to civilian employees of the Uniformed
Services University of the Health Sciences.
In each of the foregoing cases, the process of technical and substantive review revealed a deficiency which
ought to be corrected.
Treasury believes it important
that the Subcommittee address these types of issues. On
the other hand, we continue to urge extreme caution in the
use of the Subcommittee as a vehicle through which special
exceptions to generally applicable rules are created for
particular taxpayers. Legislative provisions of general
applicability often require specific taxpayers to modify
their activities in order to comply with the law. When this
occurs, the affected taxpayers may seek legislative relief,
- 3 on the ground either that such relief is equitable or that
the activity in question does not present an abuse situation. Either claim must be carefully examined and reasonable people may reach opposite conclusions on the merits.
However, we must all recognize that ad hoc solutions inevitably increase the complexity of the Code, invite other taxpayers to seek similar relief and, unless scrupulously
drafted, may create new potentials for abuse. We do not
believe that taxpayers should be encouraged to view the
legislative process as a forum of first, rather than last,
resort.
H.R. 12592 is an example of this issue. That bill
would exempt the Hormel Foundation of Minnesota from the
self-dealing rules regarding certain trustee services
furnished to private foundations.
The Hormel Foundation serves as trustee of 21 irrevocable trusts in which it has remainder interests. Some or
all of the trusts are "disqualified persons" with respect to
the foundation. All of the trusts were irrevocable by 1954,
and the trust instruments designate the foundation as
trustee. To date, the foundation has not charged a trustee's
fee against the trusts, although the trusts have reimbursed
the foundation for expenses incurred in their administration.
Pursuant to the Tax Reform Act of 1969, the furnishing
of services by a foundation to a disqualified person is
considered an act of self-dealing unless the services are
functionally related to the foundation's exempt purposes and
are furnished on a basis no more favorable than that on
which such services are made available to the general
public. State law prevents the Hormel Foundation from
rendering trustee services to the general public. Moreover,
even if the Foundation were capable of rendering such
services, they would not be considered functionally related
to the Foundation's exempt purposes. Consequently, the
Internal Revenue Service issued a private ruling in July
1977 holding that the furnishing of trustee services by the
Foundation is an act of self-dealing.
The Hormel Foundation is presently in a situation that
it could not have anticipated when it began acting as
trustee. However, it is also true that the effective date
of the provisions to which it will become subject were
intentionally deferred for 10 years from the date of enactment for the specific purpose of enabling an orderly
- 4 transition. The obvious nonlegislative solution to the '
problem is a petition for the appointment of a new trustee,
a proceeding that is routine in most jurisdictions.
We do not believe this Subcommittee should consider
legislative relief until this course has been pursued. In
the absence of a demonstration that judicial relief is
unavailable, there is little merit to the legislation. The
rendering of trustee services by the Hormel Foundation is
not functionally related to the Foundation's exempt purpose
and there is nothing unique about trustee services which
requires that they be performed by the Foundation. As a
result, we recommend that the Subcommittee defer consideration of H.R. 12592 until the Foundation has pursued its
judicial remedies.
A number of the bills presently before the Committee
seek to extend a limited benefit (or special exception) to
other taxpayers who are, or claim to be, in situations
similar to the beneficiaries of present law. In many cases,
only limited relief was provided initially because Congress
was concerned that the policy underlying the exception might
not be correct. An attempt to extend limited benefits or
exceptions provides the Subcommittee with an opportunity to
review the fundamental Congressional decision. The Subcommittee may decide that the underlying policy does not
justify the special relief or if it does that the present
case is sufficiently different so as not to warrant extension.
In other cases, the Subcommittee may decide that the policy
is valid but that the present rules require adjustment for
it to be fully realized. The Treasury believes that the
bills under consideration today illustrate all three situations.
For example, H.R. 6989 would extend to two additional
entities, the Maryland Savings-Share Insurance-Corpor«ation
and the North Carolina Savings Guaranty Corporation, the
exemption from income taxation currently granted to certain
state-chartered mutual deposit guaranty organizations
organized before September 1, 1957. Rather than further
extend the present exemption, Treasury recommends its
repeal.
As originally enacted, section 501(c)(14)(B) granted
tax exemption to certain mutual deposit guaranty organizations
because they provided services to tax-exempt financial
institutions. The financial institutions served by these
organizations became taxable in 1951. However, the tax
exemption for mutual deposit guaranty organizations continued and, indeed, was once extended to cover a similar
organization founded in Ohio.
- 5 The rationale for granting tax exemption to these
institutions,disappeared when the institutions they served
became taxable. Moreover, if the exemption were extended as
proposed in this bill, there is reason to believe that
additional organizations will be chartered and demand
identical tax treatment. The proliferation of state chartered
insurers, some of which may not exact the rigorous standards
of Federal account insurance, could be expected to have an
adverse impact upon the financial stability and credibility
of the Federal Deposit Insurance Corporation and the Federal
Savings and Loan Insurance Corporation. In this context it
is clear that granting tax exemption to various statechartered insurance plans for financial institutions may not
serve the public interest. The most even-handed way to deal
with the problem is to repeal the present exemption.
H.R. 11741, which would make contributions in aid of
construction to regulated electric energy or gas public
utilities eligible for treatment as nontaxable contributions
to capital under section 118(b), raises a similar issue.
While framed in the context of extension of the present law
treatment accorded water or sewerage disposal facilities,
the bill invites examination of the rationale for present
law.
Section 118(b), added by the Tax Reform Act of 1976,
provides that amounts received after January 31, 1976 as
contributions in aid of construction by a water or sewerage
disposal utility which are used for qualified expenditures
and which are not included in the rate base for ratemaking
purposes are treated as nontaxable contributions to capital
of the utility.
In testimony before the Senate Finance Committee on
July 20, 1976, the Administration opposed section 118(b) on
the ground that it "would establish a precedent for similar
designations of all manner of payments to telephone companies
and electric and gas utilities. . . ." Indeed, an amendment
to e t nd
. ? ?
section 118(b) treatment to electric and gas
utilities was offered on the Senate floor and defeated. The
relief was limited to water and sewerage utilities because
it was felt that they were more significantly affected than were
other utilities. Moreover, the revenue loss, measured from
a base which treated contributions as taxable income, was
manageable if confined to water and sewerage facilities but
could be as high as $200 million if gas and electric utilities
w
ere included.
- 6 The issue posed by H.R. 11741 is the appropriate tax
treatment of contributions in aid of construction in general.
The further question of what taxpayers other than water and
sewerage disposal utilities should receive section 118(b)
treatment must be dealt with as a separate issue only if it
is decided that section 118(b) is correct as a general
matter.
Treasury believes that section 118(b) is incorrect.
Contributions in aid of construction represent a present
payment for services. As such, they constitute gross income
to the recipient.
Nontaxable treatment of such contributions can be
justified on the theory that the contributor has made a loan
of the contributed amount to the utility which is to be
repaid through reduced charges for the services provided by
the utility.* The loan analogy, of course, is not precise
because the utility is not under a contractual obligation to
return the contributor's capital plus interest through
reduced charges over a finite time period.
However, even if the loan analogy were precise, it is
not a justification for the tax treatment sought. If the
contribution is viewed as a loan, the contributor's return,
the "interest" on the "loan", should be subject to income
tax; but it is not because it is realized in the form of a
rate reduction. It is as if the telephone company said to a
consumer, "Pay me $1,000 and I will extend my telephone
lines to your neighborhood. In addition, I will reduce your
rates by an amount sufficient to give you an adequate return
on your $1,000."
It is obvious that it is virtually impossible to measure
precisely the amount of income in this example. But it is
equally obvious that the consumer is receiving income which
under present law is not subject to tax. Unless this income
is subject to tax, the present treatment accorded contributions
in aid of construction under section 118(b), even if rationalized
It may also be argued that the utility has sold property to
the contributor. This analogy is not precise because title
remains with the utility. Moreover, if there is a sale,
there would be a profit element which should be taxed.
Section 118(b) by excluding the receipt, eliminates the
tax on the income. If section 118(b) were repealed as
we recommend and the sale analogy is accepted, consideration could be given to an allowance for the cost of the
Property "sold".
- 7 on the loan theory, results in an unjustified aggregate
revenue loss. Consequently, Treasury opposes the extension
of section 118(b) to gas and electric utilities and would
favor its repeal.
H.R. 7207 and H.R. 12828 are also amendments expanding
the scope of existing.tax exemptions. While we do not suggest that the existing exemptions be eliminated, we oppose
their expansion in these circumstances. I will first
discuss H.R. 7207.
Under current law, only two categories of organizations
that provide services to exempt organizations are exempt
from tax; common investment funds of educational organizations (Section 501(f)), and organizations that provide
hospital-related services to exempt hospitals, but only if
the organization is operated cooperatively and distributes
all net earnings for each taxable year to its patrons on the
basis of the services performed for each patron during the
taxable year (Section 501(e)).
H.R. 7207 would create a new class of exempt organizations, those organized to provide data processing services
or fiscal management services to participating social
service organizations that are exempt under Section 501(c) (3)
and affiliated with religious organizations exempt under
Section 501(c)(3). While an eligible entity must be controlled
by two or more of the organizations for which services are
performed, not all purchasers of services need be members.
Services are to be provided at "cost", defined to mean
amounts (1) determined on the basis of use of services by
each organization and (2) that do not "significantly exceed
the actual cost (including straight line depreciation)" of
services provided to each.
The Treasury Department opposes H.R. 7207. Unlike
hospital service organizations described in section 501(e)
or educational collective investment funds described in
section 501(f), the service organizations exempted by this
legislation need not be cooperative. Moreover, the organizations would be exempt from tax even though services were
provided to customers for charges in excess of actual cost.
Thus, H.R. 7207 would permit qualifying organizations to
derive a tax exempt profit from the provision of services.
- 8 The substantive equivalent of federal tax exemption
under section 501 can be achieved by the organizations
covered by H.R. 7207 if they were organized and operated
as member cooperatives under Subchapter T of the Code. The
only remaining advantage to being exempt under section 501
would be that, in some states, it might simplify obtaining a
state tax exemption. Securing a state tax exemption is not
an appropriate reason to grant an otherwise unnecessary
Federal income tax exemption and thereby complicate the
Code.
H.R. 12828 involves section 513(d) of the Code added
by the Tax Reform Act of 1976. That section, among
other things, exempts from the unrelated business income
tax the income derived by "qualifying" section 501(c) (5)
or section 501(c) (6) organizations from "convention and
trade show activity" carried out in conjunction with a
"qualified" convention. The Treasury's analysis of this
bill is set forth in Exhibit B.
To summarize, current law (section 513(d)) may not
represent ideal tax policy. However, the distinctions
it makes are at least arguably consistent with the purposes
for which business leagues and trade associations are granted
tax exemption, namely "to promote" the "common business
interest" of the association members, and "not to engage in
a regular business of a kind ordinarily carried on for
profit". Regulations section 1.501(c) (6)-1. This consistency is implemented by restricting the trade show
exemption to situations where one of the exempt purposes of
the organization, and one of the organization's purposes
in carrying on the show in question, is to stimulate
interest and demand for the products of the organization's
members.
Since this rationale does not exist in the case of
suppliers' shows carried on either by organizations described
in section 501(c) (5) or 501(c) (6) or by organizations
described in section 501(c)(3), the Treasury opposes
H.R. 12828.
The portion of H.R. 9192 which would extend to banks
for cooperatives the section 595 nonrecognition treatment
accorded certain thrift institutions upon foreclosure raises
an entirely different concern namely, whether the provision
whose extension is sought actually provides the desired
result.
- 9 A foreclosure results in immediate recognition of gain
or loss for most taxpayers, but section 595 permits the
specified thrift institutions to defer recognition of gain
or loss until the disposition of the property. Therefore,
under the law currently applicable to banks for cooperatives
and taxpayers generally, property acquired at foreclosure
must be valued at the time of foreclosure, whereas under
section 595 there need not be any valuation until the property
is sold. The banks for cooperatives have stated they need
deferred recognition of foreclosure gains and losses to
avoid the complexities of valuing items such as farm equipment
before they are sold and to make certain that their losses
on foreclosure will be ordinary rather than capital. These
are worthwhile objectives and we could support the bill if
this were clearly the result.
In fact, however, it is not clear that section 595
treatment would simplify the taxation of banks for cooperatives.
Section 595 and its regulations permit thrift institutions
to deduct currently the difference between the outstanding
debt amount and the fair market value of the acquired property
as a worthless debt. If the losses are deducted currently,
the property must be valued without a sale, resulting in the
complexity which banks for cooperatives state they want to
avoid.
The Treasury Department would not object to extending
the foreclosure treatment of section 595 to banks for
cooperatives if this anomalous treatment in the current Code
provision were remedied. That is, institutions (including
thrift institutions) would be eligible for section 595
treatment only if they had not previously claimed a bad debt
deduction with respect to the property acquired through
foreclosure. Furthermore, once foreclosure took place the
institutions would be prohibited from taking a bad debt loss
on the property until it was sold. In addition to simplifying
the operation of section 595, this amendment would eliminate
the opportunity available under current law to whipsaw the
Internal Revenue Service by claiming a current bad debt
deduction and deferring recognition of gain until sale.
I have attached as Exhibit C a memorandum stating the
Treasury position with respect to H.R. 12352.
I thank the members of the Subcommittee for your attention.
I would be pleased to answer
o 0 any
o questions you may have
concerning our recommendations and comments.
Exhibit A
Summary of Treasury Positions
H.R. 6877 (small business regulated investment companies) —
Supports with technical changes and supports extension
to all regulated investment companies.
H.R. 6989 (mutual deposit guaranty organizations) —
Opposed.
H.R. 7207 (exempt computer and fiscal management services) —
Opposed.
H.R. 9192 (banks for cooperatives) — Not opposed to ordinary
income treatment for sales of notes, etc.; opposed to
thrift institution foreclosure treatment unless section
595 is modified.
H.R. 10653 (net operating losses in Conrail reorganization)
Not opposed.
H.R. 11741 (contributions in aid of construction) —
—
Opposed.
H.R. 12200 (election to treat qualified stock options as
nonqualified) — Not opposed with modifications.
H.R. 12352 (source rules for railroad rolling stock)
Opposed at this time.
H.R. 12592 (exception from self-dealing rules) —
this time.
—
Opposed at
H.R. 12606 (extension of section 403(b) to employees of
Uniformed Services University of the Health Sciences)
Not opposed.
i,R» 12828 (unrelated business tax exemption for certain
trade shows) — Opposed.
—
Exhibit B
Treasury Position on H.R. 12828
The Tax Reform Act of 1976 added section 513(d), which
among other things exempts from the unrelated business
income tax the income derived by "qualifying" section
501(c)(5) or section 501(c)(6) organizations from "convention and trade show activity" carried out in conjunction
with a "qualified" convention.
A "qualifying" section 501(c)(5) or (6) organization is
one which "regularly conducts as one of its substantial
exempt purposes a show which stimulates interest in, and
demand for, products of a particular industry or segment of
such industry." A "qualified" convention and trade show
activity is an activity carried out in connection with a
"convention, annual meeting, or show . . . if one of the
purposes of such organization in sponsoring the activity is
the promotion and stimulation of interest in, and demand
for, the products and services of that industry in general."
However, the term "convention and trade show activity" is
defined somewhat more broadly, and arguably permits the
lease or exhibition space not only to association members
but also to suppliers of goods and services to the industry
(so-called "suppliers" exhibits) even if the suppliers
conduct sales activity.
Thus, if a section 501(c)(5) or (6) organization regularly
conducts a show designed to stimulate interest in and demand
for the industry's products, and if the convention or trade
show in question has as one of its purposes the promotion of
interest in and demand for industry products, then income
from the lease of display space to members of the organization, and to suppliers to the industry is exempt from the
unrelated business income tax even if taking orders or
making sales is permitted. However, tax exemption is
accorded income from the lease of suppliers' exhibits only
as an incident to a "qualifying" convention.
H.R. 12828 would expand current law in three particulars.
F
irst, it would add organizations described in section
?Q1 (c) (3) to the list of qualifying organizations. Second,
it would broaden the limitation on qualifying organizations
to include those that regularly conduct as a substantial
exempt purpose a "suppliers' show", that is, a show "which
educates persons engaged in the industry in the development
of new products and services or new rules and regulations
effecting the industry." Finally, it would add that same
language
toactivity.
the definition of a qualified convention and
trade
show
- 2 Thus, the bill would permit section 501(c) (3) organizations — which are not typically regarded as carrying on
shows or meetings to stimulate interest in and demand for
the products of their members — to derive tax-free income
from the lease of exhibition space to suppliers in connection with an annual meeting. It would also make the
trade show exemption available to section 501(c)(5) organizations that do not presently meet the definition of qualifying
organizations. Finally, the bill would permit trade associations to derive tax-free income from the lease of
exhibition space in connection with a trade show, even where
the show was not conducted to promote the common business
interests of the association members by stimulating interest
in and demand for their products.
Current law may not represent ideal tax policy. However,
the distinctions it makes are at least arguably consistent
with the purposes for which business leagues and trade
associations are granted tax exemption, namely "to promote"
the "common business interest" of the assocation members,
and "not to engage in a regular business of a kind ordinarily
carried on for profit". Regulations section 1.501(c) (6)-l.
This consistency is implemented by restricting the trade
show exemption to situations where one of the exempt purposes of the organization, and one of the organisation's
purposes in carrying on the show in question, is to stimulate interest and demand for the products of the organization's members.
This rationale does not exist in the case of suppliers'
shows carried on either by organizations described in section
501(c)(5) or 501(c)(6) or by organizations described in
section 501(c)(3). To take a typical example, the proposed
legislation would exempt income derived by a professional
organization of physicians, which, in connection with its
annual meeting, leased space to manufacturers of medical
equipment and pharmaceuticals where the exhibitors were
permitted to take orders and make sales.
It may be argued that the lease of space under such
circumstances promotes the exempt purposes of the professional organization by educating its members with respect to
medical equipment and pharmaceuticals currently available.
However, that is not the issue raised by this legislation.
The professional association, under current law, may lease
exhibition space to such manufacturers. This legislation
- 3 would go further and would specifically permit the lessees
of exhibition space to engage in active solicitation of
orders and sales. Such sales activity is not substantially
related to the exempt purpose of the physicians' association, but rather permits the organization to derive income
from operation of a convenient shopping forum for its
members. Such income properly should be taxed. Therefore,
Treasury opposes H.R. 12828.
Exhibit C
Treasury Position on H.R". 12352
^
•
i
f
Under present law, income and loss from the rental of
railroad rolling stock is treated as from United States
sources to the extent that the rolling stock is used within
the United States, and from sources outside the United
States to the extent that the rolling stock is used outside
the United States. Gain and loss from the sale of rolling
stock purchased in the United States and sold outside the
United States is generally from sources outside the United
States.
H.R. 12352 would change these source rules. It would
provide, specifically, that income or loss from the rental
of rolling stock, and gain or loss from the sale or other
disposition of rolling stock, would be treated entirely as
from sources within the United States, provided that the
rolling stock is leased to a United States person and is not
expected to be used outside the United States in excess of
90 days in any taxable year. The effect of this provision
is to increase the availability of foreign tax credits to
lessors of rolling stock. These are generally banks and
other lenders who, unlike many railroads, are in a profit
position and can use the investment tax credit associated
with ownership of rolling stock. Leases of rolling stock
typically generate tax losses to the lessor, at least in the
early years. If these losses are treated as having a foreign
source, the lessor's foreign source taxable income, and
hence its foreign tax credit, is reduced. H.R. 12352 will
prevent dilution of the lessor's foreign tax credit by
treating the losses from leases and sales of rolling stock
as having a United States source.
Although the use and sale of rolling stock in Mexico is
covered by H.R. 12352, it is our impression that the main
issue presented is essentially a bilateral one between the
United States and Canada. Since the issue basically involves only one foreign country, and since we have on
going tax treaty negotiations with that country and this
issue has been dealt with in the context of those negotiations, the Treasury prefers that this issue be resolved in
the context of the tax treaty.
The result achieved by H.R. 12352 is in the interests
°f both Canada and United States lessors. The result is in
the interests of United States lessors because it makes it
easier to route rolling stock to Canada. The result is in
Canada's interest because it ensures that Canadian
- 2 foreign taxes on other Canadian income are allowed in full
as a credit in the United States without dilution for losses
attributable to leases and sales of rolling stock. Since
the result achieved here is in Canada's interest, and since
our tax treaty negotiations with Canada are fairly advanced,
we are reluctant to give up any leverage that such an issue
may have in those negotiations. For this reason, Treasury
opposes the unilateral statutory resolution of the issue
proposed in H.R. 12352 at this time.-
FOR IMMEDIATE RELEASE
June 14, 1978
Contact: Alvin M. Hattal
202/566-8381
TREASURY DEPARTMENT FINDS SORBATES FROM
JAPAN SOLD HERE AT LESS THAN FAIR VALUE
The Treasury Department announced today that it has
determined that sorbates imported from Japan are being sold
in the United States at "less than fair value" as defined
by the Antidumping Act.
This affirmative determination affects only one of the
four Japanese manufacturers investigated, Nippon Synthetic
Chemical Industry Company. With respect to the other three
companies investigated, Chisso Corporation and Daicel Ltd.
are excluded from the determination on the basis of de
minimis, or insignificant margins> and Ueno Fine Chemical
Industries Ltd. is being given a discontinuance based upon
minimal margins and assurances that all future sales will
not be at less than fair value.
The case is being referred to the U. S. International
Trade Commission, which must decide, within 90 days, whether
a U. S. industry is being, or is likely to be, injured by
these sales. If the ITC's decision is affirmative, dumping
duties will be collected on those sales found to be at "less
than fair value."
Sales at less than fair value generally occur when the
prices of the merchandise sold for export to the United
States are less than the prices of the same merchandise sold
in the home market. Interested persons were offered the
opportunity to present oral and written views prior to this
determination.
Notice of this action will be published in the Federal
Register of June 16, 1978.
Imports of sorbates from Japan were valued at $12
million during Calendar Year 1977.
o
B-977
0
o
mtmentoftheJREASURY
££££&£ >«»«;?:« »
TELEPHONE 566-2041
WASHINGTON, O.C. 20220
RELEASE FOR THURSDAY PMs
JUNE 15,. 1978
REMARKS OF
THE HONORABLE W. MICHAEL BLUMENTHAL
SECRETARY OF THE TREASURY OF THE UNITED STATES
AT THE MINISTERIAL MEETING OF OECD
PARIS, FRANCE
JUNE 15, 1978
Mr. Chairman:
Ministers of Finance and Economics find themselves meeting
in one international forum or another every few weeks. Their
advisors gather even more frequently; their heads of state confer
with increasing frequency. We are intensively engaged in
international cooperation in all aspects of economic policy. In
this economically interdependent world it is essential that this
consultation process continue.
Our consultations brought us to an increasing awareness of
the complexity of today's economic problems. We are well
informed about developments and policies in each other's
economies which affect our own economic performance and the
effectiveness of our own international policies. We know we
share common problems:
— In nearly all our economies, unemployment is too high,
especially among our youth, with all that this means in
terms of wasted economic and human resources.
— Inflation is too high in nearly all our countries,
distorting savings and investment decisions and
exacerbating domestic social tensions.
— Most of our countries are"experiencing rates of private
investment so low as to have adverse implications for the
rate of increase in employment and output for the longer
run, as well as for the near-term prospect for
self-sustaining growth.
B-978
-2—
Despite strong resistance by all our governments,
protectionist pressures are unabated and continue to take
new forms as political pressures mount to save jobs in
sensitive industries or sectors. Our governments are
tempted to act in ways which reduce the opportunities for
foreign competition in domestic markets or give
inappropriate aid to domestic firms to maintain or expand
markets abroad. The financing of civil aircraft exports
is an example of the type of practice which violates OECD
sanctioned standards of conduct.
— There is a strong temptation to export our problems,
rather than taking steps to deal with them at home. It
is always easier to postpone painful decisions. But in
an increasing number of situations we have allowed
supposedly temporary measures to prop up ailing
industries or support employment in particular markets or
sectors of the economy to become permanent features of
our economies.
— Our economies are still struggling to achieve the basic
structural changes made necessary by the very abrupt
disruptive move from cheap energy to relatively high cost
energy. Our economies also face the need to adjust to
the rapid expansion of production of manufactured goods
in advanced developing countries. These developments in
basic economics — divergent growth, high and diverse
rates of inflation, protectionist moves and difficulties
in achieving structural adjustment — have led to
imbalances in international payments patterns, to
substantial shifts in nominal exchange rates and at times
of quite disorderly conditions in exchange markets.
Erratic flucturations of rates have in turn tended to
discourage investment and deter growth.
Our understanding of these common problems has helped us in
formulating and implementing policies to alleviate them. We
should not underestimate the progress we have made. But much
more can be done.
Growth
In the sphere of economic growth, we believe that a number
of the countries represented here could expand internal demand
over the next year or two at a more rapid rate than they achieved
in 1977 without significantly increasing the risk of inflation or
-3materially affecting the rate at which inflation is being
reduced. The scope for such action varies from country to
country but each of these nations is in position to take some
action as befits the structure and traditions of its economy.
There are a number of other countries among us which could
accept the higher domestic growth rates that might result from an
expansion of world markets leading to relaxation of a balance of
payments constraint. Still others, however, must give priority
to the strengthening of stabilization policies, since their
primary constraint is domestic inflationary pressures.
My own country falls in this last category. For more than
three years the average rate of economic growth in the United
States has been well in excess of the rate of increase in our
potential output. We have added 9.7 million persons to our
employment rolls in 38 months and our unemployment rate has
dropped from a peak of 9.1 percent in May 1975 to 6.1 percent in
May of this year despite an increase in the labor force. The
unemployment rate for male heads of households has been reduced
to 2.8 percent. We expect only a small further reduction before
the year is out. Increasingly, we shall have to rely heavily on
matching labor skills and locations to economic needs to achieve
further reductions in unemployment without adding to inflation.
The U.S. inflation rate, as measured by the consumer price
index, dropped from 12.2 percent in 1974 to 6.8 percent last
year. Recent rates have been even higher due to temporary
factors. The underlying rate seems to be stuck between 6-1/2 and
7 percent. We are working hard to bring this so-called
"underlying" rate down still further and are committed to doing
so. But for all of 1978 it is likely that the inflation rate
will be in the 7 percent range. Thus there are real limits to
continued rapid expansion of U.S. domestic demand.
jfoergy
Energy is a problem. All of us know that if we are going to
sustain growth over the medium and long-term, we must strengthen
our programs to conserve energy and to develop new sources. No
nation has a greater responsibility in this area than my own. We
are making progress. Our new cars get better mileage. As a
result of mandatory standards, the fuel economy of our 1985
-4automobile fleet will be roughly double, on average, its 1974
level. More and more Americans are insulating their homes and
businesses, and installing fuel saving furnaces and thermostats.
Such actions, together with corresponding efforts in the
industrial sector, have reduced the energy required by our
economy to produce a dollar of real output by more than 6 percent
since 1973. Throughout the economy the trend is toward further
energy-saving investments.
But the comprehensive energy legislation which President
Carter put before the Congress fourteen months ago has not yet
been enacted. We are deeply frustrated and embarrassed by this
inability of the Congress to act. We have recently redoubled our^
efforts to assure passage of this critical legislation this year.:i
Progress is being made. Should it fail, the President has made
clear that he will take administrative action under existing
laws.
Protectionism
Our consultations have also made it obvious that we must
work to resist protectionist pressures and reduce governmental
interference in the flow of international trade. We have agreed
to renew the OECD Trade Pledge. But there is more that we should
do. For one thing, we need to complete the MTN this year with an,
agreement that provides truly meaningful trade liberalization.
Moreover, we need to go forward — if we are not to be
forced backward — in reducing and eliminating destructive
competitive practices in official export financing activities.
The recently concluded Export Credit Arrangement, while good in
its way, goes only part way to meeting the need. The first few
months1 experience under it strongly suggests that it needs to bestrengthened and expanded. And it must be enforced — an
agreement serves no purpose unless it is obeyed. The United
States will join in the efforts, which should be undertaken
immediantely, to improve the International Arrangement. But it
should be understood that if there are no restraints agreed this
year on predatory official export credit competition and such
competition continues to escalate, there will be swift and
effective U.S. reaction.
-5The spread of governmental influence on trade has become
extremely serious. Our new IMF Articles — Article IV — contain
a prohibition against action to manipulate exchange rates and the
monetary system in order to prevent effective balance of payments
adjustment or to gain an unfair competitive advantage over other
members. I believe we must now find equivalent means to insure
that countries dp not manipulate the international trading
system, through governmental regulation or subsidy or other
actions which have the same effect. In the present situation,
with growth still too low and unemployment still too high, there
has been an accelerating, destructive tendency to subsidize
production in inefficient plants and industries. Though
frequently introduced for laudable purposes — maintaining
employment and fostering longer term industrial development —
such measures have also become a common means of avoiding
structural adjustment. In the process, trade flows are affected
and trading patterns become distorted, just as with more
traditional protectionist measures such as tariffs or quotas.
Thus I strongly support the proposals which have been
developed for a policy stance favoring, rather than resisting,
needed structural adjustment. We must actively promote the
dynamic changes in our economies required by high energy costs,
by the need for balance of payments adjustment, by technological
change, and by world progress generally. Avoiding the short-term
costs of structural change now merely multiplies the inevitable,
eventual price we must pay.
We must, in addition, adjust our economies to the very rapid
surge of production of manufactured goods in the more advanced
developing nations. We have for years encouraged the cry for
"trade, not aid." Quite a number of nations are ready to take us
up. We must keep our markets open to these nations and adjust
our own production to supply the goods these nations seek. At
the same time these countries must come to a better understanding
of their responsibilities in opening their markets and reducing
and eliminating their export subsidies.
Many developing countries still have a need for resource
inflows to support development programs which they are not in
position to finance fully by borrowing from the private markets.
!n fact, the magnitudes required continue, to increase, even
though the number of countries requiring such aid is diminishing.
-6Most of the members of this organization maintain bilateral
aid programs and also provide funds to the international
development lending institutions. Every effort should be made to
increase the amount of these contributions. It is President
Carterfs objective to increase the size of U.S. official
assistance to LDCs substantially. U.S. aid commitments for the
current fiscal year are expected to be $6.8 billion, an increase
of $1.2 billion from FY 1977. Congressional approval of our FY
1979 budget request would lead to a further increase in
commitments to $7.6 billion next year.
Those nations among us who find their external payments
positions in strong and persistent surplus should make a
particular effort to expand their aid programs quickly and to
untie their aid.
These areas — non-inflationary growth, trade
liberalization, positive adjustment, including export credit
cooperation, energy, and aid — constitute the basic elements of
an action program which would gradually ease the problems which
plague the economic policy makers.
Stability in Exchange Markets
Adequate progress in these areas will also bring with it
stability in foreign exchange markets and greater stability in
exchange rates. Stability in foreign exchange markets will feed
back on investment and trade prospects and help us to achieve our
growth targets. Maintaining this stability is important to us
all — as important to the United States as to any nation here.
Thus the United States is prepared to work for exchange
market stability. Markets can become disorderly, subject to
great uncertainty, dominated by psychological factors and
speculation- We have made clear that we are fully prepared to
intervene in the markets to counter such disorders. We have
intervened, at times in large amounts, for that purpose. And we
have taken other steps, such as interest rate moves by the Fed
and announcement of gold sales by the Treasury, that appear to
have been useful in strengthening the tone of the market. The
resources at our disposal for intervention are very large and we
are prepared to use them if and as required to counter market
disorders.
-7But all of us know that the real key to reductions in the
speed and extent of changes in foreign exchange rates and to
stability in foreign exchange markets lies in better performance
on the "fundamentals." The maldistribution of external payments
balances has resulted from the simultaneous impact of widely
divergent rates of inflation — and even more important — an
unusually wide divergence in rates of growth and capacity
utilization as well as the structural disruption of the oil price
shock. When we collectively demonstrate to the financial
community that growth will improve and that both the rate and the
divergence in inflation rates among nations will diminish, there
will be less movement of exchange rates and less risk of disorder
in the foreign exchange markets. The IMF will be developing
detailed procedures for implementing its new responsibilities for
multilateral surveillance of the economic policies which provide
the basis for exchange rate stability.
Development of Political Will
As finance or economic ministers, each of us has been
seeking to put in place the policies which will best meet the
problems of our respective countries. Each of us represents a
sovereign nation, which of course makes its own decision within
the framework of its own political system. Each must respond to
the national self-interest, as perceived by his own electorate.
The message I hope Ministers have drawn from all our
consultations and all the information about developments
elsewhere is that, in the long run, the national self-interest of
each nation is best served by policies which foster a healthy
world economy — a world economy of sustainable growth with
reasonable price stability in the context of an open, liberal
trade and payments system. Moreover, it requires that
international implications be factored into the decision making
in virtually all aspects of domestic economy policy — even in a
country like the United States where exports are only 7-1/2
Percent of GNP.
What it also means is that when national economic policies
are properly coordinated they will be mutually reinforcing. If
w
e all move forward together, we will all move forward farther.
I hope that this meeting will lay the basis for what the
Secretariat has called a program of concerted action, with each
Participant undertaking actions appropriate to his own situation
but mutually reinforcing in the international context.
-8We all know what should be done. Our common task is to
explain the need for action to our own peoples and to build the
domestic political support which will enable us to carry out the
policies required to succeed individually and collectively. Our
destinies a?e inextricably linked. We must go forward together
or not at all.
O00O
Contact:
Charles Arnold
566-2041
June 14, 1978
WILLIAM F. HAUSMAN, TREASURY OFFICIAL, DIES
William F. Hausman, age 64, Director of the Office of
Operations for the Assistant Secretary of the Treasury for
Enforcement and Operations, died in Bethesda Naval Hospital
June 12 of a pulmonary ailment.
As a career United States Marine Corps officer, Mr. Hausman
accumulated more than 4,000 flying hours as a military pilot
before retiring as a colonel in 1963. He then joined the National
Aeronautics and Space Administration as the Deputy Assistant
Administrator for International Affairs. Later he joined the
Commerce Department as Assistant Director, Division of Authorizations, Office of Foreign Direct Investment. He came to the
Treasury Department in 1968 as an advisor on foreign assets
control matters and liaison with other government agencies involving national security in relation to international financial
matters. He assumed his operations responsibilities in the
Treasury Department in 1969.
Born and reared in Indianapolis, Indiana, Mr. Hausman
was graduated with distinction from DePauw University, Greencastle, Indiana, in 1934 with a degree in political science. He
was a member of Beta Theta Pi social fraternity and the alpha
chapter of Sigma Delta Chi, the journalism honorary society.
Under the name of Sparks Hausman, he wrote for the Saturday
Evening Post and Liberty Magazine in the late 1930fs.
As a Marine Corps officer, Mr. Hausman was Chief of Staff
of the Fleet Marine Force, Atlantic, during the Cuban missile
crisis. He headed aviation base and jet aircraft groups, an
academic department at the National War College, Washington, D.C.,
an attache office in the U.S. Embassy in Colombia, and the nationwide Marine Aviation Reserve.
In 1973 Mr. Hausman received the Treasury Department's
Exceptional Service Award for his "outstanding contributions"
for "the initiation and supervision of a number of critical
programs and projects." He also received from the government of
Colombia their highest award, The Crux Boyaca.
Services will be held at 2 p.m. Friday, June 16, at the
Fort Myer Chapel with burial in Arlington National Cemetery.
The family requests that expressions of sympathy be in the form
°* contributions to a favorite charity.
B-979
- 2He is survived by his wife, Mary Jane; his brother,
Robert, of Humble, Texas; a daughter, Karen P. Garver of
Arlington, Virginia; two sons, Major W.F. Hausman, Jr., now
stationed in Nuremberg, Germany, and Joseph Lee Hausman of
Los Angeles, California, and six grandchildren, four in
Arlington, and two in Germany.
- o-
VtfartmentoftheTREASURY
WASHINGTON, D.C. 20220
TELEPHONE 566-2041
June 14, 1978
FOR RELEASE AT 4:00 P.M.
TREASURY TO AUCTION $3,000 MILLION OF 2-YEAR NOTES
The Department of the Treasury will auction $3,000
million of 2-year notes to refund $2,537 million of notes
maturing June 30, 1978, and to raise $463 million new cash.
The $2,537 million of maturing notes are those held by the
public, including $350 million currently held by Federal
Reserve Banks as agents for foreign and international
monetary authorities.
In addition to the public holdings, Government accounts
and Federal Reserve Banks, for their own accounts, hold
$794 million of the maturing securities that may be refunded
by issuing additional amounts of the new notes at the
j
average price of accepted competitive tenders. Additional
amounts of the new securities may also be issued at the
average price, for new cash only, to Federal Reserve Banks as
agents for foreign and international monetary authorities.
Details about the new security are given in the
attached highlights of the offering and in the official
offering circular.
oOo
Attachment
B-980
HIGHLIGHTS OF TREASURY
OFFERING TO THE PUBLIC
OF 2-YEAR NOTES
TO BE ISSUED JUNE 30, 1978
Amount Offered;
To the public
Description of Security:
Term and type of security
Series and CUSIP designation
Maturity date June 30, 1980
Call date
Interest coupon rate
June 14, 1978
$3,000 million
2-year notes
Series Q-1980
(CUSIP No. 912827 HV 7)
No provision
To be determined based on
the average of accepted bids
Investment yield To be determined at auction
Premium or discount
To be determined after auction
Interest payment dates
December 31 and June 30
Minimum denomination available
$5,000
Terms of Sale;
Method of sale
Yield auction
Accrued interest payable by
investor
None
Preferred allotment
Noncompetitive bid for
$1,000,000 or less
Deposit requirement 5% of face amount
Deposit guarantee by designated
institutions
Acceptable
Key Dates;
Deadline for receipt of tenders
Settlement date (final payment due)
a) cash or Federal funds
b) check drawn on bank
within FRB district where
submitted
c) check drawn on bank outside
FRB district where
submitted
Delivery date for coupon securities.
Tuesday, June 20, 1978,
by 1;30 p.m., EDST
Friday, June 30, 1978
Wednesday, June 28, 1978
Monday, June 26 , 1978
Friday, June 30, 1978
k.mttmentoftheJREASURY
^HlNGTON, D.C. 20220
TELEPHONE 566-2041
Wlw
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,*'
pr
>
IT.
pno PFT.F.ASE ON DELIVERY
FftECTKU AT y:iu t.u.a.T.
JUNE 15, 1978
TESTIMONY BY GARY- C. HUFBAUER
BEFORE THE
SUBCOMMITTEE ON INTERNATIONAL TRADE
OF THE
HOUSE COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
WASHINGTON, D.C.
Mr. Chairman, I am pleased to join in support of the
President's request to extend the emigration waiver authority
for Romania and Hungary under Section 4 02 of the Trade Act.
Both the Department of the Treasury, and the East-West
Foreign Trade Board, chaired by Secretary Blumenthal, also
strongly support the President's recent decision to renew
the U.S.-Romanian Trade Agreement for another three years.
We believe that the U.S.-Romanian Trade Agreement has
promoted the economic and political interests of both our
countries. Renewal of the Agreement will allow us to build
upon the foundations laid in the last three years.
The recent visit of President Ceausescu to the United
States underscores the importance which both of our nations
attribute to strengthening U.S.-Romanian ties. We believe
that it is in our interest to encourage Romania's independent policy orientation through further expansion of our
bilateral relations. Renewal of the Trade Agreement is
essential to this end.
B-981
- 2 Romania has fulfilled the two conditions necessary for
renewal of the Trade Agreement.
First, a satisfactory
balance of concessions in trade and services has been maintained.
Romania has given most-favored-nation tariff treat-
ment to U.S. products, and has been responsive to requests
to facilitate U.'S. business activities in Romania.
Secondly,
we are also satisfied that Romania will reciprocate satisfactory U.S. reductions in tariffs and nontariff barriers in
the Multilateral Trade Negotiations in Geneva.
The exact
amount of U.S. or Romanian concessions has not yet been
established, but the Romanian government recently reaffirmed
its Trade Agreement obligations to reciprocate U.S. concessions, taking into account its status as a developing
nation.
The Trade Agreement has contributed significantly to
the growth of U.S.-Romanian Trade.
Two-way trade grew from
5322 million in 1975, which was four times the value of
trade in 1970, to $448 million in 1976, and reached a
record $49 3 million in 19 77.
The U.S. has continued to
maintain a positive trade balance over this period.
The few
instances of threatened market disruption from Romanian
Sports have been resolved with minimal difficulty.
The
further growth of U.S.-Romanian trade in such a favorable
atmosphere depends on renewal of the Trade Agreement.
- 3 The Treasury also supports the President's determina-
tion that further extension of the emigration waiver authority.
for Romania will substantially promote the objectives of
Section 402 of the Trade Act. This extension is essential
for renewal of the Trade Agreement.
In order to earn hard currency, Romanian exports must
have access to Western markets, including our own. The
countries of Western Europe have granted most-favored-nation
status to Romanian exports. If the United States does not
continue to facilitate Romanian access to U.S. markets
through MFN, it may lose potential exports to Romania as
well. The President's emigration waiver will enable us to
continue granting MFN to Romania thus improving Romania' s
ability to earn hard currency to pay for imports.
Extension of the waiver is also required for Romania to
continue to utilize U.S. financing for its imports from the
United States. Without the waiver, Eximbank would not be
able to make loans or guarantees to Romania and U.S. exporters
would be at a competitive disadvantage. Commodity Credit
Corporation (CCC) credits, which have been instrumental in
increasing U.S. agricultural exports to Romania, also cannot
be extended without the waiver. Both forms of financing
obviously benefit U.S. exporters.
- 4 Mr. Chairman, our experience with the U.S.-Romanian
Trade Agreement has convinced us of its continued importance.
The Agreement has served as a cornerstone for the growth of
U.S.-Romanian relations both economically and politically.
We are satisfied that Romania has fulfilled the conditions
of the Agreement and that its renewal would continue to
strengthen U.S.-Romanian ties.
We are aware of the concern expressed by several members
of Congress regarding a Romanian decree which set arbitrary
limits on compensation for confiscation of U.S. property in
Romania. We share these concerns.
We have raised this
problem with the Romanian Government and will continue to
press the Romanian authorities to live up to their repeated
assurances to provide prompt, adequate and effective compensation in such cases.
While not directly related to the
renewal of the Trade Agreement or extension of MFN, the
payment of prompt, adequate and effective compensation is a
clear condition for Romania's continued enjoyment of GSP and
we have made this link very clear to the Romanian government.
In conclusion, Mr. Chairman, I believe that a threeyear renewal of the U.S.-Romanian Trade Agreement and a oneyear extension of the Presidential waiver is in our national
interest.
0O0
FOR RELEASE AT 4:00 P.M.
June 15, 1978
TREASURY'S 52-WEEK BILL OFFERING
The Department of the Treasury, by this public notice, invites tenders for
$ 2,750 million, or thereabouts, of 364-day Treasury bills to be dated
June 27, 1978,
and to mature June 26, 1979
(CUSIP No. 912793 V9 4).
The bills, with a limited exception, will be available in book-entry form only,
and will be issued for cash and in exchange for Treasury bills maturing
June 27, 1978.
This issue will provide $497 million new money for the Treasury as the
maturing issue is outstanding in the amount of $ 2,253 million, of which
$1,070 million is held by the public and $1,183 million is held by Government
accounts and the Federal Reserve Banks for themselves and as agents of foreign
and international monetary authorities.
Additional amounts of the bills may be
issued to Federal Reserve Banks as agents of foreign and international monetary
authorities.
Tenders from Government accounts and the Federal Reserve Banks for
themselves and as agents of foreign and international monetary authorities will be
accepted at the average price of accepted tenders.
The bills will be issued on a discount basis under competitive and noncompetitive bidding, and at maturity their par amount will be payable without interest.
Except for definitive bills in the $100,000 denomination, which will be available
only to investors who are able to show that they are required by law or regulation
to hold securities in physical form, this series of bills will be issued entirely
in book-entry form on the records either of the Federal Reserve Banks and Branches,
or of the Department of the Treasury.
Tenders will be received at Federal Reserve Banks and Branches and at the
Bureau of the Public Debt, Washington, D. C. 20226, up to 1:30 p.m., Eastern
Daylight Saving time, Wednesday, June 21, 1978.
Form PD 4632-1 should be used to
submit tenders for bills to be maintained on the book-entry records of the
Department of the Treasury.
Each tender must be for a minimum of $10,000.
be in multiples of $5,000.
Tenders over $10,000 must
In the case of competitive tenders, the price
offered must be expressed on the basis of 100, with not more than three decimals,
e
-8-, 99.925.
B-982
Fractions may not be used.
(OVER)
-2Banking institutions and dealers who make primary markets in Government
securities and report daily to the Federal Reserve Bank of New York their positions
with respect to Government securities and borrowings thereon may submit tenders
for account of customers, provided the names of the customers are set forth in
such tenders.
Others will not be permitted to submit tenders except for their
own account.
Payment for the full par amount of the bills applied for must accompany all
tenders submitted for bills to be maintained on the book-entry records of the
Department of the Treasury.
A cash adjustment will be made for the difference
between the par payment submitted and the actual issue price as determined in
the auction.
No deposit need accompany tenders from incorporated banks and trust companies
and from responsible and recognized dealers in investment securities, for bills
to be maintained on the book-entry records of Federal Reserve Banks and Branches,
or for definitive bills, where authorized.
A deposit of 2 percent of the par
amount of the bills applied for must accompany tenders for such bills from others,
unless an express guaranty of payment by an incorporated bank or trust company
accompanies the tenders.
Public announcement will be made by the Department of the Treasury of the
amount and price range of accepted bids.
Those submitting competitive tenders
will be advised of the acceptance or rejection thereof.
The Secretary of the
Treasury expressly reserves the right to accept or reject any or all tenders, in
whole or in part, and his action in any such respect shall be final.
Subject to
these reservations, noncompetitive tenders for $500,000 or less without stated
price from any one bidder*will be accepted in full at the average price (in
three decimals) of accepted competitive bids.
Settlement for accepted tenders for bills to be maintained on the records
of Federal Reserve Banks and Branches must be made or completed at the Federal
Reserve Bank or Branch on
June 27, 1978,
able funds or in Treasury bills maturing
in cash or other immediately availJune 27, 1978.
Cash adjustments
will be made for differences between the par value of maturing bills accepted
in exchange and the issue price of the new bills.
Under Sections 454(b) and 1221(5) of the Internal Revenue Code of 1954
the amount of discount at which bills issued hereunder are sold is considered
to accrue when the bills are sold, redeemed or otherwise disposed of, and the
bills are excluded from consideration as capital assets.
Accordingly, the
owner of bills (other than life insurance companies) issued hereunder must
-3include in his Federal income tax return, as ordinary gain or loss, the
difference between the price paid for the bills, whether on original issue or
on a subsequent purchase, and the amount actually received either upon sale or
redemption at maturity during the taxable year for which the return is made.
Department of the Treasury Circulars, Public Debt Series - Nos. 26-76 and
27-76, and this notice, prescribe the terms of these Treasury bills and govern
the conditions of their issue.
Copies of the circulars and tender forms may be
obtained from any Federal Reserve Bank or Branch, or from the Bureau of the
Public Debt.
oOo
ADVANCE FOR RELEASE SUNDAY MORNING
JUNE 18, 1978
TREASURY UNDER SECRETARY FOR MONETARY AFFAIRS
ANTHONY M. SOLOMON ON FLEXIBLE EXCHANGE RATES,
INTERVENTION, THE U.S. DOLLAR, INTERNATIONAL
MONETARY SYSTEM, AND OTHER POINTS
Following is the transcript of a filmed interview for
the U.S. International Communication Agency, taped on
Wednesday, June 6, with Under Secretary for Monetary Affairs,
Anthony M. Solomon.
B-983
Q. Mr. Secretary, does the United States feel that
flexible exchange rates have been as favorable for world trade
and economic growth as the old Bretton Woods system of fixed
exchange rates?
UNDER SECRETARY SOLOMON: Exchange stability is more
helpful to world trade than major fluctuations in exchange
rates. There's no doubt about it. On the other hand, it is
important that there be some flexibility in exchange rates,
to adjust for, to compensate for differentials in national
inflation rates. Otherwise trade relationships would get very
much out of line.
Secondly, the events after the oil shock increase in
1973 resulted in large payments imbalances and started forcing
structural readjustment which we still have not completed,
which would have made Bretton Woods fixed exchange rates
impossible and would have been very disruptive under the situation of these very unusual large payments imbalances. We needec
the flexibility in the monetary system to cope with the special
situation of the '70s.
Q. But there seems to be disillusionment with flexible
exchange rates and considerable sentiment for going back to
a system of fixed rates. Do you think a trend in that direction would be at all feasible or at all desirable?
UNDER SECRETARY SOLOMON: I do not believe that there
is a feeling in governmental circles abroad that we should go
back to fixed exchange rates. There is some disillusion with
inordinately wide fluctuations in exchange rates. But the
most that has been suggested in various circles has been that
there be cooperative arrangements to limit the amount of movement, 'not return to Bretton Woods fixed exchange rates, and
I know of no significant or highly prevalent attitudes among
monetary officials to move to fixed exchange rates.
Q. Some people overseas feel that the United States is
not interested in supporting the value of the dollar. Is this
true? And then why hasn't the United States been prepared to
-2intervene in foreign exchange markets on a large scale when
the value of the dollar was declining?
UNDER SECRETARY SOLOMON: Well, we certainly are
concerned about the value of the dollar, and we have attempted
to support it in the only meaningful way, long term meaningful
way, namely by taking action on domestic policies which will
tend to reduce our deficit. And that means working on our
inflation rate, getting our excessive energy import dependence
under control, and trying to eliminate the large differences
in growth rates. We have run a very high growth rate here,
while abroad there have been near recession levels of economic
activity, and this has resulted in a very major part of our
trade deficit.
Intervention is useful to a degree, but intervention,
even on a massive scale, cannot cope with fundamental trends
going in the wrong direction. We must take action on energy.
We must take action, even though it will be gradual, on curbing
our rate of inflation. We must promote exports. Other countries must achieve more satisfactory levels of growth for
their own interests, as well as for the purposes of reducing
imbalances in their payments positions. And therefore all
this will make for stability in the monetary area. We will
intervene, we have intervened, as we did in the first quarter
of '78, when markets are disorderly, and our intervention was
very large at times. But it is a mistake to think of intervention as the way of supporting the dollar.
Q. Are wide swings in exchange rates among the major
currencies harmful, in your view, to developing countries?
UNDER SECRETARY SOLOMON: I think they cause some
operating difficulties for developing countries, as well as
for some other countries, industrialized countries. But without the flexibility of the exchange rate system that we saw
in the '70s under these special circumstances, there would
have been major trade restrictions which would have hurt the
developing countries much more. The flexibility in the exchange
rate system under the special circumstances of the '70s was
absolutely essential to maintain an open trading system, and
that is more important to the developing countries than the
relatively modest operating difficulties they may have had
from fluctuations in the rate.
Q. So what, in your view, can and should the United States
and its industrialized trading partners do about this?
-3UNDER SECRETARY SOLOMON: Well, we are working on
what I've called earlier fundamental policies which will
reduce our deficit. In addition, we are intervening during
periods that the markets are disorderly. As you know, the
tone of the markets has improved recently and next year we
expect to see, towards the end of next year, various factors
which will make for a much healthier balance in the payments
system. The trade deficit should begin trending down and in
general I think we're on the right path. One has to view
these exchange rate movements in perspective. The amount of
the decline in the dollar since it came under pressure last
year has been almost exactly the same amount on a trade
weighted basis as the amount it appreciated in 1975, and in
'76 it stayed stable. Now, even though some of the individual
bilateral rate movements have been larger than that, one has
to look at the extent to which they simply compensated for
differences in inflation. If one looks at what we call the
real exchange values of different key currencies, the movement has not been very significant. I think we're on the
right policy, the right set of policies, the right path. We
have to continue with persistence and we have to make much
more clear, much more manifest, our determination to promote
exports, get our current inflation rate down, and to curb
excessive energy imports.
Q. Can we turn now to the international scene a little
bit more? Under the new international monetary system that
went into effect this year, how important do you believe is
the IMF's surveillance role?
UNDER SECRETARY SOLOMON: There is a potential there
for it to become the major force in promoting the global
adjustement process. The IMF has both broad authority to
promote the adjustment process under the new system, and it
has specific authority to conduct surveillance of appropriate
exchange rate policies by different countries.
If member countries will support — and the United
States, I pledge and commit ourselves to that support — the
Secretary of the Treasury said so in a public statement at
the last interim committee meeting. If other major countries
join with us in supporting the IMF really effectively using
its new surveillance authority, we believe will play a very
major force, and we have made some specific suggestions on
how the IMF can develop much more clout in this field.
-4Q. In your view is the IMF now equipped to exert real
leverage over members' exchange rate policies and domestic
economic policies?
UNDER SECRETARY SOLOMON: To some extent it will be
an evolutionary development of strength. But even at the
beginning phases we believe that the IMF can have a significant influence, and over a period of time, as it uses its
authority to initiate consultations with member countries,
where they believe that there may be inappropriate exchange
policies being followed contrary to the principles agreed on
in the new Article 4, that authority to initiate specific
consultations is very important. The authority to report to
the board of the IMF when the consultation has not worked out
satisfactorily puts tremendous pressure on countries to take
adjustment actions. Therefore, even though I would expect
that over the long run the authority and the ability of the
IMF to effectively survey these exchange policies will increase,
I would give as my considered opinion that even in the beginning
stages there is a substantial basis on which the IMF can build
and which will be very helpful.
Q. And in your view would the United States, and in 1
some respect even Congress, be willing to see our own domestic
policies come under the scrutiny or the surveillance of the IMF?
UNDER SECRETARY SOLOMON: We in the Executive Branch
have already informed the Fund that we are prepared fully to
have our policies come under their surveillance. We are prepared to give very serious consideration to their recommendations. The Congress has consistently supported the International
Monetary Fund. The Congress has passed by a very wide margin
the amended Articles of Agreement, in '76 actually, which
created this new legal system and gave these surveillance
authorities to the Fund. I would be very hopeful that the
United States will be in the lead and will cooperate if other
major countries do as well, with the Fund.
Q. Does the United States see the need for further reform
of the international monetary system, to deal with the growth
and the composition of reserves?
UNDER SECRETARY SOLOMON: That, I think, would distract
attention from what are the fundamental policies needed to
bring about a smoother global adjustment process. Two, mechanics.
-5I don't think what the world needs now is a new set of
mechanics in the monetary system, because they will not solve
the basic payments imbalance problem. That will be solved in
the way I've indicated. To distract attention through tinkering with the mechanics would be inappropriate and inadvisable
at this point, in my opinion. We have a new legal system.
It just went into effect in April. We've got to make it work.
And it goes right to the heart of the fundamentals of the
adjustment process. To come up with new mechanical devices, ,
whether crawling pegs or multilateral massive intervention
swaps, or some other form of change in the mechanics in the
system, does not go to the heart of the problem.
Q. One of the aims of the new articles of agreement of
the IMF is to increase the importance of special drawing
rights as an international reserve asset. As the use of SDRs
increase, wouldn't the relative significance of the dollar as
a reserve asset decrease?
UNDER SECRETARY SOLOMON: Well, we support the concept — in fact, we initiated it — of the special drawing
right, in place of metallic gold as an international reserve
asset. We encourage its evolution. It should be done on
a cautious scale. And we're perfectly prepared to see, over
the long run, a relative diminution of the role of the dollar
as a reserve asset held by official institutions, central
banks. I think that we have to move cautiously and see on the
basis of practice, how we can enlarge the role of the special
drawing right, so that it is more useful, more widely used.
I do not see any major displacement of the dollar by the
special drawing right. I think it would be a very useful
additional reserve asset, and I would hope that we will have
enough success in the evolution of the monetary system, as far
as the special drawing right is concerned, that we can see
that. But the United States has no particular objective in
regard to either increasing or diminishing the role of the
dollar as a reserve asset. Some people have argued that it
is a burden for the United States. Other prople have argued
that it is an advantage for the United States. Frankly, in
the Treasury assessment, and we've done very careful analysis
of this, we do not feel that it is either a significant special
advantage nor a significant special burden. At times it puts
us under more pressure. At times there are some advantages.
We're perfectly prepared to see a change in the role of the
dollar. The key thing is that it should, if it does come,
be part of the evolution of a smooth and effective monetary
system. And as I say, we'd be perfectly happy to continue
with the dollar in its special role. If the ultimate evolution
-6of the system is one which diminishes the role of the dollar,
we're perfectly prepared to live with that, as long as we
have a smoothly functioning monetary system.
Q. Mr. Secretary, how does the United States view closer
monetary ties among the European nations?
UNDER SECRETARY SOLOMON: Well, we've always supported,
of course, the concept of fuller European economic integration,
and I think it's a decision for the Europeans themselves.
It's perfectly compatible with the broad international monetary
system as we know it today, and if the Europeans make that
decision, or if it evolves in a more gradual way, I would
assume from everything I know about the way these things tend
to operate, that it would be perfectly compatible and therefore
we would have no problem with it.
Q. But what would happen if the creation of, say, a
European currency could possibly rival the dollar internationally?
UNDER SECRETARY SOLOMON: Well, that brings us bac|
to the earlier question, in a sense. If other countries, if
other currencies should develop more acceptance as reserve
currencies, that is again, if it develops smoothly, that is
a perfectly appropriate evolution from our point of view. r You
must understand, though, that for other currencies to become
meaningful reserve currencies, they have to open their capital
markets the way the United States has, and they have been _
reluctant to do that to the degree that we have. There is^no
way of having a really important reserve function for a currency
unless it has large capital markets to which the rest of the
world can have access, can borrow. The United States has
played that role. We could not have had the postwar economic
expansion in the entire world and the prosperity we've had
unless the United States had been willing to do that. If other
countries are willing to do that, or the European community
as a whole develops monetary union and a unit of account and
is willing to do everything that is required to — for that
currency to develop that reserve currency role, then assuming
that it is a smooth evolution, we would be perfectly happy with
that. My own personal view is that there would be considerable
reluctance to enter this role in any very rapid way, because
I think the opening up of capital markets in Europe is something
that most European governments would want to handle very, very
cautiously.
-7Q. Some U.S. officials often suggest that surplus nations
should boost their growth rates as a contribution to a better
balance of payments adjustment. But greater economic stimulus
is likely to mean more inflation. Is the United States in*
effect asking these countries to adjust their inflation rate
upwards, toward the average for other industrial nations?
UNDER SECRETARY SOLOMON: Definitely not. But there
are some countries, surplus countries, where there is such
slack in their economy, such idle productive capacity, such
substantial levels of unemployment, that it is perfectly
possible for them to expand their levels of economic activity
without inflationary stimulus. We would not want to see countries, whether the United States or any other country, expand
its economic activity in an inflationary way. But certainly
all economists agree that one cannot identify expansion of
economic activity when there are very slack underutilization
conditions with inflationary stimulus. That is not — I
thought that that belief was a 19th Century belief. Moving
countries up from near recession levels, to more adequate
levels of economic output and employment, does not introduce
inflation in an economy.
Q. The last question, Mr. Secretary. When national
governments make decisions on domestic economic policies,
they naturally tend to give top priority to domestic needs and
internal political situations. This being so, how can any
attempt at international coordination of growth policies have
any real effect on the economic decisions of individual governments?
UNDER SECRETARY SOLOMON: It's a very difficult
question that you pose, and my own personal view is that the
process that we are now engaged in of international consultation on what are basically perceived as domestic economic
policy issues, is going to be an evolving one over a long
period of time. If we're going to live in this increasingly
interdependent world,we will increasingly recognize that what
we have thought of in the past as domestic policy has a major
impact, not only on other countries, but on the viability of
trade and the international monetary system. And therefore,
indirectly back on everybody's prosperity. Therefore, there
must be coordination of global macro-economic policies and
domestic macro-economic policies.
Now, it's a very difficult process, adjusting one's
own national actions, given the domestic political setting
in each country, to the need to play a role in the adjustment
move
process
same direction,
in in
thearight
waywe
that
direction,
arehelps
all helping
others
even though
each
and thereby,
other
it may
nationally,
when
not be
wethe
all
and
-8domestically politically as well. This process of consultation has gone on and is going on at the OECD level, at
ministerial meetings, at the summit. It will be a continuing
process with the more we understand each other's situation
and the relevance of policies to needs, the better job we will
do on international coordination. I would not look for dramatic
results overnight. I would look, however, for evolution towards
more and more cooperation over the next few years.
FOR IMMEDIATE RELEASE
JUNE 15, 1978
STATEMENT BY SECRETARY OF THE
TREASURY W. MICHAEL BLUMENTHAL
I am delighted by this morning's 15-0 Senate Banking
Committee vote to provide $1.5 billion of guarantee authority
for New York City long-term debt. This unanimous vote for
long-term financing assistance means that the Administration,
the House of Representatives and the Senate Committee all
agree on this concept. The vote and the discussion in
Committee this morning also underscores the necessity that
the various private parties in New York assume a high level
of responsibility for the financing of New York's capital
needs in the next four years.
The Committee will now be considering the more technical
aspects of the bill, and we hope to work with them to insure
that any conditions for the issuance of guarantee are consistent with the Administration's ultimate objective of
assisting the City to regain access to the long-term capital
markets.
#
B-984
#
#
MrtmentoftheJREASURY
SHINGTON
IQNE 566-2041
CONTACT
Charles Arnold
202/566-2041
TEXT OF
Press Conference with
Secretary of the Treasury W. Michael Blumenthal
and
Council of Economic Advisers Chairman Charles L. Schultze
The following press conference was held following the
conclusion of the Organization for Economic Cooperation and
Development Ministerial Meeting in Paris on June 15:
SECRETARY BLUMENTHALI
- "YES, I MIGHT SAY LADIES AND GENTLEMEN* BY WAY OF
INTRODUCTION THAT WE ARE SATISFIED WITH THE OUTCOME
OF THIS MEETING AFTER TWO DAYS OF WIDE-RANGING
DISCUSSIONS ON ALL OF THE FUNDAMENTAL INTERNATIONAL
ECONOMIC ISSUES. AS YOU KNOW, WE ATTACH VERY GREAT
IMPORTANCE AND HIGH VALUE TO THE OECD AS THE PRINCIPAL
ORGANIZATION IN WHICH THE INDUSTRIALIZED DEMOCRACIES
CONSULT AND COORDINATE THEIR ECONOMIC POLICIES.
WE ARE IN A PERIOD IN WHICH THE COORDINATION OF THESE
ECONOMIC ISSUES, INCLUDING WHAT TRADITIONALLY HAS
BEEN THE DOMESTIC, PURELY DOMESTIC POLICIES, IS INCREASINGLY IMPORTANT IN AN INTERNATIONAL CONTEXT,
AND MEETINGS SUCH AS THIS ONE HELP ALL OF THE PARTICIPATING COUNTRIES TO LEARN HOW TO CONDUCT AND PERFECT
THIS PROCESS. AND THIS MEETING WAS A VERY IMPORTANT
STEP ALONG THIS WAY OF IMPROVING UPON IT.
—"IT IS THEREFORE PART OF AN ON-GOING PROCESS OF
MEETINGS AND WE'DID AT THIS MEETING I THINK ACHEIVE
A BROAD FOUNDATION OF POLICY AGREEMENTS AMONG ALL
OF THE OECD NATIONS UPON WHICH MEETINGS NEXT
SFIED THAT THE
—"MORE
ARE SATI
MONTH OFSPECIFICALLY,
THE EUROPEAN WE
COUNCIL
IN BREMEN Atf> THE
FOLLOWING
OCCURED AT THIS MEETING:
BONN
SUMMITACHIEVEMENTS
CAN BE BUILT.
FIRST, AN AGREEMENT ON THE BROAD ELEMENTS OF
A PROGRAM TO DEAL WITH THE MUTUAL PROBLEMS OF GROWTH,
INFLATION, UNEMPLOYMENT, PAYMENT IMBALANCES, AND THE
DEPENDENCE ON THE FOREIGN ENERGY SOURCES. SECOND,
THE RENEWAL FOR ANOTHER YEAR OF T HE OECD TRADE PLEDGE,
FIRST AGREED UPON IN 1974. THIRD , AN AGREEMENT ON
CRITERIA WHICH WILL GUIDE MEMBER GOVERNMENTS IN
NT THE
-TO STRUCTURAL
FORMULATINGAND
CHANGES.
POLICIES
FOURTH,FOR
AGREEMENT
ADJUSTME
0N
IMPORTANCE
B-985
-2OF STRENGTHENING COOPERATION AMONG THE OECD MEMBERS
IN THE DIALOGUE WITH THE DEVELOPING COUNTRIES INCLUDING SUCH KEY ELEMENTS AS A COMMITMENT TO AN OPEN
MULTILATERAL TRADING SYSTEM, A READINESS TO ADJUST
TO CHANGES IN THE PATTERN OF WORLD PRODUCTION AND
TRADE^ A DECISION TO EXAMINE THE USEFULNESS AND
PRACTICALITY OF INCREASING INVESTMENT FLOWS TO THE
DEVELOPING COUNTRIES AND A REAFFIRMED INTENTION TO
INCREASE DEVELOPMENT AID FLOWS EFFECTIVELY AND
SUBSTANTIALLY. ALSO, A REAFFIRMATION OF THE IMPORTANCE
OF ALL MEMBER OOUNTRIES, INCLUDING PARTICULARLY
THE U.S., OF ADOPTING AND IMPLEMENTING SOUND ENERGY
POLICIES, POLICIES WHICH WILL ENCOURAGE CONSERVATION
AND THE DEVELOPMENT OF ALTERNATIVE SOURCES OF
ENERGY. AND FINALLY, AGREEMENT ON THE IMPORTANCE
OF CONVENING A CONFERENCE AS SOON AS POSSIBLE TO
NEGOTIATE AN .AGREEMENT TO PREVENT ILLICIT PAYMENTS
IN CONNECTION WITH INTERNATIONAL COMMERCIAL TRANSACTIONS.
—"WE ALSO DISCUSSED, THE U.S. POINTED OUT, THE NEED
FOR IMPROVING UPON THE AGREEMENT WHICH WAS REACHED
IN THE CECD LAST FEBRUARY WITH REGARD TO LIMITATIONS
ON EXPORT CREDITS, AND ON THAT POINT WE MADE OUR
PROPOSAL IN THIS REGARD AND, AS THE COMMUNIQUE
INDICATES, OTHER NATIONS NOTED IT, AND IN VIEW OF
THE SHORTNESS OF TIME WERE NOT ABLE TO RESPOND BUT WE
LOOK FORWARD TO THESE DISCUSSIONS AS SOON AS POSSIBLE SO THAT HOPEFULLY 90ME AGREEMENT ON FURTHER
IMPROVEMENT CAN BE REACHED THIS YEAR.
—"I'LL BE HAPPY TO TAKE ANY QUESTIONS THAT YOU
MAY HAVE, EITHER FOR ME OR FOR MR. SCHULTZE.
Qt CBS NEWSx CAN I ASK A QUESTION PREVIOUSLY
ASKED AT THE OTHER PRESS CONFERENCE? WOULD THERE BE
HOPE THAT THE RATHER VAGUE AND UNSPECIFIC PROMISES
TO TAKE EXPANSIONARY ACTION WOULD BECOME MORE
FRECISE IN THE BONN SUMMIT?
A: BLUMENTHAL: WELL, THEY WILL MOST CERTAINLY
BE DISCUSSED AT THE BONN SUMMIT. AND I WOULD EXPECT
THAT NATIONS WILL WISH TO EXPRESS THEMSELVES AS
CLEARLY AS POSSIBLE AT THAT TIME. IT, OF OOURSE,
HAS A DIFFERENT MEMBERSHIP, LESS COUNTRIES ARE
^ " ^ P B E THERE. AS I SAID EARLIER THIS MEETING
IS A VERY USEFUL WAY STATION ON THE WAY TO BONN
AND THESE CONSULTATIONS WILL HOPEFULLY BE HELPFUL
TO ALL OF US IN DEFINING MORE PRECISELY OUR POSITIONS
ON THIS QUESTION.
WOULD
Qt YOU
CBS THINK
NEWS AGAIN:
OF QUANTITATIVE
DEFINING MORE
GOALS?PRECISELY,
.
-3-.
At BLUMENTHALl I DON'T THINK THERE WILL BE
QUANTITATIVE GOALS. I THINK WHAT IS IMPORTANT IS
THE RESULT THAT IS TO BE ACHIEVED RATHER THAN
SPECIFIC QUANTITATIVE NUMBERS ONLY.
Qt LONDON TlMESt LAST YEAR, YOU DID AGREE ON
QUANTITATIVE GOALS AT THE OECD. WHY SHOULD WE THIS
YEAR TAKE MORE SERIOUSLY THE VAGUER TARGETS YOU
SET THAN THE SPECIFIC TARGETS YOU GAVE LAST YEAR?
At BLUMENTHAL: I THINK THE PROCESS OF CONSULTATION THAT HAS OCCURED IN VARIOUS FORUMS, IN THE IMF
MEETING MOST RECENTLY AND THEN AGAIN HERE TODAY,
AND THE EXPERIENCE THAT WE HAVE ALL HAD, AND THE
NECESSITY TO ADJUST OUR VARIOUS DOMESTIC PROGRAMS,
HAS TAUGHT US THE IMPORTANCE OF AGREEING ON THE
GENERAL OBJECTIVES THAT WE WISH TO ACCOMPLISH, AND
OF FOCUSING ON THAT, AND ON THE KINDS OF PROBLEMS THAT STAND IN THE WAY, ACTIONS THAT NEED TO BE
TAKEN, RATHETHAN ON TRYING TO AGREE ON SPECIFIC
NUMBERS. WE FEEL THAT IF WE SPEND OUR EFFORTS MORE
IN DEFINING THESE PROBLEMS AND IN WORKING ON THEM,
THAT WE WILL GO FURTHER THAN IN TRYING TO DEFINE
SPECIFIC GOALS AND TARGETS.
A: SCHULTZEt MAY I ADD TO THAT THAT LAST YEAR
MY RECOLLECTION WAS THAT THE TARGET WAS A NUMBER FOR,
AN AGGREGATE NUMBER FOR A GROUP OF TWENTY-ODD
NATIONS WHICH IN ITSELF MAY MEAN NOTHING IN TERMS
OF SPECIFIC ACTIONS BY SPECIFIC NATIONS, WHEREAS IN
THE COMMUNIQUE ISSUED TODAY THERE WAS AT LEAST SPECIFIC DIVISION AMONG NATIONS DOING ONE THING AND
NATIONS DOING ANOTHER.
Qt COULD WE COME BACK TO THAT, BECAUSE YOU
DO HIT EIGHT NATIONS--COULD WE ASK ANOTHER QUESTION
THAT WAS ASKED IN THE PREVIOUS PRESS CONFERENCE .. .
OF THOSE EIGHT COUNTRIES, COULD YOU TELL US IN WHICH
COUNTRIES MEASURES ARE NECESSARY AND ALSO WHAT WERE
THE APPROPRIATE MEASURES. IN OTHER WORDS, DID YOU
DISCUSS DETAIILED MEASURES FOR THESE COUNTRIES?
At BLUMENTHALt WE DID NOT DISCUSS DETAILED
MEASURES FOR INDIVIDUAL COUNTRIES. WE DID POINT OUT
THAT, IN COUNTRIES IN WHICH THERE HAS BEEN SLOW
GROWTH, IN WHICH THERE IS A CAPACITY FOR FURTHER
GROWTH THIS SHOULD BE TAKEN INTO ACCOUNT. AM) THAT
OTHER COUNTRIES, THE U.S. FOR EXAMPLE, WHICH
HAS GROWN RATHER SUBSTANTIALLY OVER THE PAST TWO
YEARS, AND IN WHICH THERE WERE INFLATIONARY PRESSURES,
THE PR03LEM OF STABILIZATION WAS THE MORE PREDOMINANT
FITTED
OECD
PROBLEM.
MEMBERS
IN.BUT EXACTLY
WE DID WHERE
NOT DEFINE
EACH AMONG
INDIVIDUAL
THE VARIOUS
COUNTRY
-4Q: FIGAROt MAY I ASK YOU ABOUT PARAGRAPH 3, NUMBER
12, PAGE 5.
THERE SEEMS TO BE SOME ELEMENT
OF CONFLICT IN THE UNITED STATES AND CANADA'S POSITION
AND OTHER PARTICIPANTS REGARDING GUIDELINES FOR
EXPORT CREDITS, OTHER PARTICIPANTS WERE, I BELIEVE,
HOT QUITE READY TO START RENEGOTIATING SOMETHING
WHICH HAD BEEN NEGOTIATED NOT LONG AGO AND WANTED
TO SEE HOW IT WORKED. HOW DO YOU SEE THIS PROBLEM.
AND DO YOU THINK THERE IS A SORT OF AGREEMENT ALREADY
FOR ANOTHER CONFERENCE TOWARD THE END OF THE YEAR?
A: BLUMENTHAL: WELL, I THINK THIS PARTICULAR
PARAGRAPH—SUBPARAGRAPH THREE OF PARAGRAPH TWELVE
SPEAKS FOR ITSELF. AS FAR AS THE UNITED STATES IS
CONCERNED WE FELT THAT THE AGREEMENT CONCLUDED IN
FEBRUARY WAS FINE AS FAR AS IT WENT, BUT THAT THERE
WAS ALREADY EVIDENCE THAT IT WOULD BE USEFUL TO ENTER
INTO NEGOTIATIONS FOR FURTHER SUBSTANTIVE IMPROVEMENT
OF THE EXISTING ARRANGEMENTS. OTHER PARTICIPANTS
DID NOT DISPUTE THIS, BUT THEY DID NOT FEEL IN A
POSITION TO AGREE TODAY THAT A SPECIFIC NEW NEGOTIATION BE STARTED. THIS INDICATES, THEY DID
POINT OUT, THAT THERE IS A REGULAR REVIEW WHICH COMES
UP IN THE AUTUMN. WE FELT WE OUGHT TO GET TOGETHER
AS SOON AS POSSIBLE. WE FEEL THAT THIS AREA OF EXPORT CREDITS IS ONE THAT NEEDS TO BE REGULARIZED AS
MUCH AS POSSIBLE FOR IT HAS THE POTENTIAL OF,
POTENTIALLY DIVISIVE COMPETITION, AND WE THINK
EVERYTHING NEEDS TO BE DONE TO AVOID THAT.
Q: MR. SECRETARY, IN THIS CONNECTION IN YOUR
OPENING REMARKS YOU THREATENED SWIFT AND EFFECTIVE
ACTION. COULD YOU ELABORATE ON THAT PLEASE?
A: BLUMENTHAL: WELL, I WAS REFERRING TO THE
FACT THAT IN INSTANCES IN WHICH SOME COUNTRIES
ENGAGE IN EXPORT CREDIT SUBSIDIZATION THAT GOES
BEYOND THE EXISTING OECD GUIDELINES, OR THAT GOES
AGAINST THE SPIRIT OF THOSE GUIDELINES, THE PRESSURE
ON THE UNITED STATES THROUGH THE CONGRESS, AND ALSO
BASED ON OUR OWN VIEWS IN THE EXECUTIVE BRANCH OF
THE GOVERNMENT, TO INSURE THAT AMERICAN INDUSTRY
IS NOT DISADVANTAGED BY THAT, IS SO SEVERE THAT I
HAD TO TELL MY COLLEAGUES THAT WE WOULD HAVE TO MEET
THOSE KINDS OF ADDITIONAL 'SUBSIDIZATIONS OF CREDIT
TERMS WHERE THEY OCCUR. I, THEREFORE, FELT IHAl
RATHER THAN COUNTRIES INDIVIDUALLY ENGAGING IN THAT
Kit© OF COMPETITION, IT WAS BETTER FOR ALL OF US TO
GET TOGETHER TO TRY TO ELABORATE ON THE ARRANGEMENT
THAT HAS ALREADY BEEN NEGOTIATED.
-5Qt MR. SECRETARY, AS FAR AS THE FEDERAL REPUBLIC
OF GERMAN IS CONCERNED, ARE YOU SATISFIED BY THE
ATTITUDE SHOWN BY THE FEDERAL GOVERNMENT, AND THE
ffiOMISES GIVEN BY THE FEDERAL GOVERNMENT AT THIS
CONFERENCE?
At BLUMENTHAL: WELL, THIS WAS NOT A CONFERENCE
AT WHICH INDIVIDUAL NATIONS MADE INDIVIDUAL SPECIFIC
FROMISES. I AM SATISFIED THAT ALL OF THE COUNTRIES,
INCLUDING OUR GERMAN COLLEAGUES, SHOWED A REMARKABLE DEGREE OF AGREEMENT, IN COMPREHENSION ON THE
REQUIREMENTS FOR JOINT ACTION, AND AN INDICATION OF
A WILLINGNESS TO CONSIDER WHAT EACH OF THEM SPECIFICALLY WOULD BE ABLE TO DO. I THINK
THAT DID VERY MUCH APPLY TO OUR GERMAN COLLEAGUES.
WE WILL HAVE TO SEE SPECIFICALLY HOW THAT WORKS OUT
IN EACH
INDICIDUAL
CASE.
Q: THE
OECD STUDY
ON CONCERTED ACTION STATES
THAT IT IS UNLIKELY THAT OECD COUNTRIES CAN REACH
FULL EMPLOYMENT BY 1980 AND THEY CAN ONLY REACH IT
BY 1985 IF THEY DECIDE TO EXPAND THEIR GROWTH RATES
IN 1979 AND THEY CAN ONLY KEEP UNEMPLOYMENT WHERE
IT IS BY REACHING A FOUR PERCENT GROWTH RATE, IF
THE BONN SUMMIT ISN'T GOING TO COME OUT WITH ANY
QUANT IT I AT IV E TARGETS, WHAT KIND OF REASSURANCES
ARE YOU GOING TO GIVE TO THE GROWING ARMIES OF THE
UNEMPLOYED THAT THEY MAY GET SOME KIND'OF JOB BEFORE 1990, FOR EXAMPLE?
At SCHULTZE: IN THE FIRST PLACE, WHAT I THINK
IS VERY IMPORTANT IS THAT AT THIS MEETING, THERE WAS
ADOPTED A FRAMEWORK OF ACTION, NOT SPECIFIC
TARGETS COUNTRY BY COUNTRY, BUT A FRAMEWORK OF
ACTION IN WHICH ALL OF OUR COUNTRIES AGREED UPON
THE NECESSITY OF TAKING THE ACTIONS NECESSARY TO
BEGIN MOVING BACK TO FULL EMPLOYMENT. I THINK THE
FACT THAT THIS WAS WIDELY RECOGNIZED, AGREED UPON
WITHOUT A DISSENT, IS IN ITSELF VERY IMPORTANT, NOT
ONLY TO THOSE OF US WHO DEAL IN ECONOMIC POLICY, BUT
GENERALLY TO WORKERS AND OTHERS WHO EITHER ARE
UNEMPLOYED OR THREATENED BY UNEMPLOYMENT.
IT IS THAT AGREEMENT UPON THE PRINCIPLES OF ACTION,
RATHER THAN SPECIFIC PROMISES COUNTRY BY COUNTRY,
AS I BELIEVE THE SECRETARY GENERAL INDICATED
EARLIER IN HIS RESPONSE TO A SIMILAR QUESTION, THAT
WE ARE DEALING NOT JUST WITH CHANGES BETWEEN NOW AND
THE END OF 1978 OR THE END OF 1979, BUT WE'RE MOVING
ON A NUMBER OF FRONTS TO SEE THAT GROWTH CAN BE
IMPROVED
AND THORUGH
NOT ONLYAIMPROVED
THE SHORT
BUT
IMPROVED
NUMBER OFINPOLICIES
ONRUN,
A
-6SUSTAINABLE BASIS. AND, AGAIN, FROM COUNTRIES WITH
DIFFERENT INTERESTS AND DIFFERENT SITUATIONS THERE
WAS REMARKABLE AGREEMENT ON THE KIND OF POLICIES THAT
WE NEED. AND I THINK THAT WITHOUT TRANSLATING THAT
INTO NUMEROLOGY, THIS ITSELF IS A VERY IMPORTANT
DEVELOPMENT AND WILL, OVER TIME, BE TRANSLATED INTO
SPECIFIC ACTIONS NEEDED TO MAKE IT WORK.
3: COULD YOU EXPLAIN WHY THE UNITED STATES WAS
DISCUSSED SEPARATELY AND AT WHOSE SUGGESTION THIS
WAS DONE?
At I DON'T THINK THAT THE UNITED STATES WAS
DISCUSSED SEPARATELY PER SE. IT CLEARLY WAS DISCUSSED SEPARATELY AS REGARDS THE ENERGY QUESTION.
THAT IS NOT AT ALL SURPRISING, FOR THE ENERGY LEGISLATION WHICH HAS BEEN PENDING IN THE CONGRESS FOR
14 MONTHS HAS ON MANY OCCASIONS, NOT ONLY IN THE
UNITED STATES BY THE ADMINISTRATION, BUT ALSO BY
MANY OF THE FOREIGN COUNTRIES, BEEN POINTED TO AS
A VERY, VERY IMPORTANT FACTOR. AS YOU KNOW, THE
OBJECTIVE OF THAT LEGISLATION IS TO REDUCE THE
DEPENDENCE OF THE UNITED STATES ON IMPORTED ENERGY.
THE ACHIEVEMENT OF THAT GOAL HAS AN IMPACT ON ALL
COUNTRIES, AND, THEREFORE, THE INTERESTS OF OTHER
COUNTRIES IN OUR PASSING OF THAT LEGISLATION AND THUS
IN MOVING TOWARD ACHIEVING THAT GOAL IS OF GREAT
IMPORTANCE. WE, ON OUR OWN, REPORTED ON THE PROGRESS
THAT WE THINK IS BEING MADE IN THAT REGARD, AND WE
KNEW BEFORE WE CAME HERE THAT WAS A MATTER WE WOULD
BE C'JESTIONED UPON AND ON WHICH WE WOULD HAVE TO COMMENT ON THE PART OF MANY COUNTRIES WHO WANTED TO
PURSUE THIS.
C: WAS THIS THE OUTSTANDING PROBLEM REGARDING
THE UNITED STATES AT THIS CONFERENCE?
A: BLUMENTHAL: I DON'T THINK THAT'S THE OUTSTANDING PROBLEM. THE OTHER PROBLEM THAT ALSO WAS MENTIONED WAS THE RATE OF INFLATION IN THE UNITED
STATES. AND, AGAIN, WE WERE ABLE TO POINT TO THE
POLICIES WHICH HAVE BEEN PUT INTO EFFECT IN THE
UNITED STATES AND WHICH ARE NOW BEING IMPLEMENTED
TO INSURE THAT THE RATE OF INFLATION IS BROUGHT
IJJDER BETTER CONTROL AND THAT A DECELERATION IN
THE RATE OF INCREASE OF PRICES OCCURS.
Qt WHAT SPECIFIC AREAS OR ACTIONS OR PROGRAMS
IN THE U.S. HAS THE U.S. IDENTIFIED AS FALLING WITHIN
THE RESTRICTED PROGRAMS THAT MIGHT BE DEALT WITH
IN
THE
POSITIVE
POLICY?
HAVE
WE
FACT
•SO,
GOT
..'E MIGHT
ARE
TO THE
THOSE
BE POINT
A3LE
THEADJUSTMENT
TO
OF
SORT
TAKE
SAYING
OF CARE
THINGS
THATOFWETHAT
AS HAVE
WELL
CANSOME
AND
BE IN
DONE
IF
THAT
-7-
UNILATERALLY OR ARE BILATERAL OR MULTILATERAL
NEGOTIATIONS REQUIRED FOR THAT?
At BLUMENTHAL: IN THE CASE OF THE UNITED
STATES, WE HAVE, FIRST OF ALL, THE MAJOR POLICIES
THAT WE MUST FOLLOW ARE THOSE OF CONTAINING INFLATION AND DEALING WITH THE ENERGY PROBLEM,
SECONDLY, WE HAVE IN PLACE A SERIES OF PROGRAMS,
INCLUDING ADJUSTMENT ASSISTANCE, THE EXPANDED
ADJUSTMENT ASSISTANCE, IN ORDER TO INSURE THAT
WORKERS ARE REIRAINED WHO LOSE THEIR J03S IN DECLINING INDUSTRIES AND THAT A PERIOD OF TRANSITION
IS PROVIDED, SO THAT FOR INDUSTRIES THAT ARE IN
DIFFICULTY, SO THAT INCREASING EFFICIENCY CAN BE
ACHIEVED IN THESE INSTANCES IN THE UNITED STATES.
AS FAR AS OUR COUNTRY IS CONCERNED, THESE ARE THE
PRINCIPAL KINDS OF PROGRAMS THAT WE WOULD RESORT
TO.
Qt (NBC t.'EWS):MR.BOSWORTH OF THE COUNCIL OF WAGE AND
PRICE STABILITY FORECAST A RECESSION UfLESS SOMETHING
IS DONE ABOUT INFLATION THIS YEAR. NOW I REALIZE
THAT PEOPLE WHO HOLD THE JOB THAT HE DOES ARE
INFAMOUS FOR HOLDING PESSIMISTIC VIEWS. BUT IN YOUR
OWN VIEW, IS THERE ANY CHANCE OF A RECESSION IN THE
NEAR FUTURE IF INFLATION IS UNIMPEDED?
A:(SCHULTZE) :YES. THAT'S THE NICE SHORT AN3WZR.LET ME
ELABORATE A LITTLE BIT. IN THE FIRST FOUR MONTHS OF
THIS YEAR, CONSUMER PRICES IN THE U.S. WERE RISING
APPROXIMATELY, ALMOST TEN PER CENT A YEAR. FIRST, WE
THINK IT IS VERY LIKELY THAT THAT RATE OF INFLATION
WILL BE BROUGHT DOWN BECAUSE IT HAS A NUMBER OF
TEMPORARY FACTORS IN IT. SECONDLY, IN THE LONGER RUN,
LOOKING THEN BEYOf© 1979 AND 1980 THAT UNLESS WE CONTROL
THE RATE OF INFLATION, FIRST TO PREVENT IT FROM
ACCELERATING, THAT IS TO GET THE ADVANTAGE OF THOSE
TEMPORARY FACTORS COMING-9FF WHICH WILL BRING US
DOWN TO A LOWER RATE OF INFLATION, AND THEN PREVENT
IT FROM ACCELERATING, IF WE DON'T DO THAT, I THINK THEN
ONE MUST TAKE VERY SERIOUSLY THE POSSIBILITY OF RISING
INTEREST RATES AND REDUCED CONFIDENCE TO THE POINT
WHERE THE POSSIBILITY OF AT LEAST A GROWTH RECESSION
BECOMES POSSIBLE, IF NOT SOMETHING EVEN MORE THAN THAT.
3D I WOULD AGREE WITHOUT TRYING TO PUT NUMBERS ON IT
THAT IT IS VERY, VERY IMPORTANT TO CONTROL INFLATION,
NOT JUST FOR THE SAKE OF CONTROLLING INFLATION, BUT
THAT
TO
RESPONSIBLY
LITERALLY,
THROUGH
RECESSION
DO WE
KEEPS
ITTHE
DOINAND
THIS
THE
TOEFFECT
AANDAVOID
EVEN
WAY--WHICH
ECONOMY
IN
IN ON
WORSE.
A
COORDINATION
THROUGH
WAY—AND
CONFIDENCE,
MOVING
MAINTAINS
I THINK
THEWE
FORWARD
MONETARY
WITH
THINK
TO
IT'S
MODERATE
AVOID
POLICIES
BUT
VERY
IT SYSTEM
DOES
ISAGROWTH,
IMPORTANT
GROWTH
POSSIBLE
OFITAND
-8-
GOVERNMENTAL ACTION AND VOLUNTARY DECELERATION.
ELABORATING ON THAT SHORT ANSWER, YES, IT IS A PROBLEM
WF HAVE TO WORRY ABOUT. IT IS VERY IMPORTANT TO BRING
INRATION DOWN. WE THINK WE HAVE A PROGRAM TO DO IT.
WE HAVE BEGUN TO GET COOPERATION FROM A NUMBER OF
FIRMS IN DECELERATING THEIR PRICES. QUITE FRANKLY,
NEXT WE NEED TO MAKE SURE WE GET COOPERATION FROM LABOR
IN THE MAJOR CONTRACTS WHICH WILL BE COMING UP LATER
THIS YEAR, BUT PARTICULARLY IN L979 IN ORDER TO ACHIEVE
THAT OBJECTIVE.
Qt WHAT TIME FRAME ARE YOU TALKING ABOUT? ARE YOU
SAYING IT IS POSSIBLE BY THE END OF THE YEAR?
Al(SCHULTZE)t NO, I'M NOT TRYING TO PUT IT INTO A TIME
FRAME. I'M TRYING TO MAKE THE GENERAL POINT
WITHOUT TRYING TO FORECAST THE SPECIFIC TIME. THERE IS
A RELATIONSHIP BETWEEN CONTROLLING INFLATION AND
KEEPING GROWTH GOING. BUT I CAN'T PUT A TIME ON IT.
I THINK THERE'S NOT SOMETHING I'M TALKING ABOUT L980
OR L98L. I'M TALKING ABOUT CLOSER TO HOME THAN THAT,
BUT I'M NOT TALKING NEXT MONTH OR NECESSARILY SEPTEMBER.
BUT IT IS SOMETHING OVER THE MEDIUM TERM WE DO HAVE TO
WORRY ABOUT. MY COLLEAGUES BOTH WARN ME I SHOULD MAKE
IT CLEAR I AM NOT FORECASTING A RECESSION. I AM MAKING
A CONDITIONAL POINT THAT IN ORDER TO KEEP GROWTH
GOING IN THE U.S. IT IS NECESSARY TO CONTROL INFLATION.
Qt (NBC NEWS)t WOULD YOU NOTE THAT THERE IS A POSSIBILITY
OF RECESSION IF INFLATION CONTINUES?
At(SCHULTZE):.IF INFLATION IS NOT CONTROLLED.
?: (L.A.TIMES) t MAY I ASK A GENERAL FOLLOW-UP? IN VIEW
OF THE DISCUSSION THE LAST FEW DAYS, WHAT KIND OF
GENERAL ASSESSMENT ARE WE GOING TO HAVE OF THE ECONOMIC
OUTLOOK FOR THE OECD AS A WHOLE BY THE TIME YOU MEET
NEXT JUNE?
A: (BLUMENTHAL) t I WOULD SAY THAT THE DEGREE OF CONSENSUS
THAT HAS BEEN DEVELOPED THROUGH VARIOUS MEETINGS, AND
SPECIFICALLY HIGHLIGHTED AT THIS MEETING, THAT CONCERTED,
COORDINATED ACTION ON A VARIETY OF FRONTS IS NEEDED
BY DIFFERENT COUNTRIES DEPENDING ON THEIR INDIVIDUAL
CIRCUMSTANCES, IN SOME INSTANCES TO CONTROL INFLATION
AND TO MAKE THAT A PRIORITY, IN OTHER INSTANCES TO
INSURE ADEQUATE AND ACCELERATED GROWTH. AT THE SAME
TIME, THE COMMITMENT WHICH HAS NOT BEEN MENTIONED HERE
THIS EVENING BUT WHICH IS VERY IMPORTANT OF EVERYBODY
--ALL OF THE OECD NATIONS, TO INSURE A SIGNIFICANT
RESULT IN THE TRADE NEGOTIATIONS, SO AS TO COUNTERACT
ANY
TENDENCIES
AND TOWHICH
PROMOTE
TOGETHER
INCREASING
WOULD
WORLDTOWARD
INDICATE
TRADE,PROTECTIONISM,
THAT THE
ALL OF
RECOVERY
THESE
THINGS
WE
-9-
HAVE SEEN SINCE THE LAST TIME WE MET, IN THE OECD
COUNTRIES WILL CONTINUE AND WILL CONTINUE AT A
FASTER RATE THAN WOULD BE THE CASE IN THE ABSENCE OF
THIS KIND OF OONSENSUS AND THIS KIND OF CONCERTED
ACTION. I THINK, THEREFORE, THAT ONE OF THE GENERAL
POINTS THAT ONE COULD MAKE ABOUT THE RESULT OF THIS
MEETING IS THAT THIS CONSENSUS GIVES ONE GOOD
CONFIDENCE THAT THERE WILL BE A DEGREE OF ACCELERATED
GROWTH, THAT THERE WILL BE COOPERATION IN
CONTROLLING INFLATION AND IN CONTINUED, THEREFORE,
STABILITY IN THE EXCHANGE MARKETS, AND IN THIS WAY,
GENERAL ECONOMIC CONDITIONS HAVE A GOOD CHANCE OF
Q:
THANK YOU, MR. SECRETARY.
IMPROVING.
For Release Upon Delivery
Expected at 9:00 a.m.
STATEMENT OF
DANIEL I. HALPERIN, TAX LEGISLATIVE COUNSEL
DEPARTMENT OF THE TREASURY, OFFICE OF TAX POLICY
BEFORE THE
SUBCOMMITTEE ON TAXATION AND DEBT MANAGEMENT
OF THE SENATE FINANCE COMMITTEE
June 19, 1978
Mr. Chairman and Members of the Subcommittee:
We welcome the opportunity to present the Treasury
Departments views on the 12 miscellaneous bills to be
considered by your Subcommittee. The most far-reaching and
important of these bills is S. 3134 (the only one of the 12
which has not been passed by the House) and I want to devote
the bulk of my statement to a discussion of the Departmental
position on that bill. The Treasury's views on the other 11
bills are summarized at the end of my statement and fully
described in the appendix.
However, before turning to S. 3134, I would like to
comment briefly on what we see as the purpose to be served
by consideration of these miscellaneous bills. It is
extremely important to have a forum for the examination
of legislative proposals that might bear on only one of the
many sectors of our society; proposals that might otherwise
not receive adequate attention from Congress. The existence
of such a forum encourages continuous review of the law by
both the Internal Revenue Service and groups in the private
sector such as the American Bar Association and the American
Institute of Certified Public Accountants. This continuous
review promotes an atmosphere in which necessary corrective
changes may be identified and enacted expeditiously.
On the other hand, we urge extreme caution in the use
of the miscellaneous bill procedure to create special exceptions to generally applicable rules for particular
taxpayers. Opinions may differ as to whether such relief is
B-986
- 2 equitable in the particular case involved. However, we
should all recognize that special exceptions inevitably
increase the complexity of the Code, invite other taxpayers
to seek similar relief and, unless scrupulously drafted, may
create new potential for abuse. As noted in the Appendix,
the Treasury opposes H.R. 1920 and H.R. 2984 on their
merits; but even if you disagree with us we urge the Subcommittee to consider these other factors — complexity and
potential for abuse -- before approving these proposals.
The guiding principle for the Treasury in our review of
these miscellaneous bills is the continuing effort to
further simplicity,' as well as equity, in the tax law.
Thus, while we continue not to raise any objections to
H.R. 5103, we are disappointed in the industry reaction to
our alternative suggestion that warranty adjustments for
taxes be eliminated in favor of a reduction in the original
tax on tires.. I have read H.R. 5103 and the background
material a number of times, and I will readily admit that I
do not fully understand all its ramifications. If it is at
all possible to eliminate a substantial administrative
burden for both the IRS and the industry without an overall
increase in tax, we should push as hard as we can to see if
it is feasible.
Let me now turn to S. 3134. This bill would provide an
exemption from Federal income taxes for years 1970-77 for
statutory subsistence allowances received by certain State
police officers. The bill is intended to reverse as to
prior years, the result of the November 1977 Supreme Court
decision in Kowalski holding that meal allowances paid by
New Jersey to its State troopers are includible in income.
On the merits there is no justification for treating a
portion of compensation as tax-free merely because it is
designated as a subsistence allowance. Such a special tax
exemption would be unfair to the overwhelming majority of
American workers who must pay tax on the compensation out of
which they buy their meals and meet their other subsistence
needs.
S. 3134 would recognize this by not allowing tax
exemption for the future. Further, it allows tax exemption
for 1970-76* only to those police officers who claimed the
* For 1977, the relief would be available to all State police
who received subsistence allowances.
- 3 exclusion in a tax return filed prior to the Kowalski
decision. The case for the bill must then rest on the
supposed unfairness of applying the Kowalski decision for
prior years
to those who acted as if the subsistence
allowance was tax exempt. In our opinion there is no
support for this position.
First, it must be understood that the idea that State
troopers1 meal allowances are includible in income is not
new. In 1954 Congress enacted an exemption for State and
local police subsistence allowances of up to $5 a day.
Within a few years, Congress found that amounts which
constituted ordinary police salaries had been designated as
subsistence allowances to obtain the benefits of the exemption. The Senate Finance Committee reported that a
number of States and localities had altered, or were in the
process of altering, the form of payment of compensation to
their police officials in order to maximize utilization of
the exemption.
In 1958 the Finance Committee concluded that there was
"no reason to provide what in effect is likely eventually to
amount to a $5 a day tax exclusion for police officials."
The Committee believed that the exclusion was "inequitable
because there are many other individual taxpayers whose
duties also require them to incur subsistence expenditures
regardless of the tax effect." Therefore, to "bring the tax
treatment of subsistence allowances for police officials in
line with the treatment of such allowances in the case of
other taxpayers," the Committee recommended that the exclusion
be repealed. Congress promptly followed this advice.
Second, the IRS has consistently taken the position
that subsistence allowances were taxable. While it was not
successful in several courts of appeal, the U.S. Court of
Appeals for the First Circuit upheld the IRS position as
long ago as 1969. Ever since 1970, the Internal Revenue
Service has required States to withhold income taxes from
State troopers' meal allowances and such taxes have been
withheld.
State troopers who owe taxes based on the Kowalski
decision owe such taxes only because they claimed refunds of
taxes withheld on meal allowances. Those refunds were
claimed in disregard of the Internal Revenue Servicefs longstanding position. Most of the refunds were claimed by State
troopers in New Jersey even though New Jersey troopers were
- 4 aware that the IRS was contesting their position and were
advised by their own association in 1974 to set aside
additional money to pay income taxes that might be due. If
the Supreme Court decision in Kowalski imposes hardship by
requiring, in effect, that the refunds be repaid to the
Federal Treasury, the risk of such hardship was voluntarily
chosen.
Third and most important, S. 3134, if enacted, would
set a precedent which has very serious implications for
administration of the tax law. Providing a tax exemption
for only those allowances received in 1970 through 1976
for which tax refunds were claimed would provide about
$6 million, all of which would go to State troopers who
chose not to follow the Internal Revenue Service's interpretation of the law and most of which would go to State
troopers in New Jersey.* We cannot administer the tax
system if taxpayers who unsuccessfully contest an IRS
position are liable for taxes only for years following the
court decision. This is unfair to those who do not contest
the position and it encourages everyone to take aggressive
positions on their returns since they have nothing to lose
and everything to gain by doing so.
It should go without saying that we have sympathy
for the plight of the New Jersey trooper but it is inequitable to expect taxpayers in the other 49 States to bail
them out. As suggested in a New York Times editorial of
May 18, 1978, "A fairer solution would be for New Jersey to
grant the troopers bonuses
pay raises in the
o or
O retroactive
o
amount of their tax debts."
* Providing a tax exemption for all allowances received in
1977, as S. 3134 would also do, would provide an additional
$2 million to State troopers in about 16 States.
Summary of Treasury Department Positions
1- s» 3134 (police officer - subsistence allowances) — Opposed
2- H.R. 810 (foreign travel — government officials) — Not
opposed in principle. Suggests limit to coach air fare
3. H.R. 1337 (constructive sales prices - trucks) — Supports.
Suggests delay in effective date.
4. H.R. 1920 (repayment of liquor excise taxes) —
Opposed.
5. H.R. 2028 (home production of beer and wine) — Not opposed,
6. H.R. 2852 (crop dusters) -- Supports refund to crop sprayer
if farmer waives right in writing.
7. H.R. 2984 (trailers for farm use) -- Opposed.
8. H.R. 3050 (accounting for sale of magazines) — Supports
in principle but recommends modification in treatment
of prior year's adjustment for magazines.
9. H.R. 5103 (tire warranty adjustments) — Does not oppose.
10. H.R. 6635 (retirement bonds) — No objection if certain
modifications are made.
11. H.R. 8535 (child care payments to relatives) — Not opposed
12. H.R. 8811 (Tax Court judge) — Supports.
Appendi
Treasury Department Recommendations on 11 Bills
to be Considered by Subcommittee on
Taxation and Debt Management
2. H.R. 810.
The Tax Reform Act of 1969 added a provision to the
Code (section 4941) which in general prohibits certain transactions between private foundations and certain "disqualified
persons," by imposing a graduated series of excise taxes on
the disqualified person (and in certain circumstances on the
foundation manager). Government officials are "disqualified
persons" for this purpose except for certain specifically set
forth transactions including the payment of expenses of
domestic travel. The bill would provide an additional excepti
for payment or reimbursement of foreign travel expenses of a
government official by a private foundation.
The Treasury Department recommends that H.R. 810 be
amended to limit the permitted amount of reimbursable transportation expenses to the cost of the lowest coach or economy
air fare charged by a commercial airline.
The recommended change would make the reimbursable
amounts under the bill consistent with the limitation on
deductions for attending foreign conventions under the
Administration's 1978 tax program. Treasury would not oppose
H.R. 810 if this change were made.
- 2 -
3. H.R. 1337
Present law provides that for purposes of computing a
manufacturer's excise tax on sales at retail of trucks, buses,
and trailers the taxable price is the lower of (1) the price
for which the article is sold or (2) the highest price at which
competing articles are sold to wholesale distributors in the
ordinary course of trade.
If a manufacturer has an established
practice of selling taxable articles in substantial quantities
to wholesale distributors, the tax on his sales at retail
ordinarily will be computed upon the highest price for which
similar articles are sold by him to wholesale distributors.
Where the manufacturer does not ordinarily sell trucks and
trailers to wholesale distributors (and few do), the
constructive price for sales at retail is 75% of the manufacturer's retail selling price.
However, this constructive
price cannot be less than the manufacturer's cost where the
manufacturer has an established retail price, and cost plus
10% where (as in the case of custom work) he does not have an
established retail price.
H.R. 1337 would eliminate the use of an individual manufacturer's costs (or cost plus 10%) in determining a
constructive price in the situation where the 75% rule is now
applied, i.e., sales at retail where the manufacturer does not
sell such articles to wholesale distributors,
in addition,
- 3 even if the manufacturer does sell such article to wholesale
distributors, he would be required to adjust the price of his
retail sales by the ratio generally prescribed for manufacturers
who do not sell to wholesalers.
The Treasury Department supports H.R. 1337. The not less
than cost rule produces uncertainty at the time of sale as to
the amount of the manufacturer's excise tax liability. Computing "costs" is always complicated, especially the problem
of allocating overhead costs. A straight percentage of retail
price would greatly simplify matters for the trade and the
Internal Revenue Service.
The Treasury Department recommends that the effective date
of the bill be September 30, 1978 to eliminate the possible
need to adjust taxes on sales made before enactment of the bill.
Even though the not less than cost rule is deleted, we
recommend repetition of the explanation in the report on
H.R. 1337 by the House Committee on Ways and Means
(H.R. No. 95-976) that the rule may continue to be prescribed
for constructing a taxable price where a person makes and uses
a taxable item (sec. 4218 of the Internal Revenue Code). Such
item may be a specialized unit which is never sold, so that
no market price is available from which to construct a manufacturer's price. In this case, cost of production is the
°nly realistic tax base.
- 44. H.R. 1920
The proposed bill would require the Treasury Department
to repay the amount of internal revenue tax paid (or determined
and customs duty paid on distilled spirits, wine, rectified
products, and beer, which, while being held for sale, are lost,
rendered unmarketable, or condemned by duly authorized official
by reason of fire, flood, casualty, or other disaster, or
breakage, destruction, or other damage (excluding theft)
resulting from vandalism or malicious mischief. No reimbursement would be made for tax losses of less than $250 per
occurrence, or for losses covered by insurance.
Present law provides for similar payments for both
alcoholic beverages and tobacco products (without the $250
minimum requirement) , only in the case of a "major disaster" a
declared by the President.
The Treasury Department is opposed to H.R. 1920. The
dollar a business invests in inventory is a dollar of cost
irrespective of the factors going to make up the cost, whether
such factors be raw materials, wages, transportation, or taxes.
Past Congressional policy as to casualty losses has recognized
this fact and, as a consequence, losses by handlers of alcoholi
beverages, except in the case of disasters of extraordinary
severity, have been treated as ordinary business hazards to be
borne by the holder of the beverages or his insurance company.
- 5 -
H.R. 1920 woul4 provide an exception to this general policy by,
in effect, having the Federal government provide free insurance
to dealers in alcoholic beverages for the portion of their
inventory reflecting internal revenue tax and customs duty.
By so doing, the Federal government would be treating those
holding alcoholic beverages for sale on a more favorable basis
than other merchants selling products subject to excise taxes
and all merchants selling products not subject to excise
taxes.
H.R. 1920 would be difficult to administer. It would be
quite difficult, often impossible, to make a factual determination as to the amount of loss by vandalism or malicious mischief
as distinguished from theft or mishandling. And in the case of
civil disorders, the circumstances often would make it virtually
impossible to segregate the cause of losses.
The present "major disaster" provision also provides
dealers in alcoholic beverages and tobacco with free insurance
that is not given to dealers in other products, both products
subject to excise taxes and those not taxed. Since there is no
reason why dealer's losses of alcoholic beverages and tobacco
products should be treated differently than losses of other
products, repeal of the "major disaster" provision is indicated.
- 6 5. H.R. 2028
Under present law, the head of any family may, after
registering, produce up to 200 gallons of wine a year for
family use without payment of tax.
An individual who is
not the head of any family is not covered under this
exemption.
Existing law has no provision which authorizes
the home production of beer.
H.R. 2028 would permit any adult (an individual 18 years
of age or older) to produce specified amounts of wine and
beer for personal or family use and not for sale without payment of tax.
Individuals would have to register before producing
tax free beer and could not have more than 30 gallons of beer
on hand at any time.
The exemption under Federal law would
not serve to authorize the home production of beer contrary
to State law.
The Treasury Department has no objection to the enactment of H.R. 2028.
The deletion of the present law require-
ment for registration by producers of wine for personal or
family use reflects the fact that registration has proven of
little use to the Bureau of Alcohol, Tobacco and Firearms
and is burdensome to the public.
However, for enforcement
and revenue protection purposes, registration and the
inventory limitation are necessary in the case of home brew,
since the process entails the production of a mash fit for
distillation.
- 7 -
6. H.R. 2852
Under present law, when gasoline or special fuels are used
on a farm for farming purposes by a custom operator, credit
or refund of the tax on the fuel so used can be claimed only
by the owner, tenant or operator of the farm. The bill would
revise the law to provide that an aerial applicator (crop
duster, etc.) would be entitled to the credit or refund of
gasoline and special fuels excise taxes used in aerial
applications on a farm.
The restriction of the farm fuel tax refund to the owner,
tenant or operator of a farm was intended by the Congress to
assure that the farmer received the benefit of the refund.
It was felt that if the refund were given directly to the
custom operator, the farmer would not benefit through a lower
price for the custom work. Over the years since the enactment
of the credit or refund provision, it has been argued that
the farmer hasn't gotten the benefit of the refund for custom
work because the custom operator doesn't give him the information as to gallons used so that he (the farmer) can claim
the refund. The instant bill would meet this argument by
permitting an aerial applicator doing custom work to apply
for the farm fuel refund without any consent from or notification to the farmer. This would not be consistent with the
original intent of the Congress of making sure that the
farmer received the benefit of the credit or refund of the
tax on fuel used by the custom operator.
- 8 -
The Treasury Department would support H.R. 2852 if it
were amended so that the farmer would have to waive in
writing to the aerial applicator his right to a refund. This
would put the farmer on notice as to the existence of the
credit or refund provision and permit him to obtain the benefit
of the credit or refund indirectly through a reduction in the
fee paid to the aerial applicator or to apply himself for the
credit or refund. The waiver provision was in a bill ordered
reported out by the Ways and Means Committee in the mid-1960 's.
That bill, although supported by Treasury and the Department
of Agriculture, was never enacted.
The Treasury Department also suggests that H.R. 2852 be
extended to cover all custom work, not just aerial application,
since plowing and harvesting is done by custom operators.
- 9 -
7.
H.R. 2984
The bill would exempt from the 10% manufacturer's excise
tax on trucks, truck trailers, and buses/those trailers or
semitrailers which are suitable for use with a towing vehicle
having a gross vehicle weight of 10,000 pounds or less and
which are designed to be used for farming purposes or for
transporting horses or livestock. Provision also is made for
refund of the tax to dealers holding tax-paid trailers exempted
by the bill which they hold for sale on the day after the date
of enactment of the bill.
The Revenue Act of 1971 (Public Law 92-178) exempted
from the manufacturer's excise tax trucks with a gross vehicle
weight of 10,000 pounds or less and trailers and semitrailers
with a gross vehicle weight of 10,000 pounds or less if
suitable for use with a vehicle having a gross vehicle weight
of 10,000 pounds or less. The proposed bill would remove the
present 10,000 pound limit for the exemption of trailers and
semitrailers provided they were designed to be used for farming
purposes or for transporting horses and other animals.
Because the trailers proposed to be exempted would have
a gross vehicle weight in excess of 10,000 pounds, the exemption would be accorded to trailers with a gross vehicle
weight at which single unit trucks are taxable. The proposed
exemption for trailers thus would constitute an obvious discrimination against single unit trucks in the 10,000 to 20,000
Pound class.
- 10 -
The bill also would create a dual standard for trailers
over 10,000 pounds gross vehicle weight which are suitable
for use with pickup trucks.
Those designed for farming
purposes or the hauling of animals would be exempt, while
trailers of the same capacity designed for hauling general
merchandise, or supplies and equipment for mechanics, would
continue to be taxable.
The Treasury opposes H.R. 2984 because the bill would
discriminate against single unit trucks and non-farm trailers
and semitrailers of the same carrying capacity.
It could also
be expected that there would be problems in differentiating
trailers and semitrailers "designed to be used for farming
purposes" from similar vehicles designed for the carriage
of general cargo.
- 11 -
8.
H.R. 3050
To ensure that retail outlets have an adequate number
of copies of magazines, paperback books and records, publishers
and distributors often distribute more copies of a magazine,
book or record than it is anticipated the retailer can sell.
When the retailer has sold as many of the particular items as
will be likely, he returns the unsold merchandise to the
publisher or distributor. The Internal Revenue Service has
taken the position that accrual basis publishers and distributors
must include the sale of the magazines, paperback books, and
records in income when they are shipped to the retailers and
may exclude from income the returns only when the merchandise
is actually returned by the retailer during the taxable year.
The bill would allow accrual basis publishers and distributors of magazines, paperbacks and records to elect to exclude
from income amounts attributable to merchandise returned within
a specified period of time after the close of the taxable year
in which the publisher or distributor shipped the merchandise
to retailers.
The bill requires publishers and distributors of paperbacks
and records who elect the new method to establish a suspense
account to avoid a double deduction for the initial year under
- 12 -
the new method.
In the case of returns of magazines, the bill
permits taxpayers to amortize the deduction attributable to
actual returns from prior years sales in the year the new
method is elected over a five-year period.
The Treasury Department believes that the special relief
provided by the bill should be allowed only to those taxpayers
who, in the year they elect the new method of accounting,
establish a suspense account. The suspense account procedure
essentially allows the new method of accounting for the future
while delaying the deduction for the additional amount the
taxpayer would have deducted for all past years under the new
method as opposed to the old until there is a termination or
decline in business. If this approach is not taken there would
be an additional revenue loss ($86 million for books and records
if the entire deduction were allowed in the year of change)
which could prevent the adoption of what we believe are sound
accounting procedures for those industries and others which may
have similar problems. Current allowance of deductions denied
in prior years may well provide a windfall gain to current
owners since the tax burden may well have been borne by customers
or prior owners. However, in the case of an election to account
for magazine returns under the bill, if the Subcommittee believes
amortization of the transitional adjustment is preferable to the
- 13 establishment of a suspense account, the Treasury Department
recommends that the normal ten-year amortization period for
such an adjustment be used instead of the special five-year
amortization period provided by H.R. 3050. The TreasuryDepartment would oppose amortization of the transitional
adjustment for publishers and distributors of paperback books
and records who elect the new method of accounting.
- 14 9. H.R. 5103
The bill would provide credit or refund to the manufacturer
or importer of the excise tax on tread rubber destroyed or
scrapped in the retreading or recapping process or used in
retreading or recapping a tire which is used or sold for
purposes for which new tires may be used or sold tax free.
Provision is made for credit or refund to the manufacturer or
importer of the taxes on tread rubber or on new tires where the
sales price of the recapped or new tire is later adjusted pursua
to a warranty or guarantee. In addition, the bill modifies the
statute of limitations so that claim for a credit or refund of
the tread rubber or new tire taxes can be filed for a period of
one year after the warranty or guarantee adjustment is made.
Finally, the bill imposes the tax on tread rubber used in a
foreign country to recap or retread tires which have been export
from the United States and then reimported into the United State
The Treasury Department has no objection to the enactment
of H.R. 5103.
The credit or refund provisions for tread rubber are
intended to make the tax treatment of this product equivalent
to the tax treatment of new tires. Because the tread rubber
loses its identity when attached to a tire, it has not been
possible under present law to grant credit or refund of tread
rubber tax when the retreaded tire has been exported, sold to a
- 15 -
State or local government, or sold in any other transaction
for which a new tire may be sold tax free.
A tire which has been taxed in the United States can be
exported and reimported into the United States without payment
of the tire tax. If the tire has been retreaded, the tread
rubber tax is not due because the tread rubber is considered to
have lost its identity when attached to the retreaded tire.
United States retreaders located near Canada or Mexico have
complained that some United States dealers are shipping domestical
used tires to Canada or Mexico for retreading to take advantage
of this tax treatment. The bill would rectify this competitive
inequity.
The section granting a credit or refund of tax when the
price of a new tire is readjusted pursuant to a warranty or
guaranty is intended to codify procedures which have been
permitted for a number of years even though present law limits
the credit or refund of tax for warranty adjustments of products
subject to manufacturers excise taxes to cases where the tax is
an ad valorem tax. The bill would grant a credit or refund of
tax proportionate to the price adjustment made with the ultimate
consumer where the manufacturer's quarantee runs to the ultimate
consumer; and proportionate to the price adjustment made with
the immediate vendee where the manufacturer's guarantee runs
only to his immediate vendee. In addition, a new approach is
included in the bill whereby provision is made for the granting
of a credit or refund for warranty adjustments of an average
- 16 amount per tire based on some overall method (e.g., a sampling
method) rather than computation on a tire-by-tire basis. The
Ways and Means Committee report (H. Rep. No. 95-916) notes that
this procedure would not permit an adjustment in the excise tax
prior to the time the warranty or guarantee adjustment is made
(or deemed to have been made) to the ultimate consumer.
The extension of a credit or refund of the tread rubber
tax to cases where the retreaded tires are adjusted pursuant to
a warranty is consistent with the treatment of new tires.
Since the guarantee on a tire may last for the life of
the tire, a manufacturer could be prevented from obtaining
refund or credit of tax for a warranty adjustment by the fact
that section 6511 of the Code requires claims for overpayment
of tax to be filed within 3-years from the time the returns wer
filed or 2-years from the time the tax was paid, whichever
expires the later. Accordingly, the bill proposes to modify
the statute of limitations as indicated above as to allowance
for claims for refund or credit or overpayment of tire or tread
rubber taxes in the case of warranties.
Some private brand dealers have requested that where the
manufacturer's warranty or guarantee is extended only to his
immediate vendee there be deleted the requirement in the bill
that the prior granting of an adjustment to the ultimate
consumer is a prerequisite to the allowance of a credit or
refund of tax to the manufacturer or importer. Rulings under
- 17 -
present law have held that where the tire warranty runs only
from the manufacturer to his immediate vendee, the adjustment
by the manufacturer need only be made with his immediate vendee.
This interpretation is based on the general
rule for price readjustments in section 6416(b)(1) of the Code
which requires the manufacturer, or importer, to make an
adjustment with his immediate vendee to obtain a proportionate
credit or refund.of tax.
One way of retaining the general principle set forth in
the bill of requiring adjustment of tax to the ultimate consumer
before the manufacturer can claim credit or refund would be to
state in your committee report that where the private dealer's
warranty to the ultimate purchaser is as good or better than the
manufacturer's warranty to the dealer, it then will be assumed
that the required adjustment has been made to the ultimate
consumer when the immediate vendee makes his request for credit
or refund from the manufacturer.
The effective date specified in the bill is April 1, 1978.
This is the effective date of Part 1 of Revenue Ruling 76-423.
Part 1 of this ruling specifies that the credit or refund of
tax to the tire manufacturer for a warranty adjustment is to be
proportional to the reduction in the price of the replacement
tire that the manufacturer sells to his immediate vendee.
- 18 The tire industry's practice where the tire warranty runs from
the manufacturer to the ultimate consumer has been to take
credit or refund of tax based on the proportionate reduction
by the dealer in the price of the replacement tire to the
ultimate consumer even though the manufacturer may reduce the
price (exclusive of tax) of the replacement tire to the dealer
by less than the proportionate reduction to the consumer, or
perhaps not even reduce the price to the dealer at all. The
bill would give statutory sanction to this practice and the
April 1, 1978 effective date would insure that Part 1 of
Rev. Rul. 76-423 would not be effective for the period of time
between April 1, 1978 and the enactment of the bill.
- 19 10. H.R. 6635
The bill would amend the Second Liberty Bond Act to
allow the Secretary of the Treasury, with the approval of
the President, to increase the investment yield on outstandin
United States retirement plan bonds and individual retiremen
bonds for each interest accrual period beginning after
September 30, 1977, so that the investment yield on such bon
is consistent with the investment yield on Series E savings
bonds.
Treasury would support H.R. 6635 if it is amended
(1) to permit the interest rate on already issued retirement
bonds to be changed to match the interest rate on new
retirement bonds rather than to match the interest rate on
Series E savings bonds and (2) to change the effective date
to permit an increase in the investment yield for interest
accrual periods beginning after the date of enactment rather
than for periods beginning after September 30, 1977. The
bill will help to assure that the rate of return to holders
of retirement plan bonds and individual retirement bonds
is maintained at a level commensurate with the rate of
return on new retirement bonds. It will help maintain the
competitiveness of retirement plan bonds and individual
retirement bonds with other investment vehicles and, therefo
will assist the Treasury in the exercise of its borrowing
authority.
- 20 11. H.R. 8535
Under present law, the child care credit is not allowed
for amounts paid to a relative unless (a) neither the taxpayer
nor the taxpayer's spouse is entitled to a dependency personal
exemption deduction with respect to that relative, and (b) the
services provided by the relative constitute "employment"
within the meaning of the Social Security taxes definition.
The bill would allow the child care credit for amounts
paid for child care services performed by relatives of the
taxpayer whether or not such services constitute "employment"
within the meaning of the Social Security taxes definition of
that term, provided neither the taxpayer nor the taxpayer's,
spouse is entitled to a dependency personal exemption deduction
with respect to that relative. The child care credit will not
be allowed for amounts paid to a child (or stepchild) of the
taxpayer under age 19.
The Treasury Department does not oppose H.R. 8535.
- 21 -
12.
H.R. 8811
Under present law if a United States Tax Court judge
elects to come under the Tax Court retirement system, he is
required to make an irrevocable election which bars him from
ever receiving any benefits under the Civil Service retirement
system for any nonjudicial Federal service performed before
or after his election is made, even though he served as a Tax
Court judge for less than the minimum 10-year period required
to qualify for retired pay under the Tax Court retirement system.
The bill would amend section 7447 to allow a Tax Court
judge to revoke an election to receive retired pay under the
Tax Court retirement system at any time before the first day
on which retired pay would begin to accrue with respect to
that individual. The bill would also provide that no Civil
Service retirement credit would be allowed for any service
as a Tax Court judge, unless with respect to such service the
amount required by the Civil Service retirement laws has been
deposited, with interest, in the Civil Service Retirement and
Disability Fund.
The Treasury Department supports H.R. 8 811.
June, 1978
BIOGRAPHICAL NOTES
C. FRED BERGSTEN
ASSISTANT SECRETARY FOR INTERNATIONAL AFFAIRS
C. Fred Bergsten, 37, of Annandale, Va., signed the
oath of office as Assistant Secretary for International
Affairs on March 31, 1977, following confirmation March 29
by the Senate. He was nominated by President Carter on
February 7 and was Acting Assistant Secretary from the
outset of the Carter Administration.
Dr. Bergsten graduated magna cum laude in 1961 from
Central Methodist College in Missouri. He received M.A.,
M.A.L.D., and Ph.D. degrees from the Fletcher School of
Law and Diplomacy, where he majored in international
economics and international relations.
Dr. Bergsten served President Carter as an advisor
on international economics during the Presidential
campaign, and was in charge of all aspects of international
economic policy during the transition period. Shortly
after President Carter's inauguration, Dr. Bergsten
accompanied Vice President Mondale to all of the major
European capitals and Tokyo.
As Assistant Secretary for International Affairs,
Dr. Bergsten has responsibility for the formulation and
execution of a wide range of U.S. international economic
and financial policies, including U.S. participation in
such international development lending institutions as
the World Bank.
Dr. Bergsten was a Senior Fellow at the Brookings
Institution from 1972 until joining the Carter/Mondale
transition team and then the Department of the Treasury.
He was a Visiting Fellow at the Council on Foreign
Relations during 1971-72 and 1967-1969; Assistant for
International Economic Affairs to Dr. Henry A. Kissinger
at the National Security Council during 1969-1971; and
B-987
an International Economist at the Department of State
during 1963-1967.
- 2 An energetic and prolific writer, Dr. Bergsten is
the author or co-author of eight books and more than
sixty articles on a wide range of international economic
and monetary subjects. His The Dilemmas of the Dollar;
The Economics and Politics of U.S. International Monetary
Policy was published by the Council on Foreign Relations
in early 1976. His latest volume, American Multinationals
and American Interests. was published recently by the
Brookings Institution. Dr. Bergsten was also the chief
author of The Reform of International Institutions, a study
for the Trilateral Commission, an organization dedicated
to bringing about greater cooperation and new initiatives
in North America, Europe, and Japan.
Among his many honors, Dr. Bergsten is listed in
Who's Who in America and was named one of Time Magazine's
"200 Young American Leaders" in 1974. While at Brookings,
he was a frequent witness before Congressional committees,
testifying on such subjects as international monetary
reform, overall U.S. foreign economic policy, commodities,
trade, and international financial institutions.
Dr. Bergsten was born on April 23, 1941, in Brooklyn,
New York. He is married to Virginia Wood Bergsten. They
have a son, Mark David.
VtpartmentoftheTREASURY
HNGTGN,D.C. 20220
TELEPHONE 566-20*1
June 19, 1978
FOR IMMEDIATE RELEASE
RESULTS OF TREASURY'S WEEKLY BILL AUCTIONS
Tenders for S 2,200 million of 13-week Treasury bills and for $3,400 million
oi 26-veek Treasury bills, both series to be issued on June 22, 1978,
were accepted at the Federal Reserve Banks and Treasury today. The details are
as follows:
ANGE OF ACCEPTED
COMPETITIVE BIDS:
13-week bills
maturing September 21. 1978
Discount
Rate
Price
98.318
98.312
98.315
High
Low
Average
Tenders at t
Tenders at
_
. V- »S
. . C
—
6.654%
6.678%
6.666%
*s i. -L. <
w
N~ »%
^
scstcn
-«ev :crtc
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
-t. Louis
Minneapolis
Kansas City
Dallas
ia
n Francisco
treasury
TOTALS
6.86%
6.89%
6.87%
Discount Investment
Price
Rate
Rate 1/
96.351
7.218%
7.60%
96.342
96.346
7.236%
7.228%
7.61%
7.61%
e for the 13-week bills were allotted 22%
e for the 26-week bills were allotted 86%
v. • -
ID:
ation
Investment
Rate 1/
26-week bills
maturing December 21f 1978
r\. e c e i. v e >
$
16 190,000
3,534 ,455,000
17.,410,000
40 280,000
29 ,705,000
22 ,065,000
231 ,140,000
30 ,705,000
11 ,130,000
20 ,710,000
15 ,620,000
335 ,575,000
6,,620,000
$4,311,,605,000
TENDERS RECEIVED AND ACCEPTED
RESERVE DISTRICTS AND TREASURY:
cce^tea
16
968
17
27
21
20
38
17
5
18
15
26
190,000
900,000
410,000
220,000
780,000
090,000
840,000
005,000
130,000
640,000
620,000
625,000
620,000
$2,200 070,000a/
^eceivea
n.cceotev
$
$
50,005,000
4,761,210,000
5,945,000
41,540,000
12,835,000
51,480,000
229,540,000
25,880,000
12,070,000
22,635,000
6,215,000
242,100,000
4,640,000
$5,466,095,000
he public
includes $ 314,245,000 noncompetitive tenders :ro;
,b 1 i c
^/-"eludes $179,640,000 noncompetitive tenders fro: tpe
i-- bivalent coupon-issue vield.
B- 988
yi
25,005,000
3,187,300,000
5,445,000
26,540,000
8,695,000
18,930,000
28,300,000
12,880,000
5,070,000
20,735,000
6,215,000
50,610,000
4,640,000
$3,400,365,000b/
FOR IMMEDIATE RELEASE
EXPECTED AT 12:00 NOON, EDT
TUESDAY, JUNE 20, 1978
REMARKS BY THE HONORABLE C. FRED BERGSTEN
ASSISTANT SECRETARY OF THE TREASURY
FOR INTERNATIONAL AFFAIRS
BEFORE THE
FRENCH-AMERICAN CHAMBER OF COMMERCE
NEW YORK, NEW YORK
TRADE AND MONEY: THE NEED FOR PARALLEL PROGRESS
During the past fifteen years, we have all come to
appreciate the need for parallel efforts to improve the
international trade and monetary systems to better meet the
demands of our rapidly changing global economy.
Major strides have been made in reforming the
international monetary system, in large part due to the
efforts of the United States and France. Much remains
to be done to make the new monetary system work better,
and all nations have committed themselves to that effort.
It is now proceeding, in the International Monetary Fund
and elsewhere.
But progress in the trade area has been much slower.
The pending conclusion of the Multilateral Trade Negotiations
now provides an opportunity for the needed catchup. Meaningful agreements must be reached soon to preserve an adequate
B-989
- 2 -
basis for the continued expansion of world trade and investment
which has been a major ingredient of our postwar economic
prosperity.
France has frequently pointed to the importance of
parallel progress in monetary and trade relations.
Indeed,
such a view draws on a fundamental tenet of classical
economic theory:
that the maintenance of a monetary system
which promotes effective adjustment of payments imbalances
is a vital prerequisite for an open trading system.
In the absence of such monetary arrangements, the
competitive position of nations with overvalued exchange
rates is progressively eroded and political support for
open trade gives way to an ever larger circle of restrictive
measures.
Similarly, the economic structure of countries
with undervalued exchange rates becomes excessively skewed
toward exports —
provoking constant pressures on their
trading partners even long after the undervaluations have
disappeared, and generating strong domestic pressures
to retain an undervalued rate or to replace it with other
export aids of similar magnitude.
The Bretton Woods understanding, in the aftermath of
World War II, was designed to promote monetary stability
through the maintenance of relatively fixed rates of exchange.
Changes were to be made in par values only after it became
inescapably clear that a fundamental shift in economic
- 3 relationships had occurred —
suggesting that such changes
might come too late, even under the best of circumstances.
Even these changes were made with great difficulty, if
at all, and major disequilibria were permitted to develop.
For the United States, stability in exchange rates
during the 1960s came to mean an appreciating U.S. dollar
against the weighted average of other major currencies
despite increasing balance of payments difficulties.
Part of the problem lay with the unwillingness of
surplus countries to initiate the needed adjustment measures
from their side.
But a fundamental contradiction pervaded
the international economic policy of the United States:
it sought to lead the world toward freer trade, but made
little effort to lead the world toward a monetary system
which promoted effective payments adjustment.
Indeed, largely because of this policy contradiction,
the United States faced an ironic paradox„
In the early
1960s, unemployment was extremely high in the United States
but the country as a whole, including organized labor,
was largely supportive of a liberal trade policy.
Through
the 1960s, profits rose to record levels and unemployment
steadily declined to post-Korea lows —
but protectionist
pressures at home steadily increased, to a point where
the "Mills bill" nearly passed the Congress; in 1970 and
the Burke-Hartke bill became a serious matter for concern
in 1971 and 1972.
- *4 And when the United States decided in August 1971
that it wanted to adjust the exchange rate of the dollar,
partly in belated realization that such a step was crucial
to restore the prospects for a liberal trade policy, it
found that the international monetary system made such
action very difficult.
The United States was caught in
its own policy contradiction.
The reverse paradox has, to some extent, characterized
the 1970s.
In large part because adjustment measures had
been effectively carried out, and the international monetary
system reformed in the nick of time, the Trade Act of
1974 could authorize U.S. participation in the widest
ranging international trade negotiations in history despite
the existence at the time of its passage of the highest
rate of unemployment at home since the Great Depression.
Monetary progress permitted a resumption of trade progress.
Reform of the Monetary System
The Smithsonian agreement and the generalized float
of major currencies in 1973 represented the first major
steps in reforming the international monetary regime.
The subsequent agreements at Rambouillet and Jamaica paved
the way for the creation of a new monetary system based
on greater flexibility in exchange rate arrangements and
a broader emphasis on stability in underlying economic
and financial conditions.
- 5 The new exchange rate provisions give members wide
latitude in the choice of exchange rate practices best suited
to their needs, and can accommodate a wide variety of
exchange rate mechanisms — including freely or managed
floating rates, rates pegged to a currency or basket of
currencies, and the common margins arrangements of the EC
snake. Under the newly amended IMF Articles of Agreement,
each member undertakes a general obligation to direct its
economic policies toward orderly growth with reasonable
price stability, and a specific obligation to avoid
manipulating exchange rates either to prevent balance
of payments adjustment or to gain unfair competitive advantage.
The IMF is given responsibility for conducting continuing
surveillance over the operations of the international
monetary system and members1 compliance with their obligations
regarding exchange rate policies.
This is the heart of the new system. It represents
the potential both for a stronger IMF, and for a more
effective and symmetrical operation of the balance of
payments adjustment process. To date, the IMF's ability
to influence national policies has been limited for the most
part to those members borrowing in the IMF's credit
tranches. The new provisions on IMF surveillance provide the
potential for IMF influence on the policies of all members,
in surplus and deficit alike, as they bear on the operation
of the international adjustment process.
- 6 The task before us now is to make this system work.
This will require active cooperation among all the major
nations.
The IMF has been given the job of insuring that
the obligations are respected.
We intend to do what we
can to support the IMF in that endeavor —
both in our
contacts with other nations and in our policies at home.
Improving the Trading System
The last round of international trade negotiations
the Kennedy Round in the 1960s —
—
made substantial progress
in reducing tariffs, but could not have been expected to
deal effectively with the primary trade problems of the
1970s and 1980s.
Today, trade reform lags monetary reform.
Our immediate task is to secure a meaningful package
of agreements in the Multilateral Trade Negotiations in
Geneva, the "Tokyo Round."
This package should further
reduce tariffs, but must break new ground in reducing
non-tariff barriers to trade and addressing the problems
created by excessive government intervention.
It must
do so if our new monetary system, and indeed the world
economy as a whole, is to continue to prosper —
for trade
interventions beget monetary interventions, just as surely
as monetary interventions foster trade interventions.
The objectives of the United States in these trade
negotiations are quite specific:
- 7 —
The successful negotiation of a new international
code to discipline the use of subsidies which
distort international trade.
This is a prerequisite
for U.S. adherence to a new package of trade
agreements.
—
Improved market access for U.S. agricultural products.
—
Reductions in tariffs by an average of 40 percent,
with minimal exceptions, to be phased in over
a period of eight to ten years.
— Agreement on acceptable "safeguard" measures which
may be taken by governments in emergency situations.
This agreement should clearly limit the circumstances
in which governments can impose restraints on trade,
i.e., it should provide "safeguards against safeguards."
— A new international understanding on the use of
government procurement measures, with the broadest
possible sectoral coverage and maximum transparency
of contract offers and awards.
— A new mechanism for dispute settlement which will
assure both timely and meaningful resolution of
trade conflicts in all of these areas.
— Special and differential treatment for the developing
nations, supplemented where feasible with their offering
reciprocal commitments on tariffs or market access
for specific products and an acceptance of greater
- 8 responsiblity —
in particular, among the advanced
developing nations —
for maintaining an open
trading system.
The Trade Effects of Government Intervention
The key to a successful MTN, and more broadly to the
future of an open trading system, lies in finding new
understandings on the use of subsidies and other forms
of government intervention at the microeconomic level.
This is an area in which one must move carefully and
delicately.
Many of the new devices are not trade
measures in the traditional sense; they are not applied
at the national border to goods flowing into and out of
the country.
Their effects on trade may be direct and
profound but, because such measures are applied internally,
some governments tend to think of them as "domestic" in
nature and therefore beyond the reach of any international
agreement.
A more basic difficulty stems from the fact that
modern representative governments often feel that they
must assume responsibility for trying to help some disadvantaged or unlucky sector of the national economy.
When governments succumb to that pressure, they are often
tempted to deal with the problem by exporting it —
by
laying the burden of the adjustment on foreigners.
But
- 9 with national economies now linked so closely to one
another, the consequences of strategies of this sort are
more visible than ever — inviting the kind of retaliation
that we all have a stake in avoiding. We are particularly
concerned about the growing involvement of European governments
in assisting domestic industries while these same governments
insist that we keep our own doors open to European goods.
Two principles must be applied in these situations.
First, adjustment ought to take place through internal
national measures rather than through trade distorting
devices. Labor must be retrained, obsolete equipment
scrapped and other difficult but necessary measures taken
at home to adjust for loss in competitiveness abroadSecond, if trade must be affected in order to cope with
these adjustment needs, then the restrictions must be
tailored to international rules and subject to careful
international oversight.
We strongly support the establishment of international
guidelines in this area as a basis for avoiding future
conflicts. The United States places top priority on
reaching an agreement on subsidies and countervailing
duties in the Multilateral Trade Negotiations which would:
— Reinforce the commitment already accepted by
most industrial countries not to use export
subsidies for industrial products.
- 10- —
Create new international disciplines to guard
against the disguised protection of domestic
markets through internal or production subsidies,
including improved discipline over subsidized
competition (particularly in agricultural products)
in third markets.
—
Recognize that countervailing duties should
as a general rule be applied only when a subsidy
threatens or causes injury to a domestic industry.
—
However, in cases where there is a specific
commitment not to use certain subsidies, permit
countries to take quick counteraction if that
commitment is violated.
—
Effectively implement the rules on both subsidies
and countervailing duties via strengthened provisions
on dispute resolution.
—
Include the developing countries, but provide
flexible means for them to assume the new
responsibilities corresponding to their position
on the development ladder.
The advanced developing
countries should accept increased obligations as
their industries become internationally competitive,
perhaps through an initial freeze on their existing
export subsidies and a commitment to phase them out
over a suitable period of time.
- 11 Export Credits
Officially supported export credits will not be a
major topic in the new code because they are already
covered by international understandings. Despite these
understandings, however, in recent months we have observed
striking examples of government intervention in international trade finance.
For instance, we witnessed a triple derogation by
the British (in respect to maturity, local cost financing
and cash down payment requirements) of the OECD guidelines
on export credits in the sale of Rolls Royce engines to
Pan American. The recent Airbus-Eastern Airlines financing
package may have contained some questionable elements in
respect of excessively long maturities and a free sixmonth leasing period. Thus, beyond negotiation of the new
codes, the international trading system requires the
active support of national governments to curb destructive
practices in official export financing activities.
The recently concluded International Arrangement on
Export Credits of the OECD is desirable and useful within i
limits, but must be strengthened and expanded to stem
predatory official export credit competition and other
official inducements which otherwise can only lead to
an export credit war. Indeed, our Congress is already
calling for new negotiations of this type — and for
- 12 stepped-up activity by our own Export-Import Bank to counter
such competition.
Further improvement in the International
Arrangement is a necessary complement to the MTN package
to bring the world trading rules into conformity with the
needs and practices of the late 1970s and 1980s.
Conclusion
The further reduction of tariff and non-tariff barriers
in the MTN; our success in achieving new codes on subsidies
and countervailing duties, safeguards, government procurement and export credits; and our ability to create new
mechanisms for dispute settlement will do much to provide
a sound basis for international trade cooperation in the
years ahead.
We recognize that the problems of government
intervention will not be definitively resolved, and that
cooperation —
indeed, probably negotiation as well
—
must remain an ongoing process in order to assure that
the new codes and agreements work effectively.
Our challenge
in the next few months is to take the crucial initial
steps to set the process of reform in motion and to seize
the opportunity afforded by the MTN to help create a more
responsible, flexible trading system for the future.
The parallelism between monetary and trade relations
in fact requires that reform in both areas proceed apace.
We cannot have a smoothly functioning international monetary
system if nations insist on avoiding needed domestic
- 13 adjustment to basic structural changes, and instead impose
import restraints and export aids to boost their competitive
positions at the expense of others. Likewise, we cannot
expect that a meaningful MTN and real trade reform can
be sustained without the continuing evolution of an effective
international monetary system.
We must join hands in a common effort in both areas
if either is to work properly, for the benefit of all
nations and peoples. We have already made a good deal of
progress in the monetary area. We are committed to making
the new monetary system work better. We must now commit
ourselves to make equal progress in trade, and see that
agreements are reached in the MTN which set us well on
the road to lasting trade reform.
oOo
Department of thefREASURY
WASHINGTON, D.C. 20220
TELEPHONE 588-2041
, "" • •-.
FOR RELEASE AT 4:00 P.M.
June 19, 1978
TREASURY TO AUCTION $1,750 MILLION OF 15-YEAR 1-MONTH BONDS
The Department of the Treasury will auction $1,750
million of 15-year 1-month bonds to raise new cash!
Additional amounts of the bonds may be issued to Federal
Reserve Banks as agents of foreignand international
monetary authorities at ...the average price of accepted
competitive tenders.
accepted
e i: s about tne
°ew security are given in the
tt u ^\ !"
attached highlights of the offering and in the official
ottering circular.
oOo
Attachment
B-990
HIGHLIGHTS OF TREASURY
OFFERING TO THE PUBLIC
OF 15-YEAR 1-MONTH BONDS
TO BE ISSUED JULY 11, 1978
Amount Offered;
To the public
Description of Security:
Term and type of security
Series and CUSIP designation
Maturity date "August 15, 1993
Call date. . .
,
Interest coupon rate
June 19, 1978
$1,750 million
15-year 1-month bonds
Bonds of 1993
(CUSIP No. 912810 CB 2)
No provision
To be determined based on
the average of accepted bids
Investment yield.' - To be determined at auction
Premium or discount
To be determined after auction
Interest payment dates February 15 and August 15
(first payment on February 15,
1979)
Minimum denomination available
$1,000
Terms of Sale;
Method of sale
Yield auction
Accrued interest payable by
investor
None
Preferred allotment
Noncompetitive bid for
$1,000,000 or less
Deposit requirement 5% of face amount
Deposit guarantee by designated
institutions
Acceptable
Key Dates;
Deadline for receipt of tenders
Wednesday, June 28, 1978,
by 1:30 p.m., EDST
Settlement date (final payment due)
a) cash or Federal funds
Tuesday, July 11, 1978
b) check drawn on bank
within FRB district where
submitted
Friday, July 7, 1978
c) check drawn on bank outside
FRB district where
submitted
Thursday, July 6, 1978
Delivery date for coupon securities. Friday, July 14, 1978
STATEMENT BY THE HONORABLE C. FRED BERGSTEN
ASSISTANT SECRETARY OF THE TREASURY
FOR INTERNATIONAL AFFAIRS
BEFORE THE
SUBCOMMITTEE ON FAMILY FARMS, RURAL DEVELOPMENT,
AND SPECIAL STUDIES
OF THE
HOUSE COMMITTEE ON AGRICULTURE
Mr. Chairman, I welcome the opportunity to testify
before this Subcommittee on the subject of foreign
investment in U.S. farmland. The subject is one part
of the overall question of foreign investment in the
United States. Thus, I would like to lead off by outlining the Administration's basic policy on foreign
investment.
Shortly after taking office, this Administration
undertook a review of U.S. policy on foreign investment.
In July 1977 the Administration issued a statement which
confirmed the long-standing U.S. commitment to an open
international economic system. Specifically, the statement said: "The fundamental policy of the U.S. Government
toward international investment is to neither promote nor
discourage inward or outward investment flows or activities."
Therefore, the Government "should normally avoid measures
which would give special incentives or disincentives to
investment flows or activities and should not normally
B-991
- 2 intervene in the activities of individual companies
regarding international investment. Whenever such
measures are under consideration, the burden of proof
is on those advocating intervention to demonstrate that
it would be beneficial to the national interest."
We are aware, of course, that certain exceptional
investments might not be consistent with the national
interest. For this reason, regarding inward investment
flows, the Administration continued the procedures
established in 1975 under Executive Order 11858 for the
Committee on Foreign Investment in the United States to
"review investments in the United States which in the
judgment of the Committee might have major implications
for the U.S. national interest." As Assistant Secretary
of the Treasury for International Affairs, I chair that
Committee under the terms of E.O. 11858.
One important feature of these procedures is a
provision for advance consultations with foreign governments on investments in the United States. Under this
procedure, foreign governments have been requested to
consult with the U.S. Government on any significant
direct investments which they might be contemplating
making in the United States. If the Committee concluded
- 3 that a particular investment would be contrary to the
national interest, the foreign government involved would
be requested to refrain from making the investment or to
modify it in an appropriate manner.
While this procedure
was established primarily to review major investments by
foreign governments, the Committee may also review any
major investments here by foreign private parties if those
investments, appear to have major implications for the
national interest.
The members of the Committee are kept informed on
investments in the United States by the Office of Foreign
Investment in the United States, which was established in
the Department of Commerce by the same Executive Order.
Mr. Berger, who heads that Office, will testify later on
this operation.
As to foreign investment in U.S. farmland, you are
well aware that the available data are quite sketchy.
Most
farmland investments involve smaller order of magnitude
than industrial plants, and therefore do not attract the
same degree of public notice.
A representative from the
Department of Agriculture is testifying on that Department's
plans to improve our data in this area.
- 4 In the meantime, the Administration believes that
its policy of not discouraging foreign investment in
general applies to foreign investment in U.S. farmland.
At a meeting of the Committee on Foreign Investment in
the United States held last week it was unanimously agreed
that there was no basis at present for a departure from our
basic policy in the case of farmland.
Nevertheless, there has quite understandably been a
good deal of concern expressed about the sharp rise in the
price of farmland. This phenomenon is attributed in part
to an increasing demand for U.S. farmland as investments by
persons who are not directly involved in farming. The
vast majority of absentee farmland owners are Americans;
some are foreigners, though the very incomplete data now
available suggest that this amount is no more than one
percent of total land ownership in this country and much
of this ownership is not of recent origin.
Whether purchases by absentee owners have any significant effect on farmland prices is certainly a proper subject
for examination. However, we see no basis at this point
for differentiating between persons who may be absentee
land owners on the basis of their nationality. The economic
impact of land purchases does not vary with the geographic
residence of the purchaser.
- 5 There are two factors which are different for foreigners
buying land in the United States as compared to U.S. residents.
First, foreigners are subject to different tax laws.
foreigners deal in a foreign currency —
buying and selling U.S. land.
Second,
the dollar —
when
Neither of these factors,
however, gives foreigners any inherent advantage over
Americans in buying land here.
The tax considerations involved are rather complex,
and turn on the tax laws of the foreigner's residence as
well as U.S. tax laws.
I have an addendum to my statement
which discusses these considerations.
The upshot of this
discussion is that whether or not a foreigner is better
or worse off from a tax standpoint than an American when
buying farmland depends on the particular circumstances of
the two individuals.
I want to emphasize, however, that there is no necessary
advantage to foreigners merely because profits from sales
of U.S. land are not subject to the U.S. capital gains tax.
Foreigners subject to the tax laws of Canada, Germany,
France, Japan and the United Kingdom, which are reportedly
major sources of foreign demand for U.S. farmland, are
subject to tax in those countries on capital gains they may
derive in the United States and for some at least their tax
result may not be too different from an American's.
Also
in cases where foreigners are not subject to capital gains
- 6 tax, neither are they able to deduct capital losses resulting
from land sales as U.S. residents can.
In regard to the foreign currency aspect, it is
sometimes said that foreigners have an advantage over
Americans in that they can buy land with "cheap dollars".
But the fact that the mark and the yen will buy
more dollars today than in some previous period merely
means that Germans and Japanese have more purchasing power
in dollars than previously — whereas Canadian and British
citizens, because of the weakening of their currencies,
have less. Even residents of countries whose currencies
have strengthened do not have an absolute advantage over
Americans. In fact, in a world of floating exchange rates,
having to deal in a foreign currency is an additional risk
factor for foreigners buying land here, a risk which
American land purchasers do not face.
In addition, it should be noted that foreign investment
in the United States reduces our balance of payments deficit
and strengthens the dollar. Direct investment of a longer
term nature is particularly welcome in this respect. It
represents a constructive means of financing the sizable
current account deficit which we are now running, and
- 7 the current account surpluses of foreign countries.
Mr. Chairman, you raised several specific questions
about foreign investment in farmland in your letter to
Secretary Blumenthal. In response to your questions on the
economic impact of this investment, as I have already
indicated, I see no reason to believe that it essentially
differs from the impact of investment in farmland by
Americans except for its effect on our balance of payments.
You also asked whether restrictions on foreign
investment would be detrimental to our international
interests. They key point is that such restrictions
would be detrimental to our national interests. The main
reason that this and previous Administrations have followed
a neutral policy on foreign investment is that the policy
works in the best interests of the U.S. economy. The
broader the amount of participation in any market, the
greater the competition in and efficiency of the market.
To exclude a certain sector of participants in the market
purely on the basis of their nationality would have no
economic rationale. If we restrict the ability of foreigners
to invest in the United States, we also restrict the right
of Americans to dispose of their property — for no apparent
purpose — and we would also run a risk of retaliation against
the sizable stock of American investments abroad.
- 8 In summary, Mr. Chairman, unless it can be demonstrated that the national interest is adversely affected
by foreign investments in U.S. land, there appears to
be no basis for treating farmland purchases by foreigners
any different than farmland purchases by Americans. The
traditional U.S. policy of neutrality toward foreign
investment, both inward and outward, should apply here
as well.
TAXATION OF INCOME FROM FOREIGN INVESTMENT IN U.S.
Under U.S. tax laws, resident aliens generally are
taxed on their income from all sources, both within and
outside the United States, in the same manner as U.S.
citizens. However, non-resident aliens normally are
taxed only on their income from sources within the United
States. Special rules apply to the taxing of the income
of non-resident aliens, depending on whether such income
is derived from passive investments or from the conduct
of a business.
In considering how the provisions of the Internal
Revenue Code apply to foreign investments in U.S. farmland,
it is necessary to consider the legal identity of the
investor and the form of the investment. The foreign
investor could either be a foreign corporation or an
individual. The investment could be in the form of
stock in a U.S. corporation, which in turn owns the
farmland, or a direct purchase by the foreign investor.
In the latter case it may be presumed that the U.S. farm
will be operated as a branch of the foreign corporation
or, in the case of the foreign individual, as a business
with a U.S. manager.
- 2 In the
case of an indirect investment in farmland
through a U.S. corporation, the farm income will first be
subject to the U.S. corporate income tax. Distributions
out of profits to non-resident aliens will be subject to
a 30 percent withholding tax unless reduced through a
bilateral income tax convention, which usually provides
for a rate of 15 percent. This income will then be
subject to the tax laws in the investor's country of
residence. It is worth noting that major capital
exporting countries such as Canada, Germany, France, 1/
Japan and the U.K. tax the worldwide income of their
residents. The tax laws of these, and most other
countries, allow residents to take a credit for U.S.
withholding tax against their domestic tax liability.
In the case of direct investments, foreign corporations with U.S. source income must file special tax returns
(1120 F) with the IRS, and are subject to the same rate
schedule as are U.S. corporations. Non-resident alien
individuals with income effectively connected with the
conduct of a trade or business are required to file a form
1040 NR even if the gross amount of income is less than $750.
An investment in a U.S. farm would be considered a trade
or a business. This income would be subject to the same
1/ French corporations, however, are in principle not
subject to taxation on foreign source income.
- 3 tax rate schedules as are applicable to U.S. taxpayers.
Again, when the funds are transmitted abroad they will be
subject to the tax laws in the investor's country of
residence.
Non-resident aliens not present in the United States
for at least 183 days during the taxable year are not
subject to U.S. tax on gains derived from the sale or
exchange of capital assets within the United States.
This exemption from taxation applies to all capital assets,
however, not just farmland. Whether this constitutes
an advantage to foreigners will depend on how they are
taxed in their home countries. Canada, Germany, France,
Japan and the U.K. tax the worldwide income of their
residents including capital gains. To determine whether
residents of these countries are subject to lighter or
heavier taxes than Americans would require detailed comparisons
of the various tax laws. It should also be noted that,
in cases where a foreigner is not subject to a capital
gains tax, neither is he able to deduct a capital loss
from ordinary income as American taxpayers can.
A common problem in determining the tax liability of
business enterprises which operate in more than one tax
- 4 jurisdiction involves "artificial transfer pricing."
Under
this practice business enterprises strive to minimize their
tax liability by attributing as much of their income as
possible to countries with low tax rates. To do this, they
tend to sell products produced by their affiliates in high
tax countries to their affiliates in low tax countries at
artificially low prices rather than the "arm's-length"
prices that would be charged to unaffiliated persons.
Tax authorities in all countries have difficulty in
preventing these practices because the products involved
are frequently unique and the arm's-length or market price
is difficult to establish. In the case of foreign-owned
U.S. companies engaged in farming, however, the problem
is minimal because agricultural products have a wide
market and there is little difficulty in establishing an
arm's-length price.
In summary, few generalizations can be made as to
whether foreigners have a tax advantage or disadvantage
vis-a-vis Americans in buying, operating or selling U.S.
farmland. The situation will vary in accordance with the
individual circumstances of the taxpayers involved.
FOR RELEASE ON DELIVERY
EXPECTED AT 11:00 A.M.
JUNE 21, 1978
STATEMENT OF THE HONORABLE R O B E R T H. MUNDHEIM
GENERAL COUNSEL
U . S . DEPARTMENT OF THE T R E A S U R Y
BEFORE THE
SUBCOMMITTEE ON FINANCIAL INSTITUTIONS
COMMITTEE ON BANKING, H O U S I N G , A N D URBAN AFFAIRS
UNITED STATES SENATE
The International Banking Act of 1978 (H.R. 10899)
Mr. Chairman and Members of this distinguished Subcommittee.
I appreciate the opportunity to testify on behalf of the
Administration on H.R. 1 0 8 9 9 , the International Banking Act of
1978. The Administration generally endorsed this legislation
in the House of R e p r e s e n t a t i v e s last y e a r , and as passed by the
House it incorporates a number of changes that we suggested.
Subject to two m o d i f i c a t i o n s that I w i l l shortly d i s c u s s , we
continue to favor enactment of the International Banking Act.
The Growth of International
Banking
In view of the increasing importance of foreign bank
operations in the United S t a t e s , we a g r e e that Congress
should act in this area n o w . In our testimony before the
House Banking Committee on this l e g i s l a t i o n , w e noted that
foreign bank o p e r a t i o n s , although still small in relation to
to the domestic banking industry, h a v e been growing in recent
years. Total assets of the United States b r a n c h e s , agencies
an
<3 commercial lending companies of foreign banks have more
than tripled during the past five y e a r s , increasing to $66
B-992
- 2 -
billion at the end of February 1978, which represents roughly
6 percent of the total assets of all commercial banking operations in the United States.
The growing operations of foreign banks in our economy is
a natural outgrowth of expanding international trade and the
increasing activity of foreign businesses in the United.States.
Just as American banks began operating abroad to serve their
domestic customers, foreign banks are opening offices in the
United States to serve their customers here. Foreign banks contribute to competition in our domestic banking industry and
facilitate increased international trade and finance.
In determining a national policy, we must also keep in
mind that our regulation of foreign banks may affect foreign
government treatment of United States banks and other financial
institutions operating overseas. The total assets of foreign
branches of American banks at the end of February 1978 were
$257 billion, almost four times the $66 billion amount just
mentioned.
The Principle of National Treatment
The United States endeavors to offer an hospitable climate
for foreign investment by following a policy of "national treatment", under which as few distinctions as possible are made
between the treatment of businesses of foreign investors and the
same business conducted by United States nationals. In line
with this general policy, we believe that foreign banks doing
business here should be supervised under the same rules and
administrative structure as domestic banks; they should be
afforded comparable competitive opportunities and be subject to
comparable restraints.
The national treatment concept is superior, in our opinion,
to the alternative concept of "reciprocity" which some foreign
banks would like us to adopt. Under a policy of reciprocity,
we would allow a foreign bank to engage in the United States in
all those activities in which American banks are permitted to
engage in the home country of the foreign bank, even though we
do not permit domestic banks to conduct such activities here.
Since countries differ on which activities banks may engage in,
- 3 -
the United States under a policy of reciprocity would have to
administer different sets of rules for various foreign banks
operating in this country, dependi-ng on their nationality. This
could be an administrative nightmare. Furthermore, the advantages we would have to afford foreign banks under a policy of
reciprocity - such as the ability to engage in interstate
branching, and a broad range of nonbanking activities - would
result in unfair competitive pressures on domestic banks.
Purpose of the Act
The Administration supports the International Banking Act
because, for the most part, it furthers the national treatment
theme by treating foreign bank operations like operations of
domestic banks. It brings branches and agencies of foreign
banks within the dual banking system and establishes a framework
for applying Federal banking policy to them. In those two sections where the bill departs from equal treatment of foreign and
domestic banks, interstate branching and Treasury Guidelines,
we recommend changes. Before discussing those changes, I should
like to briefly reiterate our support for several of the bill's
other provisions.
Extension of the Dual Banking System
Our existing laws and regulations covering foreign banks do
not fully reflect the policy of national treatment. On the one
hand, they deny foreign banks certain banking opportunities. For
example, foreign banks are deterred from establishing national
banks. In addition, our laws permit foreign banks to operate
branches or agencies, but these operations are unable to obtain
Federal deposit insurance.
On the other hand, there is no Federal regulation or supervision of foreign bank branches and agencies, even though almost
all domestic banks come under the regulation of either the
Comptroller of the Currency, the Federal Reserve Board, or the
Federal Deposit Insurance Corporation.
::'
- 4 -
This legislation will, for the first time, enable the
Comptroller of the Currency to authorize Federal branches and
agencies of foreign banks. It grants those institutions powers
similar to those of national banks and permits them to operate
in states where state law does not prohibit foreign bank
branches and agencies, and where the particular foreign bank does
not already have a state-approved facility.
• In so doing, it extends Federal regulatory involvement into
an important segment of banking activity in the United States
presently regulated solely by the states. Foreign banks would
then have the option of choosing between a Federal and a state
regulatory framework. Such a choice would offer foreign institutions the same Federal and state alternatives now afforded their
domestic counterparts.
Federal Deposit Insurance
We believe this legislation satisfactorily addresses the
question of Federal deposit insurance for foreign bank branches.
Currently, foreign bank branches do not qualify for FDIC insurance. The bill changes this policy in a manner that gives effect
to the principle of national treatment: insurance is required
for Federal branches and for state branches in those states
where domestic state banks are required to obtain deposit insurance. However, we are inclined to support the suggestions of
Chairman Miller that the coverage available should include
deposits of foreign persons, not just United States citizens
and residents.
Nonbanking Activities
Section 8 of the bill deals with the nonbanking activities
of foreign banks in the United States. It generally subjects
foreign banks maintaining United States branches or agencies
to the restrictions on nonbanking activities of the Bank Holding
Company Act of 1956, as amended. United States subsidiaries of
foreign banks already come under the Bank Holding Company Act.
- 5 -
Under the Bank Holding Company Act prior Federal Reserve
Board approval would be required before a foreign bank could
engage in new nonbanking activities. Permitted activities
for foreign banks would be the same as those authorized by
the Board for domestic banks. Nonbanking activities of the
foreign parent bank principally outside the United States would
be exempt. In addition, all of a foreign bank's nonbanking activities engaged in on May 23, 1977 would be permanently grandfathered .
The focus of much debate in this area has been the activities of United States securities affiliates of foreign banks.
Several such organizations engage in securities underwriting
activities which are prohibited to American banks or their
affiliates. This bill would prevent foreign banks engaged in
commercial banking in the United States from also engaging in
the securities business here, either directly or through affiliates. However, existing securities operations would be permanently grandfathered. Such a grandfather provision is reasonable and appropriate, because these activities were undertaken
in accordance with the existing legal framework and they have
made a useful contribution to the capital of securities firms
and to the viability of regional stock exchanges.
Proposed Changes in the Bill
Now, Mr. Chairman, let me turn to two portions of the
International Banking Act that we believe warrant further
change.
Interstate Branching
Except under limited circumstances, states do not permit
branch operations by a bank chartered in another state. Similarly, interstate branching is not authorized for national banks
because of the provisions of the McFadden Act. However, several
states permit — indeed encourage — foreign bank branches,
e
ven if the same foreign bank has branches in other states.
- 6 The International Banking Act would continue the ability
of foreign banks to have interstate branches and would extend
this ability even to Federal branches so long as expressly
permitted by the state involved. It is in this respect
that we disagree with the provisions of the bill. Consistent
with our espousal of equal treatment for domestic and foreign
banks, we believe that section 5 should be amended to make
Federal foreign branches subject to the branching rules applicable to domestic national banks, and to make state foreign
branches subject to the branching rules applicable to domestic
state banks. In order to minimize disruption of existing banking services, we would favor permanent grandfathering of foreign
interstate operations engaged in on May 23, 1977.
Interstate branching raises a fundamental competitive
question with long-term implications for banking structure
in the United States. Technological developments, for example,
in the area of electronic funds transfer have increased the
urgency of answering that question. If because of the absence
of prohibitory legislation, foreign banks develop sizable
interstate networks, it may be difficult in the future
to decide to terminate those operations, or alternatively not
to grant domestic banks the same privilege. We would prefer
that for the future branching by foreign banks be placed
on the same competitive footing as that of domestic banks.
The desirability of interstate branching should be judged
on its own merits, with the decision equally applicable to
foreign and and
domestic
guidelines
Review banks.
The Administration favors deletion of section 9 in its
entirety. Section 9 is a carry-over from the concern expressed
in some quarters several years ago that the Federal Government
should review every potential foreign direct investment to be
roade in the United States on a case-by-case basis to assure that
ft was not injurious to the national interest. Thorough
investment-policy review concluded that the Federal government
should not intervene in private business transactions unless
there is a clear public purpose to be served. The mere fact that
foreign persons are involved is not a sufficient reason for such
intervention.
- 7 -
Section 9 would require a new and, we believe, inappropriate
Treasury and Federal role in the establishment of foreign bank
operations in the United States: (1) The Secretary of the
Treasury would be required to issue guidelines on foreign bank
operations in the United States to assist bank regulators acting
upon foreign bank applications; (2) state and Federal banking
authorities would be required to solicit the views of the Secretaries of Treasury and State and of the Federal Reserve Board;
and (3) state and Federal banking authorities would be prohibited
from approving a foreign bank's application unless the foreign
bank agreed in advance to conduct all its United States operations
in full compliance with Federal and state anti-discrimination
laws that apply to domestic banks.
We strongly recommend that this remnant of attempts at
Federal screening be eliminated from the bill, for several
reasons:
(1) it discriminates insofar as it applies to foreign-owned
banks only;
(2) it could set an unfortunate precedent for establishing
similar procedures for foreign investment in other areas of our
economy;
(3) it could induce other countries to introduce or expand
restrictions on American financial activities and investments
abroad; and
(4) it appears to contradict certain national treatment
provisions in our foreign treaties.
We are particularly concerned that Treasury, in preparing
guidelines, is required to take account of the treatment afforded
United States banks abroad. As I previously stated, we vigorously object to a policy of reciprocity. It could result in a
reduction of permissible international banking activities,
including those of United States banks abroad, and also create
an administrative nightmare in enforcing different sets of
rules for different foreign banks operating in this country.
- -8 Furthermore, we believe the provision in section 9 requiring a specific pledge to obey domestic anti-discrimination laws
before a foreign banking application can be approved is unnecessary and unwise. All domestic and foreign banking operations in
the United States already are subject to our anti-discrimination
laws.
Conclusion
Thank you, Mr. Chairman, for allowing us to testify on
this important bill. We look forward to working with the
Subcommittee as further questions arise.
FOR RELEASE AT 4:00 P.M.
June 20, 1978
TREASURY'S WEEKLY BILL OFFERING
The Department of the Treasury, by this public notice,
invites tenders for two series of Treasury bills totaling
approximately $5,700 million, to be issued June 29, 1978.
This offering will not provide new cash for the Treasury as the
maturing bills are outstanding in the amount of $5,692 million.
The two series offered are as follows:
91-day bills (to maturity date) for approximately $2,300
million, representing an additional amount of bills dated
March 30, 1978,
and to mature September 28, 1978 (CUSIP No.
912793 T5 5)# originally issued in the amount of $3,403 million,
the additional and original bills to be freely interchangeable.
182-day bills for approximately $3,400 million to be dated
June 29, 1978,
and to mature December 28, 1978 (CUSIP No.
912793 V2 9) .
Both series of bills will be issued for cash and in
exchange for Treasury bills maturing June 29, 1978.
Federal Reserve Banks, for themselves and as agents of foreign
and international monetary authorities, presently hold $2,785
million of the maturing bills. These accounts may exchange bills
they hold for the bills now being offered at the weighted average
prices of accepted competitive tenders.
The bills will be issued on a discount basis under competitive
and noncompetitive bidding, and at maturity their par amount will
be payable without interest. Except for definitive bills in the
$100,000 denomination, which will be available only to investors
who are able to show that they are required by law or regulation
to hold securities in physical form, both series of bills will be
issued entirely in book-entry form in a minimum amount of $10,000
and in any higher $5,000 multiple, on the records either of the
Federal Reserve Banks and Branches, or of the Department of the
Treasury.
Tenders will be received at Federal Reserve Banks and
Branches and at the Bureau of the Public Debt, Washington,
D
« C
20226, up to 1:30 p.m., Eastern Daylight Saving time,
Monday, June 26, 1978.
Form PD 4632-2 (for 26-week
series) or Form PD 4632-3 (for 13-week series) should be used
to submit tenders for bills to be maintained on the book-entry
records of the Department of the Treasury.
P ~ 993
-2Each tender must be for a minimum of $10,000. Tenders
over $10,000 must be in multiples of $5,000. In the case of
competitive tenders the price offered must be expressed on
the basis of 100, with not more than three decimals, e.g.,
99.925. Fractions may not be used.
Banking institutions and dealers who make primary
markets in Government securities and report daily to the
Federal Reserve Bank of New York their positions in and
borrowings on such securities may submit tenders for account
of customers, if the names of the customers and the amount
for each customer are furnished. Others are only permitted
to submit tenders for their own account.
Payment for the full par amount of the bills applied for
must accompany all tenders submitted for bills to be maintained
on the book-entry records of the Department of the Treasury. A
cash adjustment will be made on all accepted tenders for the
difference between the par payment submitted and the actual
issue price as determined in the auction.
No deposit need accompany tenders from incorporated banks
and trust companies and from responsible and recognized dealers
in investment securities for bills to be maintained on the
book-entry records of Federal Reserve Banks and Branches, or for
bills issued in bearer form, where authorized. A deposit of 2
percent of the par amount of the bills applied for must
accompany tenders for such bills from others, unless an express
guaranty of payment by an incorporated bank or trust company
accompanies the tenders.
Public announcement will be made by the Department of the
Treasury of the amount and price range of accepted bids.
Competitive bidders will be advised of the acceptance or
rejection of their tenders. The Secretary of the Treasury
expressly reserves the right to accept or reject any or all
tenders, in whole or in part, and the Secretary's action
shall be final. Subject to these reservations, noncompetitive
tenders for each issue for $500,000 or less without stated price
from any one bidder will be accepted in full at the weighted
average price (in three decimals) of accepted competitive bids
for the respective issues.
Settlement for accepted tenders for bills to be maintained on the book-entry records of Federal Reserve Banks
and Branches, and bills issued in bearer form must be made
or completed at the Federal Reserve Bank or Branch or at the
Bureau of the Public Debt on June 29, 1978,
in cash or
other immediately available funds or in Treasury bills maturing
June 29, 1978.
Cash adjustments will be made for
differences between the par value of the maturing bills
accepted in exchange and the issue price of the new bills.
-3Under Sections 454(b) and 1221(5) of the Internal Revenue
Code of 1954 the amount of discount at which these bills are
sold is considered to accrue when the bills are sold, redeemed
or otherwise disposed of, and the bills are excluded from
consideration as capital assets. Accordingly, the owner of these
bills (other than life insurance companies) must include in his
or her Federal income tax return, as ordinary gain or loss, the
difference between the price paid for the bills, whether on
original issue or on subsequent purchase, and the amount actually
received either upon sale or redemption at maturity during the
taxable year for which the return is made.
Department of the Treasury Circulars, No. 418 (current
revision), Public Debt Series - Nos. 26-76 and 27-76, and this
notice, prescribe the terms of these Treasury bills and govern
the conditions of their issue. Copies of the circulars and
tender forms may be obtained from any Federal Reserve Bank or
Branch, or from the Bureau of the Public Debt.
FOR IMMEDIATE RELEASE
June 20, 1978
RESULTS OF AUCTION OF 2-YEAR NOTES
The Department of the Treasury has accepted $3,007 million of
$4,856 million of tenders received from the public for the 2-year
notes, Series Q-1980, auctioned today.
The range of accepted competitive bids was as follows:
Lowest yield 8.25% 1/
Highest yield
Average yield
8.33%
8.32%
The interest rate on the notes will be 8-1/4%. At the 8-1/4% rate,
the above yields result in the following prices:
Low-yield price 100.000
High-yield price
Average-yield price
99.855
99.873
The $3,007 million of accepted tenders includes $ 653 million of
noncompetitive tenders and $2,344 million of competitive tenders from
private investors, including 59% of the amount of notes bid for at
the high yield. It also includes $10 million of tenders at the
average price from Federal Reserve Banks as agents for foreign and
international monetary authorities in exchange for maturing securities.
In addition to the $3,007 million of tenders accepted in the
auction process, $ 794 million of tenders were accepted at the average
price from Government accounts and Federal Reserve Banks for their own
account in exchange for securities maturing June 30, 1978, and $560
million of tenders were accepted at the average price from Federal
Reserve Banks as agents for foreign and international monetary authorities
for new cash.
1/ Excepting 5 tenders totaling $240,000
B-994
Treasury Contact:
FOR IMMEDIATE RELEASE
June 22, 1978
Customs Contact:
Robert E. Nipp
202/566-5328
Brian Lee
202/566-5286
U.S. CUSTOMS TO PROVIDE ASSISTANCE TO
SAUDI ARABIAN CUSTOMS DEPARTMENT
The U.S. Customs Service will shortly be providing
a wide range of technical, management, and manpower development assistance to Saudi Arabia1s Customs Department.
Under the auspices of the U.S. - Saudi Arabian Joint
Commission on Economic Cooperation, an agreement was signed
in Riyadh, Saudi Arabia, on June 11 which calls for the
U.S. Customs Service to provide four full-time Customs
Advisors to the Saudi Customs Department in Riyadh, and
to furnish orientation and training to up to 9 5 Saudi
Customs officers a year in the United States. The new
program will be the most all-inclusive agreement of its
kind that the U.S. Customs Service has ever entered into
with another nation.
The four U.S. Advisors stationed in Riyadh will work
with their foreign counterparts to improve Saudi Customs1
administrative, technical, and management skills. At the
same time, the U.S. Customs Service will enroll up to 80
designated Saudi Customs officers a year in specially
designed seminar programs to be held at a university location in the United States. As part of the program, the
Saudi officers will observe Customs programs in operation
at selected Regional offices. Up to 15 additional Saudi
Customs officials a year will be enrolled in graduatelevel programs in Public Administration at various U.S.
universities and colleges and will also participate in related work-study programs.
This project is the fifteenth major project to be
carried out by the U.S. - Saudi Arabian Joint Commission
on Economic Cooperation, for which Secretary of the Treasury
W. Michael Blumenthal and Saudi Arabian Finance Minister
Muhammad Abalkhail are co-chairmen. Others include electrical equipment procurement and planning, agriculture
development, vocational training, highway planning, and
saline water research. All these projects are funded by
B-995
the Saudi Arabian Government. Treasury offices in Washington
- 2 and in Riyadh work with project action agencies such as
the U.S. Customs Service and provide overall support for
the more than 120 U.S. technicians now working in Saudi
Arabia in connection with these activities.
#
#
#
FOR IMMEDIATE RELEASE
June 20, 1978
Contact:
Robert E. Nipp
202/566-5328
TREASURY ANNOUNCES RESULTS
OF GOLD AUCTION
The Department of the Treasury announced that 300,000
ounces of fine gold were sold today to 21 successful bidders
at prices from $186.52 to $190.29 per ounce, yielding an
average price of $186.91 per ounce.
Gross proceeds from this sale were $56.1 million. Of
the proceeds, $12.7 million will be used to retire Gold
Certificates held by Federal Reserve banks. The remaining
$43.4 million will be deposited into the Treasury as a
miscellaneous receipt.
These sales were made as the second in a series of monthly
auctions being conducted by the General Services Administration
on behalf of the Department of the Treasury. The next auction,
at which another 300,000 ounces will be offered, will be held
on July 18.
A total of 165 valid bids were submitted by 31 bidders
for a total amount of 1,036,000 ounces at prices ranging from
$172.00 to $190.29 per ounce.
The General Services Administration will release additional information, including the list of successful bidders
and the amounts of gold awarded to each, after those bidders
have been notified that their bids have been accepted.
oOo
B-996
WtmentoftheTREASURY
TELEPHONE 566-20*1
I6T0N, D.C. 20220
FOR IMMEDIATE RELEASE
June 21, 1978
RESULTS OF TREASURY'S 52-WEEK BILL AUCTION
Tenders for $2,750 million of 52-week Treasury bills to be dated
June 27, 1978,
and to mature June 2 6 , 1979,
were accepted at the
Federal Reserve Banks and Treasury today. The details are as follows:
RANGE OF ACCEPTED COMPETITIVE BIDS:
Investment Rate
Price
High
Low
Average -
92.265
92.217
92.237
Discount Rate
(Equivalent Coupon-Issue Yield)
7.650%
7.697%
7.678%
8.24%
8.29%
8.27%
Tenders at the low price were allotted 4 2 % .
TOTAL TENDERS RECEIVED AND ACCEPTED
BY FEDERAL RESERVE DISTRICTS AND TREASURY:
Location
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Accepted
Received
52-WEEK BILL RATES
DATE: J u n e
HIGHEST SINCE
LAST MONTH
LOWEST SINCE
TODAY
Treasury
TOTAL
$4,4ui,/JD,UUU
$z,/^u,iy^,uuu
The $2,750 million of accepted tenders includes $ 86 million of
noncompetitive tenders from the public and $1,178 million of tenders from
Federal Reserve Banks for themselves and as agents of foreign and
ln
ternational monetary authorities accepted at the average price.
An additional $ 31 million of the bills will be issued to Federal
Reserve Banks as agents of foreign and international monetary authorities
for new cash.
B-997
2 1 , l<j)78
kpartmentoftheTREASURY
TELEPHONE S68-2P1
IINGTON, D.C. 20220
FOR IMMEDIATE RELEASE
June 21, 1978
RESULTS OF TREASURY'S 52-WEEK BILL AUCTION
/
Tenders for $2,750 million of 52-week Treasury bills to be dated
June 27, 1978,
and to mature June 26, 1979,
were accepted at the
Federal Reserve Banks and Treasury today. The details are as follows:
RANGE OF ACCEPTED COMPETITIVE BIDS:
Price
Discount Rate
High - 92.265 7.650%
Low
92.217
Average 92.237
Investment Rate
(Equivalent Coupon-Issue Yield)
8.24%
7.697%
7.678%
8.29%
8.27%
Tenders at the low price were allotted 42%
TOTAL TENDERS RECEIVED AND ACCEPTED
BY FEDERAL RESERVE DISTRICTS AND TREASURY:
Location
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTAL
Received
$ 31,790,000
3,709,365,000
2,820,000
65,195,000
36,740,000
7,685,000
212,515,000
18,545,000
17,605,000
6,505,000
11,370,000
278,120,000
3,480,000
Accepted
$ 16,790,000
2,392,765,000
2,820,000
55,195,000
21,580,000
7,685,000
133,815,000
8,965,000
17,605,000
6,505,000
10,870,000 >
72,120,000
3,480,000
$4,401,735,000 $2,750,195,000
The $2,750 million of accepted tenders includes $ 86 million of
noncompetitive tenders from the public and $1,178 million of tenders from
Federal Reserve Banks for themselves and as agents of foreign and
international monetary authorities accepted at the average price.
An additional $ 31 million of the bills will be issued to Federal
eserve Banks as agents of foreign and international monetary authorities
*°r new cash.
B-997
FOR IMMEDIATE RELEASE
jjne 23, 1978
Contact:
Robert E. Nipp
202/566-5328
TREASURY DEPARTMENT EXTENDS PERIOD
OF INVESTIGATION OF CARBON STEEL WIRE
ROD FROM THE UNITED KINGDOM
The Treasury Department announced today it will extend
its antidumping investigation of carbon steel wire rod from
the United Kingdom until July 24, 1978. Treasury said it
needed more time to consider information provided to determine
whether the product is being sold in the United States at less
than fair value.
As defined by the Antidumping Act, "sales at less than
fair value" generally occur when imported merchandise is sold
here for less than in the home market. If Treasury determines
"sales at less than fair value" occur, the case is referred to
the U.S. International Trade Commission to determine whether
they are hurting a U.S. industry. An affirmative ITC decision
would require dumping duties.
Notice of this action will appear in the Federal Register
of June 27, 1978.
Imports of carbon steel wire rod from the United Kingdom
during the period January through June 19 77 were valued at
$4 million.
#
B^99
#
#
Total Capital Gains and the Effective Tax Rate
on Capital Gains for Returns with Met Capital Gains Only
(1955-1976)
Year
(
Effective
tax
rate
Taxes paid
on capital gain
income
Total
gains
$ billions
) (....
percent ...)
12.0%
1955
$ 9.9
$1.2
1956
1957
1958
1959
1960
9,7
8.1
9.4
13.1
11.7
1.1
0.9
1.1
1.6
1.4
11.8
11.1
11.1
11.8
11.6
1961
1962
1963
1964
1965
16.3
13.5
14.6
17.4
21.5
2.0
1.6
1.7
2.2
2.8
12.4
11.8
11.9
12.7
13.1
1966
1967
1968
1969
1970
21.3
27.5
35.6
31.4
20.8
2.7
3.9
5.2
4.4
3.0
12.8
14.0
14.5
14.1
14.6
1971
1972
1973
1974
1975
28.3
35.9
35.8
30.2
30.9
4.3
5.6
5.3
4.3
4.5
15.2
15.7
14.9
14.3
14.4
1976
39.0
6.2
15.9
Office of the Secretary of the Treasury
Office of Tax Analysis
June 22, 1978
Distribution of Net Capital Gains
(Returns with Met Capital Gain Only)
Year
Returns with
Returns with
adjusted gross income
idjusted gross income
less than $50.000
over $50.000
Percent of total
Percent of total
net gains
net gains
percent
1955
65.5%
34.5%
1956
1957
1958
1959
1960
65.3
67.8
68.7
65.8
65.3
34.7
32.2
31.3
34.2
34.7
1961
1962
1963
1964
1965
62.7
64.7
66.1
61.8
59.9
37.3
35.3
33.9
38.2
40.1
1966
1967
1968
1969
1970
60.8
57.6
55.1
52.6
59.9
39.2
42.4
45.0
47.4
40.1
1971
1972
1973
1974
1975
58.3
56.1
60.3
62.9
63.0
41.7
43.9
39.7
37.1
37.0
1976
62.0
38.0
°ffice of the Secretary of the Treasury
Office of Tax Analysis
June 22, 1978
FOR IMMEDIATE RELEASE
June 23, 1978
Contact:
Alvin M. Hattal
202/566-8381
TREASURY ANNOUNCES COUNTERVAILING
DUTY INVESTIGATION OF IMPORTS OF
VISCOSE RAYON STAPLE FIBER FROM SWEDEN
The Treasury Department today said it is investigating whether the Government of Sweden is subsidizing
exports of viscose rayon staple fiber.
The Countervailing Duty Law requires the Secretary
of the Treasury to collect an additional duty that equals
the size of a "bounty or grant" (subsidy) paid on
the exportation or manufacture of merchandise imported
into the United States.
A preliminary determination in this case must be
made not later than October 25, 1978, and a final determination no later than April 25, 1979.
This product from Sweden is also the subject of an
investigation being conducted by the Treasury Department
under the Antidumping Act. Should final determinations
under the Antidumping Act and the Countervailing Duty Law
be affirmative, the amount of additional duties will be
determined so as to avoid double compensation for the
simultaneous occurrence of dumping and export subsidization.
Imports of the merchandise from Sweden were valued
at approximately $2.1 million in 1977.
Notice of this action will appear in the Federal
Register on June 26, 1978.
o
B-1001
0
o
FOR RELEASE ON DELIVERY
Expected at 8:30 a.m.
June 27, 1978
STATEMENT BY THE HONORABLE ROGER C. ALTMAN
ASSISTANT SECRETARY FOR DOMESTIC FINANCE
BEFORE THE
SUBCOMMITTEE ON DOMESTIC MONETARY POLICY
OF THE
HOUSE COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS
Mr. Chairman and Members of the Committee:
I welcome this opportunity to assist in your oversight
of the authority of Federal Reserve Banks to purchase directly
from the Treasury up to $5 billion of public debt obligations.
As you know, the most recent extension of this authority
expired on April 30, 1978. On April 19, 1978 this Subcommittee
favorably reported House Joint Resolution 816, to extend
this authority to April 30, 1979. The Resolution was adopted
by the House of Representatives on May 1, but the Senate
has not yet acted.
The purpose of the direct-purchase authority is to
facilitate the efficient management of the public debt.
It was first granted in its present form in 1942, and it
has been renewed for temporary periods on a number of
occasions. The authority has lapsed, however, on five
occasions in recent years -- from July 1 until August 14, 1973;
from November 1, 1973 until October 28, 1974; from November 1
to November 12, 1975; from October 1 until November 7, 1977
and the current period.
Borrowings from the Federal Reserve System under this
authority have been for very short periods, the average
length being from 2 to 7 days. Only twice in the past 35
years has the Treasury had to draw funds in this manner
B-1002
- 2 for periods exceeding 13 consecutive days. I have appended
a table which lists the instances of actual use. Borrowings
under the authority are subject to the public debt limit,
and its use is reported in the Daily Treasury Statement,
the weekly Federal Reserve Statement, and in the Federal
Reserve Board's Annual Report to the Congress.
The existence of the direct purchase authority
provides us with a margin of safety which permits us to
let our cash balance fall to otherwise unacceptably low
levels preceding periods of seasonally heavy revenues.
This, in turn, results in balances that are not as high
as they otherwise would be during the periods of high
revenues that follow, allowing the public debt to be kept
to a minimum and thus reducing interest costs to the
Government. Moreover, there is always the possibility
that unforeseen swings in our cash flows may suddenly
deplete our cash balance and require a sudden borrowing.
The direct-purchase authority is available to provide
an immediate source of funds for temporary financing in
the event of a national emergency on a broader scale.
While this has never happened, it is conceivable that
financial markets could be disrupted at a time when large
amounts of cash had to be raised to maintain governmental
functions and meet the emergency. Consequently, the directpurchase authority has for many years been a key element in
the Treasury's financial planning for a national emergency.
I want to emphasize that the direct-purchase authority
is viewed by the Treasury as a temporary accommodation to
be used only under unusual circumstances. The Treasury
fully agrees with the general principle that our debt obligations
should be floated in the market and that purchases of Treasury
obligations by the central bank should normally be made through
that same public market. The Treasury agrees also that
the direct-purchase authority should not be considered a
means by which the Treasury may independently attempt to
influence credit conditions by usurping the authority of
the Federal Reserve to engage in open market operations
in Government securities. In that connection, it is important
- 3 to emphasize that any direct recourse by the Treasury
to Federal Reserve credit under this authority is subject
to the discretion and control of the Federal Reserve
itself.
This concludes my prepared statement, Mr. Chairman.
I will be happy to respond to any questions.
Attachment
oOo
DIRECT BORROWING FROM FEDERAL RESERVE BANKS
1942 TO DATE
Calendar Days
Used
Year
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
Note:
Maximum Amount
At Any Time
(Millions)
Number of
Separate Times
Used
Maximum Number
Of Days Used At
Any One Time
6
$ 422
19
4
28
1,302
48
4
none
484
9
none
none
none
220
2
1
2
180
2
2
2
320
4
9
4
811
30
20
2
1,172
29
13
2
424
15
none
none
207
none
2
none
none
none
none
none
none
3
1
169
none
3
3
153
3
6
3
596
7
12
2
1,102
8
21
7
1
610
none
1
1
38
9
6
3
485
1
1
1
131
10
7
4
1,042
1
2,500
16
none
4
Federal Reserve direct purchase authority expired
on April 30, 1978,
Office of the Assistant Secretary
(Domestic Finance)
June 23, 1978
June 26, 1978
A number of inquiries have been received from the
press concerning the Treasury Department's intention to
initiate one or more "fast track" anti-dumping proceedings
concerning imported steel mill products under the "Trigger
Price Mechanism."
The "grace period" for flat-rolled products and rods
imported under fixed-term contracts concluded before
January 9, 1978 ended on April 30th. Since that date, Customs
reports both significant reductions in volume of imports
of such products and virtually no imports of such products
below applicable "trigger prices."
However, some imports below "trigger price" have been
identified. These are now being investigated by Customs.
The suppliers questioned are claiming that all or most of
their shipments either involved a related US importer and
have been or will be resold at or above trigger prices
(plus all costs of importation, storage, handling and resale
in the US), or that delivery was delayed beyond the grace
period due to uncontrollable events such as customs brokers'
delays. All such claims are being examined carefully. In
cases involving resale by a related importer, documentation
of all resale invoices are being requested and reviewed
to assure that the imported steel was sold to the customer
at trigger price plus appropriate charges for importation,
storage, handling and resale.
-2After Customs has finished its preliminary investi
gation of the facts, Treasury will determine whether
initiation of a formal anti-dumping investigation is
warranted.
kfartment of theJREASURY
HNGTON,
D.C. 20220 TELEPHONE 566-2041
FOR IMMEDIATE RELEASE
June 27, 1978
Contact:
Robert E. Nipp
202/566-5328
BEET SUGAR DUMPING COMPLAINT
INVOLVING THE EUROPEAN COMMUNITY
The Treasury Department announced today that it
has received a complaint from a group of beet sugar producers in Michigan claiming that about 50,000 tons of sugar
from the European Community were being imported at prices
substantially below those charged in European domestic
markets and benefiting from subsidies paid by the Community
exceeding the price at which the sugar was sold for export
to the United States.
Because portions of these shipments have begun to
arrive in the United States through the Port of Savannah,
the Customs Service began immediate preliminary investigations to determine whether proceedings should be
initiated under the Antidumping Act of 1921 and the
Countervailing Duty Law.
Under the Antidumping Act, special dumping duties
may be assessed on imports found to have been sold at
less than "fair value"—generally the price at which merchandise is sold on the home market of the exporter—and
such sales injure or threaten injury to a domestic industry.
Under the countervailing duty law, special countervailing
duties may be assessed on imports found to have benefited
from "bounties" or "grants" paid to the producer or exporter
by a foreign government.
The size of the alleged shipments and the prices at
which the sugar is claimed to have been sold have prompted
Treasury to expedite consideration of the matter.
o
B-1003
0
o
For Release Upon Delivery
Expected at 10:00 a.m., E.S.T.
STATEMENT OF
DANIEL I. HALPERIN, TAX LEGISLATIVE COUNSEL
OFFICE OF THE ASSISTANT SECRETARY OF TREASURY FOR TAX POLICY
BEFORE THE
SUBCOMMITTEE ON PRIVATE PENSION PLANS AND EMPLOYEE BENEFITS
OF THE SENATE FINANCE COMMITTEE
June 27, 1978
Mr. Chairman and Members of the Subcommittee:
I am pleased to have the opportunity to appear before
you today to discuss the Chairman's bill, S. 3140. The bill
would combine the administrative simplicity of separate
retirement funds for each employee (as under Individual
Retirement Accounts (IRAs)) with the higher contribution
level permitted for the self-employed when they adopt plans
for their employees (so-called Keogh or H.R. 10 plans). For
employers who choose to adopt the type of plan created under
the bill, it will achieve simplification without detriment
to the tax policies underlying the favored tax treatment of
employee retirement plans. Therefore, we are pleased to
support the bill and encourage its early enactment by the
Congress. At the same time, we would urge one modification
regarding integration with the Social Security system. We
would also wish to raise one significant issue of retirement
policy for the Subcommittee's consideration, namely, the
impact of the proposal on the choice between a defined
benefit and a defined contribution plan. I will discuss
these matters and several other features of the bill in the
remainder of this testimony after outlining the bill's
provisions.
Basic Outline of the Bill
The bill builds upon the framework of the IRA provisions added to the Internal Revenue Code by ERISA.
Current law (section 408(c)) provides for the establishment
of group individual retirement accounts by employers or
B-1004
- 2 associations of employees on behalf of employees. Deductible
contributions to these IRAs, like contributions to all other
IRAs, are made only by employees, and they are generally
limited to the lesser of $1,500 or 15 percent of annual
compensation. Deductible contributions cannot be made by an
employee if he or she was an active participant in a qualified plan during any part of the taxable year.
The bill would expand upon the concept of employermaintained IRAs, which have not been widely used up to now.
It would authorize deductible employer contributions to such
an IRA, with the employer contribution being limited to the
lesser of 15 percent of gross income or $7,500. This conforms to the deductible limitation for employer contributions on behalf of a self-employed individual under a Keogh
plan.
In order to obtain this status, the simplified plan
must be an employer-sponsored group IRA meeting a combination of requirements under the IRA provisions and the
qualified plan provisions which would insure maximum security
once the funds have been contributed and, further, would
insure against discrimination in favor of highly-paid
employees. Thus, for example, participation would have to
be on a nondiscriminatory basis, an employee could not be
denied participation on the basis of service once he or she
has completed three years of service, and employer contributions would be fully and immediately vested.
Another significant feature of the bill is that if an
employer's contribution for an employee is less than the
annual IRA limitation for that employee, the individual
could make up the difference.
From the employer's point of view, the bill proposes
simplified reporting and disclosure requirements and the
further simplification of the plan itself. Simplified plan
design could be achieved either through adoption of a model
plan or through an individually designed plan which would be
simpler than the typical employer plan under present law.
I would like to turn now to four specific considerations
in connection with the bill.
- 3 Discrimination
The present Code provision for employer-sponsored IRAs
does not contain any anti-discrimination rules. There have
been suggestions that the provision be amended to add such
rules. However, we have viewed such an amendment as a
fruitless exercise within the framework of the current IRA
provisions. Current law provides no incentive for an
employer to establish a group IRA plan as opposed to individual
plans. Therefore, anti-discrimination requirements for
employer-sponsored plans could be circumvented by the simple
technique of individual employees establishing IRAs, perhaps
with the aid of the employer.
The bill, however, does provide an incentive for the
employer to establish the simplified plan. It accomplishes
this by allowing substantial deductions for employer contributions to such plans. The bill also precludes the
establishment of employer-sponsored IRAs on a discriminatory
basis. Therefore, we believe the bill represents a meaningful effort to eliminate discrimination in this area.
Employee Contributions
The bill will allow an employee to contribute and
deduct the difference between the employer's contribution
and the deductible limitation for IRAs applicable to the
employee under current law. This will alleviate a problem
which has existed since the IRA provisions were enacted as
part of ERISA. An employee may not make a deductible contribution to an IRA if he or she is an active participant in
a qualified plan for any part of the taxable year. This has
caused certain employees to view participation in a qualified
plan as detrimental because employer contributions to a
qualified plan on their behalf are quite small or because
the employee does not expect to vest in a retirement benefit
under the employer-maintained plan.
Several proposals have been made in this Congress and
the previous Congress to deal with this problem. In some
cases, those proposals have contained defects either because
they were extremely complicated or because they allowed
extra IRA contributions on a discriminatory basis. In some
cases, both defects were present.
S. 3140 is much more satisfactory from this standpoint.
First, the bill resolves the problem of an employee who
changes jobs frequently and might never vest under an
- 4 ordinary retirement plan. Under the simplified plan, that
employee's benefits are always fully vested and fully
portable.
.Secondly, it is designed to encourage retirement
savings for low-income persons. As an illustration, assume
the employer maintains a simplified plan for the benefit of
two employees, one of whom earns $30,000 while the other
earns $10,000. An employer contribution of 10 percent of
compensation on behalf of each will result in contributions
of $3,000 and $1,000 respectively. The higher-paid employee
will not be able to make an extra IRA contribution, because
the employer contribution already exceeds the employee's
$1,500 deductible limitation. On the other hand, the
$10,000 employee can make an extra IRA contribution up to
$500.
Finally, and most importantly, it has a built-in overall
$1,500 limit which would generally prevent excessive combining of IRA contributions with benefits under a qualified
plan. I must caution, however, that this privilege could be
abused if an employer establishes more than one plan. For
example, if the employer maintains a profit-sharing plan to
which it makes substantial contributions, the employer
should not be able to adopt a simplified plan described in
the bill and make very small contributions, thereby allowing
highly-paid individuals to make deductible excess IRA contributions to almost the full extent of the IRA deduction
limitation. Thus, the ability to deduct employee contributions should be limited to those who do not participate in a
qualified plan other than the new simplified plan. More
complex solutions should be avoided. IRAs are intended to
be simple arrangements understandable by unsophisticated
individuals who do not have access to advice from attorneys,
accountants, and other advisors. Unfortunately, the existing IRA provisions are already extremely complicated and
contain many traps for taxpayers who do not precisely follow
the rules. We urge that these problems not be magnified by
the adoption of complex rules under the bill.
Integration
As we understand it, the bill would allow a simplified
plan to be integrated with Social Security under the current
integration rules for Keogh plans. Integration is accomplished
in a Keogh plan by taking into account Social Security taxes
paid on behalf of employees as plan contributions by the
employer for the employees.
- 5 We have been concerned about the current integration
rules. At their worst, they have resulted in qualified
plans which benefit only highly-compensated employees. This
undercuts the rationale reflected in the anti-discrimination
rules for qualified plans — that is, tax benefits associated
with qualified plans should serve as an incentive for an
employer to provide retirement benefits for employees at all
levels of income. These concerns led to the proposal for
changes in the integration rules contained in the President's
Tax Reform Program.
Under the tax reform proposal, a plan could still be
integrated with Social Security, but only if it provides
substantial benefits for all participating employees.*
A number of persons who have objected to the integration
proposal have not done so on the merits. Rather, they have
been concerned that a shift in the integration rules will
necessitate relatively widespread plan amendments following
closely upon the amendments which have just been made to
meet the standards enacted by ERISA. For those people, the
primary objection has been the cost and administrative
problems associated with amendments rather than the ongoing
costs of meeting the proposed ratio. Since S. 3140 would
result in entirely new plans, the amendment problem would
not exist. Therefore, we suggest to the Subcommittee that
it consider allowing integration only where a simplified
plan satisfies the President's integration proposal.
Defined Benefit Plans
As a practical matter, the approach taken by S. 3140
lends itself only to defined contribution plans. The
employer contributes a specified percentage of pay which is
deposited in each employee's account. The level of retirement benefits is not specified but will be the amount
which can be derived from the sum contributed and the
earnings thereon. In contrast a defined benefit plan
provides
for a specific
benefit,
example,
$10 per month
* Specifically,
the proposal
for for
defined
contribution
plans
is that the proportion of contributions allocable to
compensation above the integration level may not be in
a ratio greater than 1.8 times the proportion of contributions allocable to compensation below the integration level.
As a result of testimony before various committees and discussion with interested persons, we are prepared to modify
that proposal so that the basic ratio may be 2 to 1
rather than 1.8 to 1.
- 6 per year of service, 1 percent of career average pay per
year of service, 1 percent of average pay over the last five
years of service per year of service. Since the employer's
contribution to this type of plan is affected by the investment performance and the age of the participant and in
some circumstances by changes in the compensation level, a
defined benefit plan does not easily fit into the individual
account pattern required for the simplified plan.
Because it established minimum funding requirements,
premium payments for plan termination insurance and in some
cases employer liability upon plan termination, ERISA may
have made defined benefit plans less attractive compared to
defined contribution plans than they were prior to the
enactment of the legislation. From one point of view this
is a beneficial effect of ERISA.
Some conceive of the employer's contribution to a
pension plan as a payment in lieu of an increase in current
salary and, therefore, each employee should have a nonforfeitable right to his or her proportionate share of the
contribution. Others argue that defined contribution plans
are more meaningful to those who spend less than a full
career with one employer . Contributions under such plans
tend to be a level percentage of pay regardless of age. If
it is assumed salary will increase and that an adequate
retirement income must be measured against earnings at the
time of retirement, the contribution level will be higher
than it would be if earnings were expected to remain steady.*
Thus, the vested benefit under a defined contribution plan
could include some provision for anticipated increases in
earnings. Under a defined benefit plan the value of a
vested benefit is determined by reference to earnings at the
time of separation from service. Therefore, the amount of a
lifetime pension, even if full vesting is achieved, will be
less if the employee changes jobs than if he or she stays
with one employer. A defined contribution plan could produce
the same benefit in both situations.
On the other hand, a defined benefit plan can more
easily adjust for changes in salary and plan earnings.
Particularly if it promises a specified percentage of
Khif works out correctly if the rate of salary growth is
both uniform among employees and correctly anticipated. It
also ignores the difficulty of providing for past service
under a defined contribution plan started or improved when
the employee is in mid-career.
- 7 pre-retirement pay, such a plan is much more meaningful to
the employee in facilitating planning for retirement. Very
few employees can estimate the adequacy of a benefit from a
defined contribution plan.
Therefore, on balance we think a shift in plan design
toward defined contribution plans would be unfortunate. We
believe there needs to be a study as to whether such a shift
has taken place and if so whether it furthers the interests
of providing retirement security for employees as a group.
We do not think, however, that this word of caution should
deter prompt action on S. 3140.
o
0
o
itjartmentoftheTREASURY
6T0N.D.C. 20220
TELEPHONE SS8-2041
FOR IMMEDIATE RELEASE
June 26, 1978
RESULTS OF TREASURY'S WEEKLY BILL AUCTIONS
Tenders for $2,300 million of 13-week Treasury bills and for $3,400 million
of 26-week Treasury bills, both series to be issued on June 29, 1978,
»<e:eaccepted at the Federal Reserve Banks and Treasury today. The details are
as follows:
.RANGE OF ACCEPTED
13-week bills
(COMPETITIVE BIDS: maturing September 28, 1978
Price
Discount
Rate
Investment
Rate 1/
98.245a/
6.943%
7.17%
High
98.237
6.975%
7.20%
Low
6.967%
98.239
7.19%
Average
a/Excepting 3 tenders totaling $480,000
26-week bills
maturing December 28, 1978
Discount Investment
Price
Rate
96.266b/
96.258
96.261
Rate 1/
7.78%
7.80%
7.
7.386%
7.402%
7.396%
b/ Excepting 1 tender of $1,790,000
Tenders at the low price for the 13-week bills were allotted 97%.
Tenders at the low price for the 26-week bills were allotted 52%.
TOTAL TENDERS RECEIVED AND ACCEPTED
BY FEDERAL RESERVE DISTRICTS AND TREASURY:
Location
Received
Accepted
Received
Boston
few York
^ladelphia
Cleveland
ichmond
Atlanta
Chicago
St
- Louis
Minneapolis
Ka
nsas Citv
Dallas
$
$
$
San
^ancisco
heasurv
TOTALS
17,870,000
3,519,985,000
29,050,000
38,025,000
16,405,000
23,200,000
172,455,000
34,155,000
14,410,000
21,660,000
17,075,000
272,370,000
5,925,000
$4,182,585,000
17,720,000
1,891,125,000
29,050,000
23,025,000
14,405,000
23,100,000
118,240,000
23,155,000
11,320,000
20,860,000
11,075,000
111,470,000
5,925,000
$2,300,470,000c/.
11,160,000
4,720,340,000
7,545,000
57,260,000
29,655,000
30,290,000
310,105,000
33,170,000
12,550,000
14,850,000
8,400,000
464,035,000
Accepted
$
11,160,000
2,796,160,000
7,305.000
16,070,000
8,655,000
19,095,000
165,445,000
20,110,000
7,150,000
1.4/485,000
8,400,000
323,035,000
2,980,000
2,980,000
$5,702,340,000
$3,400,050,000d/
uriVS ^ 3 1 5 > 6 5 0 > 0 0 0 noncompetitive tenders from the public
j. !fcs$191,025,000 noncompetitive tenders from the public
a
-^nt coupon-issue yield.
FOR RELEASE AT 4:00 P.M.
June 27, 1978
TREASURY'S WEEKLY BILL OFFERING
The Department of the Treasury, by this public notice,
invites tenders for two series of Treasury bills totaling
approximately $5,700 million, to be issued July 6, 1978.
This offering will not provide new cash for the Treasury as the
maturing bills are outstanding in the amount of $5,707 million.
The two series offered are as follows:
91-day bills (to maturity date) for approximately $2,300
million, representing an additional amount of bills dated
an( t o
April 6, 1978,
*
mature October 5, 1978
(CUSIP No.
912793 T6 3) t 'originally issued in the amount of $3,406 million,
the additional and original bills to be freely interchangeable.
182-day bills for approximately $3,400 million to be dated
July 6, 1978,
and to mature January 4, 1979
(CUSIP No.
912793 W2 8) .
Both series of bills will be issued for cash and in
exchange for Treasury bills maturing July 6, 1978.
Federal Reserve Banks, for themselves and as agents of foreign
and international monetary authorities, presently hold $3,514
million of the maturing bills. These accounts may exchange bills
they hold for the bills now being offered at the weighted average
prices of accepted competitive tenders.
The bills will be issued on a discount basis under competitive
and noncompetitive bidding, and at maturity their par amount will
be payable without interest. Except for definitive bills in the
$100,000 denomination, which will be available only to investors
who are able to show that they are required by law or regulation
to hold securities in physical form, both series of bills will be
issued entirely in book-entry form in a minimum amount of $10,000
and in any higher $5,000 multiple, on the records either of the
Federal Reserve Banks and Branches, or of the Department of the
Treasury.
Tenders will be received at Federal Reserve Banks and
Branches and at the Bureau of the Public Debt, Washington,
D
- C
20226, up to 1:30 p.m., Eastern Daylight Saving time,
Monday, July 3, 1978.
Form PD 4632-2 (for 26-week
series) or Form PD 4632-3 (for 13-week series) should be used
to submit tenders for bills to be maintained on the book-entry
£-1006
records of the Department of the Treasury.
-2Each tender must be for a minimum of $10,000. Tenders
over $10,000 must be in multiples of $5,000. In the case of
competitive tenders the price offered must be expressed on
the basis of 100, with not more than three decimals, e.g.,
99.925. Fractions may not be used.
Banking institutions and dealers who make primary
markets in Government securities and report daily to the
Federal Reserve Bank of New York their positions in and
borrowings on such securities may submit tenders for account
of customers, if the names of the customers and the amount
for each customer are furnished. Others are only permitted
to submit tenders for their own account.
Payment for the full par amount of the bills applied for
must accompany all tenders submitted for bills to be maintained
on the book-entry records of the Department of the Treasury. A
cash adjustment will be made on all accepted tenders for the
difference between the par payment submitted and the actual
or
issue price as determined in the auction.
ii
No deposit need accompany tenders from incorporated banks
and trust companies and from responsible and recognized dealers
in investment securities for bills to be maintained on the
book-entry records of Federal Reserve Banks and Branches, or for
bills issued in bearer form, where authorized. A deposit of 2
percent of the par amount of the bills applied for must
accompany tenders for such bills from others, unless an express
guaranty of payment by an incorporated bank or trust company
accompanies the tenders.
Public announcement will be made by the Department of the
Treasury of the amount and price range of accepted bids.
Competitive bidders will be advised of the acceptance or
rejection of their tenders. The Secretary of the Treasury
expressly reserves the right to accept or reject any or all
tenders, in whole or in part, and the Secretary's action
shall be final. Subject to these reservations, noncompetitive
tenders for each issue for $500,000 or less without stated price
from any one bidder will be accepted in full at the weighted
average price (in three decimals) of accepted competitive bids
for the respective issues.
Settlement for accepted tenders for bills to be maintained on the book-entry records of Federal Reserve Banks
and Branches, and bills issued in bearer form must be made
or completed at the Federal Reserve Bank or Branch or at the
Bureau of the Public Debt on July 6, 1978,
in cash or
other immediately available funds or in Treasury bills maturing
July 6, 1978.
Cash adjustments will be made for
differences between the par value of the maturing bills
accepted in exchange and the issue price of the new bills.
-3Under Sections 454(b) and 1221(5) of the Internal Revenue
Code of 1954 the amount of discount at which these bills are
sold is considered to accrue when the bills are sold, redeemed
or otherwise disposed of, and the bills are excluded from
consideration as capital assets. Accordingly, the owner of these
bills (other than life insurance companies) must include in his
or her Federal income tax return, as ordinary gain or loss, the
difference between the price paid for the bills, whether on
original issue or on subsequent purchase, and the amount actually
received either upon sale or redemption at maturity during the
taxable year for which the return is made.
Department of the Treasury Circulars, No. 418 (current
revision), Public Debt Series - Nos. 26-76 and 27-76, and this
notice, prescribe the terms of these Treasury bills and govern
the conditions of their issue. Copies of the circulars and
tender forms may be obtained from any Federal Reserve Bank or
Branch, or from the Bureau of the Public Debt.
FOR RELEASE UPON DELIVERY
EXPECTED AT 9:00 A.M.
THURSDAY, JUNE 29, 1978
STATEMENT OF THE HONORABLE DANIEL H. BRILL
ASSISTANT SECRETARY OF THE TREASURY FOR ECONOMIC POLICY
BEFORE THE SUBCOMMITTEE ON TAXATION AND DEBT MANAGEMENT
OF THE SENATE FINANCE COMMITTEE
Mr. Chairman and members of this distinguished Committee:
The issue before us today is that of determining the
most effective way of encouraging more investment.
There is no disagreement among us as to the importance
of this objective. It is clear, from many perspectives,
that too much of our output of goods and services is devoted
to current consumption, and too little to investment in new
and more efficient tools of production—investment that will
permit future growth in consumption.
Even after three years of recovery, real business fixed
investment remains below its prerecession peak. As a result,
our capacity to produce is growing too slowly, at less than a
3 percent annual rate compared with over 4-1/2 percent in the
first two postwar decades.
Paralleling this sluggish growth in investment and capacity
has been a deceleration in the rate of growth cf productivity,
B-1007
-2the factor responsible for a major share of U.S. economic
growth. This slowdown in productivity growth adversely
affects our ability to achieve price stability and our
ability to remain competitive with producers abroad.
We are all dedicated, therefore, to the search for the
most effective ways of promoting increased capital formation.
There are before us specific proposals to encourage capital
formation by reducing the tax on capital gains. Fundamentally, these proposals rest on the premise that reduction
in the capital gains tax will have a very favorable effect on
stock prices, and that the resulting enhancement of stock
prices will, by increasing the wealth of investors and/or
reducing the cost of raising equity capital, encourage a
higher rate of investment.
Admittedly, the argument appears intuitively plausible.
One might indeed expect some favorable reaction in stock
prices if the capital gains tax were reduced. And one might
also expect that a reduction in the cost of equity capital—
the result of rising stock prices—would encourage some
additional investment, since the inability to obtain equity
funds is generally recognized as one of the barriers to
investment, particularly for smaller companies.
The critical question is by how much. We have only a
limited amount of resources to devote to tax preferences for
-3investment.
Is this use—a reduction in revenues from
lower capital, gains taxes—a cost-effective way of promoting investment?
Unfortunately, there is little direct historical
evidence on which to base an analysis.
There has been no
reduction in capital gains tax rates in the past quartercentury, only increases.
One must, therefore, argue the case for capital gains
tax reduction by assertion or analogy, which is just what
has been done in three major studies of the problem—the
study sponsored by the Securities Industry Association (SIA),
the study conducted by Merrill Lynch (ML) and the study
conducted by Chase Econometric Services, Inc. (Chase).
I
would like to comment on the methodology employed in each
of the surveys, particularly with respect to those variables
critical to a determination of the effectiveness of capital
gains tax changes in influencing investment.
In the study sponsored by the Securities Industry
Association, the argument is made by assertion.
A specific
and arbitrary assumption is made that complete elimination
of the capital gains tax would result in a 20 percent increase
in stock prices over the first five quarters after the tax
change is implemented.
This assertion, along with other
-4assumptions about the extent to which higher prices
will encourage shareholders to realize their gains, are
inserted into the economic model constructed by Data
Resources, Inc. (DRI), and the model is run to produce
estimates of the resultant growth in GNP, in business investment, and in Federal revenues resulting from the higher GNP.
The results are not surprising: higher stock prices,
resulting in a greater amount of realization of capital
gains, will increase incomes, investment and Federal
revenues—all by substantial amounts. For example, two
years after the elimination of the capital gains tax, real
GNP in the SIA simulation would be about $47.5 billion
(1978 $) higher, nonresidential fixed investment nearly
$18 billion higher, the Federal budget deficit (NIA basis)
about $10.5 billion lower, and the unemployment rate 0.7
percentage points lower.
All delightful outcomes, devoutly to be wished. But
all resting very heavily on an assumption that stock prices
would increase by 20 percent in response to the postulated
change in capital gains tax, and questionable econometric
relationships implying that the higher level of stock prices
would spur consumption and investment to such dramatically
higher levels.
-5Another study of the potential effect of capital gains
tax reduction was undertaken by Merrill Lynch. In this
study, it was assumed that the capital gains tax would be
reduced in the third quarter of 1978, not to zero but to
a new maximum rate of 25 percent. The result of such a
tax change is assumed to reduce the cost of new equity
capital by some 25 to 30 basis points. This assumption is
traced through an econometric model to show the effect on
overall stock prices, on investment and on gross national
product. The results indicate a potential rise in stock
prices of only 4 to 6 percent, an increase in 1980 GNP of
only 0.3 percent, and increased Federal revenues sufficient
to result in about a $2.5 billion smaller deficit despite
an initial tax cut of about $2 billion.
It is most important to emphasize again that this study,
as did the SIA study, rests on assumptions about the effects
of capital gains tax rate changes on stock prices, not on
any empirical evidence of the effects. In the ML case, the
effects assumed are those on the cost of new equity capital,
which is translated into the prices of all equity issues.
The ML assumptions about stock price response are more modest
than those used in the SIA study, and the projected benefits
to the economy and on the Federal deficit are correspondingly
more modest. But they still rest on assumptions.
-6The third study which we reference today is that
undertaken by Chase Econometric Services, Inc. Here,
the effect on stock prices of a reduction of capital
gains taxation to a 25 percent maximum rate is stated to
be a rise of nearly 40 percent in stock prices over the
next two years which, in turn, increases gross national
product, investment and Federal revenues.
The Chase analysis does not rest on an assumption about
the stock price response to capital gains tax reduction.
Rather it is based on an equation "...empirically determined
from multiple regression analysis and is not simply an
assumption pulled out of thin air."
It is worth examining this statement further, for any
equation that can adequately explain stock price behavior
is likely to be of interest to a wider audience than only
those concerned with capital gains tax provisions.
The Chase study states that fluctuations in stock
prices can be explained by seven factors, or variables.
These variables include interest rates, corporate profits,
replacement cost adjustment to capital consumption allowances,
dividend payments, disposable personal income and two variables
relating to maximum tax rates: the maximum tax rate on capital
gains, and a variable apparently intended to capture the
effect of legislated changes in the maximum tax rate on
earned income. The latter is set at zero
-7from 1955 through 1968, and at 20 for the years after
1968.
The results of the Chase equation purport to tell
us that (a) changes in the capital gains tax rate explain
about one-fourth of the fluctuation in stock prices over
the period from 1955 to 1977 and (b) a reduction in the
maximum capital gains tax rate to 25 percent would result
in a 40 percent rise in stock prices within a two-year
period. This is a far more dramatic effect on stock prices
than is assumed in either the SIA or the Merrill Lynch
study.
Are there results derived from the Chase equation
statistically valid? I*m afraid they must be regarded as
suspect. The methodology used commits several grievous
statistical sins. In the parlance of the statistical profession, the Chase equation is guilty of multicollinearity
and serial correlation, as well as improper specification.
I will not take up the Committee's time with methodological
points; these are covered in a brief technical note attached
to my statement. It is important to note, however, that the
existence of such a defect as multicollinearity (technical
jargon for the case where two of the factors used to explain
-luctuations in a third are in themselves highly interrelated) means that the measure of the relative importance of
the capital gains tax in explaining stock prices is subject
-8to large statistical error.
This is borne out by the
fact that if one of the redundant variables is dropped
from the equation, the results change dramatically; in
this case, the rise in stock prices resulting from reduction
in the capital gains tax falls to 9 percent, from the 40
percent claimed for the original equation.
The existence of serial correlation—condition where
differences between actual observations and the values
estimated by an equation show a persistent pattern—also
means that the equation is not statistically reliable.
This can easily be confirmed by applying one of the standard
techniques for correcting for serial correlation. When one
applies this correction to the Chase equation, the importance
of changes in the capital gains tax rate in explaining stock
price behavior is reduced significantly.
The major point to be made about the three studies relating
to the effect of capital gains taxes is that in two of them,
the results rest very heavily on assumptions about the
critical factor of the response of stock prices, and in the
third study, the attempt to use analytic techniques instead
of assumptions suffers from such serious methodological flaws
as to vitiate the results. On the stock price response
factor, the studies differ widely: one study asserts that
-9complete elimination of the capital gains tax would
result in a 20 percent rise in stock prices, another
that only partial elimination of the tax would yield a
40 percent rise, and the third that partial elimination
would result in only a 4 to 6 percent stock price increase.
The second point to be made about these studies is that
they yield widely different results as to the economic
benefits to be expected from a capital gains tax reduction
and the ensuing rise in stock prices.
The 20 percent rise
in prices assumed for the SIA study would, in their calculation, produce a rise in total output—GNP—some 9 times as
great as the initial tax reduction.
The Merrill Lynch
calculations yield a multiplier of only 2, and the Chase
calculations a multiplier of about 3-1/2.
It should also be
noted that most of the projected increase in GNP in the SIA
study develops in consumption, not investment; the Chase study
has more of the benefits accruing to investment and the
Merrill Lynch study splits its modest effects more evenly
between consumption and investment.
Thus, the studies are
all over the map not only with respect to stock price impacts
but also as to the purported benefits flowing from tax
reduction.
How reasonable are the assumptions about the effect of
a capital gains tax reduction on stock prices?
As noted
-10earlier, there is little directly relevant historical
experience, so the argument has to be made—if at all—
by analogy. Thus, some proponents of capital gains tax
reductions have simply cited the record of stock prices
before and after the Tax Reform Act of 1969, which raised
the maximum rates payable on realized capital gains. In
the eight years after enactment of higher capital gains
rates (from 1969 to the end of 1977), stock prices rose only
0.4 percent, compared with a 47.6 percent rise in the eight
years preceding the imposition of higher taxes. Q.E.D.:
raising capital gains taxes has tended to reduce stock price
gains and, therefore, the converse must be true; lowering
the capital gains tax rate would raise stock prices.
But when one looks behind this glib, rather superficial
analysis, a different and more puzzling story emerges. The
Tax Reform Act of 1969 was signed on December 30, 1969, and
most provisions became effective on January 1, 1970.
Since it may have been anticipated that the capital gains
tax rate would be increased, even before the change was
formally enacted, one might have expected a rise in stock
market volume and a decline in prices in 1969, as investors
hurried to realize capital gains before the new higher tax
rates were imposed. But stock prices started their decline
a
t the end of 1968—long before any expectation of higher tax
-11rates—and both trading volume and the volume of realized
gains declined in 1969.
After the new tax rates became effective, stock prices
rose from mid-70, until they reached a peak in January 1973.
In the two and a half year period after higher tax rates
were in effect, the stock price index rose by 46 percent.
It is difficult to explain why prices and realizations,
went u£ after the effective date, and it certainly raises
doubts about the signficance of the maximum tax rate on
investor decisions, at least in the 1969-73 period.
Of course, since 1973, stock prices have behaved poorly.
But it does strain credulity to attribute the behavior of
stock prices to continued high capital gains taxation alone
in a period marked by such events as an oil embargo, a
quintupling of oil prices, a worldwide investment boom
accompanied by double-digit inflation and double-digit interest
rates, followed by the worst recession since 1930fs.
To
explain stock price behavior since 1973 exclusively in terms
of a higher capital gains tax, in the midst of such sweeping
economic trauma, requires some stretching.
Where does this leave the analysis?
I submit that the
verdict any jury would deliver is "case not proven".
Reductions in capital gains taxation might—and I emphasize
-12might—influence stock prices by some indeterminate
amount, and this change in stock prices might—and again
I emphasize might—be conducive to some rise in investment.
But none of the studies discussed today provides a sound
basis—only assertion or imperfect statistical analysis—
for determining what quantities would result from such tax
policy changes.
Tax preferences for specific forms of income must
essentially be classed as subsidies, whatever euphemism is
used to disguise the subsidy. It would appear to me, therefore, a rather risky venture to dispense public funds for
subsidies to investment on the basis of such meager analytical
evidence as has been submitted. And the risk is particularly
great when this form of subsidy would result in a significant
distortion in the equity of our tax structure. Equity in our
tax system is no trivial matter, in a society where every
citizen is expected to pay his fair share of the cost of
public services.
Moreover, it is an unnecessary risk, since other incentives
to capital formation, such as extension of the investment tax
credit and/or a reduction in corporate income tax rates have
a more direct relationship to business investment decisions.
I would urge the Committee, therefore, to devote its attention
-13to the proposals for investment credits and tax rate
reductions in the program submitted by the President,
rather than to divert its attention to unproven and
inequitable remedies.
Appendix on Methodology
This appendix considers certain technical details affecting
the results of the analyses of the impact of a capital gains
tax reduction prepared by the Securities Industry Association
(SIA), Merrill Lynch (ML) and Chase Econometric Services, Inc.
(Chase) .
Securities Industrv Association Studv
Method of Simulation
The Data Resources Inc. (DRI) model used in the SIA study
is not readily ameniable to answering questions concerning the
impact of changes in capital gains taxation on economic activity.
Tax rates on capital gains do not appear as explicit exogenous
variables in the model. In using the DRI model, SIA simulated
the impact of a complete elimination of capital gains taxation
by decreasing personal and corporate income tax rates by an
equivalent amount (initially $5.1 billion). The appropriateness
of lowering the personal tax rate for all consumers is dubious,
in that it is largely individuals in the upper income tax
classes who would benefit from a capital qains reduction, rather
than the publie-at-large. As a consequence, the net effect
of the SIA procedure is probably to over-estimate the effect
on consumption, and hence the induced effect on investment,
of cuts in the maximum capital gains tax rate.
The SIA study found that a complete elimination of capital
gains taxes would result in a $47.7 increase in real GNP over
about a two-year period. This result implies tax multipliers
of about nine—four to five times as high as the empiricallyderived personal and corporate income tax multipliers traditionally used in assessing the likely impact of tax changes on GNP.
Assumed Increase in Stock Prices
The very large multiplier effect of the SIA study reflects
not only the questionable manner in which the tax reduction
is introduced into the simulation, but also the assumed 20 percent stock price increase which feeds back, via a household
wealth equation, to consumption and investment. If smaller
increases in stock market prices are assumed, much smaller
GNP, consumption and investment multipliers result.
-2It is interesting to note that stock prices are endogenous
in the DRI model and need not be specified exogenously. When
one leaves stock prices endogenous and simulates a capital
gains tax reduction, or elimination, the DRI model shows only
very modest stock price changes.
Chase Study
Stock Price Equation
Stock prices are endogenous in the Chase model. The
Chase stock market prediction equation treats stock prices as
a function of seven explanatory variables:
(1) the maximum capital gains tax rate (six quarter
weighted average);
(2) a dummy variable set at zero from 1955 through 1968,
and set at 20 for the years after 1968 intended to
capture the effect of the 20-point change in the
maximum rate on earned income;
(3) prime commercial bank loan rate (percent);
(4) corporate profits, after tax, with adjustments^for
capital consumption and inventory valuation (billions
of current dollars);
(5) corporate capital consumption adjustment (billions of
current dollars);
(6) dividend payout ratio; and,
(7) disposable income less transfer payments to persons
(billions of current dollars).
The Chase equation has several serious methodological
and specification flaws which cast doubts about the credibility
of its predictions.
Serial Correlation
The Chase stock market equation suffers from "serial
correlation." Serial correlation is a technical term to
describe the situation in which differences between the actual
and the estimated values derived from an equation show a^
persistent pattern. The presence of serial correlation in the
Chase equation is indicated by the low Durbin-Watson ratio (0.6
-3a standard measure used by econometricians to test for this
problem.
There are statistical techniques for correcting for
serial correlation, e.g., the Cochrane-Orcutt correction.
When one applies this particular correction to the Chase
equation, then the coefficients—the values attributed to
each explanatory variable—change radically. In particular,
the importance of the capital gains tax rate in explaining
stock price behavior drops sharply. The presence of serial
correlation means, to technical workers in the field, that
results derived from an equation suffering from this malady
are essentially "inefficient" and hence, particularly unreliable in forecasting.
Multicollinearity
The maximum tax rate variable and the dummy variable
included in the Chase stock market equation are highly
correlated—a 0.9 7 correlation out of a possible 1.00. Largely
as a result, the equation suffers from "multicollinearity",
an ailment that saps the strength of statistical results.
Johnston points out that when multicollinearity is present in
an equation,
"The precision of estimation falls so that it becomes
very difficult, if not impossible, to disentagle the
relative influences of the various...variables. This
loss of precision has three aspects: specific estimates
may have very large errors; these errors may be highly
correlated, one with another; and the sampling variances
of the coefficients will be very large...
Estimates of coefficients become very sensitive to particular sets of sample data, and the addition of a few more
observations can sometimes produce dramatic shifts in
some of the coefficients." (Econometric Methods, 2nd
Edition, 19 72, p.160).
A standard way of treating an equation for multicollinearity
is to omit one of the collinear variables from the equation.
When the dummy variable is dropped,.the coefficient of the
capital gains tax rate drops substantially, implying a stock
market rise of only 9 percent instead of the nearly 40 percent
implied by the uncorrected Chase stock market prediction
equation.
In addition to the methodological flaws discussed above,
the Chase equation has specification defects—such as the use
of the maximum tax rate on capital gains instead of the much
-4lower actual effective rates paid by most taxpayers.
Merrill Lynch Study
In the methodology used by ML to analyze the impact of
the Steiger Amendment, calculations of pre-tax and after-tax
rates of returns to investors were made outside of the ML
macro-model. Assumptions regarding the extent that the firm's
cost of equity financing would decrease were made based upon
these calculations. These assumed cost decreases were then
fed into the ML model and the impacts upon the general economy
observed. A 4-6 percent increase in stock prices was predicted.
When one uses the ML methodology to simulate the impact of a
complete elimination of capital gains taxation, the results
are a stock price increase of 9 to 12 percent. These results
cast further doubt on the reasonableness, of the 20 percent rate
assumed by SIA and the 40 percent rate derived from the Chase
equation.
FOR RELEASE UPON DELIVERY
Statement of the Honorable W. Michael Blumenthal
on Capital Gains Tax Bills
Before the Subcommittee on Taxation and Debt Management
Committee on Finance
June 28, 1978
Mr. Chairman and members of this Subcommittee:
I welcome the opportunity to appear before this Subcommittee
to present the Administration's views on three bills before you:
S.3065, S. 2428 and S. 2608.
Each of these bills would reduce the tax on capital gains
for selected groups of taxpayers. Each aims at objectives of
capital formation and growth. These objectives are shared by the
Administration. But each bill has fatal flaws and either would
not achieve its stated objectives at all, or would do so in an
inefficient and inequitable manner. Accordingly, the
Administration strongly opposes all three bills.
I will devote the bulk of my testimony to S. 3065, the
"Investment Incentive Act of 1978". To say that this Bill and
its House counterpart have received extensive publicity is to
engage in understatement. Suddenly, like flowers that bloom in
the spring, the notion of reducing capital gains taxation is
appearing everywhere as an all-purpose solution to the country's
economic problems. Manifold and sweeping claims are made for
this idea: It is advertised as a technique of middle class tax
relief, or a measure to help homeowners. It is said that
reducing capital gains taxes will substantially increase stock
values. It is claimed that the Treasury will gain revenues by
cutting these taxes. We are told that this is the best way to
accelerate capital accumulation in the United States. Some even
claim that other economies outperform us because they avoid
taxing of capital gains.
This Administration shares the goals espoused by the
supporters of a capital gains tax reduction. We too wish to see
stock prices rise. We too are concerned about Treasury revenues?
and we are certainly as concerned as anyone about reducing the
federal deficit. We too are vitally interested in spurring
capital accumulation and investment, and believe that tax
B-1008
-2incentives are needed for this. We too are anxious to employ
every reasonable device to improve our performance with respect
to inflation, unemployment, and exports.
Our opposition to S. 3065, therefore, is based not on
disagreement with its goals. Rather we are persuaded that this
bill would not advance us toward these goals or would do so only
in ways that are inefficient, inadequate and unjust.
The tax reduction legislation that the Administration has
proposed this year would meet two broad objectives:
First, relief for the average taxpayers of this
country who are finding their incomes increasingly
pinched by rising tax liabilities.
Second, a broad and significant increase in the
after-tax return on capital, which will increase
business investments by making them more attractive.
Mr. Chairman, a dispassionate and objective analysis of S.
3065 shows that this bill and others like it would achieve
neither of these goals while wasting Treasury revenues urgently
needed to achieve these critical objectives in an efficient and
equitable fashion.
The Facts About Capital Gains Taxation Under Current Law
Under current law, the net capital gain of an individual
taxpayer is taxed at a rate equal to one-half of the taxpayer's
rate on ordinary forms of income, such as wages, salary,
dividends, interest, and rent. Those persons in tax brackets
above 50% need pay only the 25% alternative rate on the first
$50,000 of their net capital gains.
For corporations, net capital gains may be taxed at an
"alternative" 30 percent rate instead of the maximum 48 percent
rate on other income.
In addition to these basic provisions, the Tax Reform Acts
of 1969 and 1976 introduced two elaborations.
First, the 1969 Act imposed a "minimum tax" on those with
very large amounts of capital gains income or other income
benefitting from preferential provisions. After changes in the
1976 Act, the minimum tax for individuals is 15 percent of
preference income in excess of either $10,000 or one-half of
-3regular tax liability (whichever is greater). One-half of
capital gain is considered "preference income". Therefore, if a
taxpayer's only preference item is capital gain, the minimum tax
applies only if total gains exceed $20,000.
Second, the 1969 Act reduced the maximum tax rate on earned
income — wages and salaries — from 70 percent to 50 percent,
providing massive relief to high-income individuals. For these
persons, the amount of earned income eligible for this special
"maximum tax" ceiling is offset by the amount of preference
income, including the untaxed half of capital gains.
Now, what are the consequences of this structure of captial
gains taxation? Who pays what?
In 1978, capital gains taxes will raise $10.3 billion in
revenue, $7.8 billion from individuals and $2.5 billion from
corporations.
Let's look at the individual side of the equation, where
public attention has been concentrated.
The average effective tax rate on capital gains in 1976 was
15.9 percent. (See Table 1.) For most Americans with capital
gains, the effective rate is quite low: for instance, 12.7
percent for those between $20,000 and $30,000 in adjusted gross
income, 16.7 percent for those between $30,000 and $50,000. Up
to $200,000 a year, the effective rate is below 25 percent. Even
for those over $200,000 the average effective rate is only 27.4
percent.
Typically, therefore, the great majority of taxpayers pays
taxes on capital gains at modest levels, considerably below the
rate on ordinary earned or unearned income, and the
progressiveness of the capital gains tax is quite moderate. The
rate generally rises above 25 percent only where the taxpayer's
income or gains are extraordinarily large, and even in these
instances, the taxes are not at all extreme.
In the current debate, much has been made of the possibility
— under the maximum and minimum tax provisions enacted in 1969
and 1976 — that individuals may be paying a 50 percent tax or
even more on their capital gains. The facts are much less
alarming than the rhetoric. Capital gain, at all income levels,
is still very much a preference item in our tax system.
-4More than 60 percent of all capital gains " t a x e d at 25
percent or less. Of all returns showing capital gains, only
about 7 percent is taxed above 25 percent. Though in theory the
tax rate could exceed 50 percent, this would require a very
implausible composition of income, and in fact we have been
unable to find even one case where this has happened. We have
found fewer than 20 returns — out of 5.4 m i l l l o n ' e t " " « ^.lth
capital gains -- taxed at more than 45 percent. The capital
gains tax very rarely goes above 40 percent. Rates over 40
percent have appeared in less than five hundredths of one Percent
of returns with capital gains, involving less than four-tenths of
one percent of gains.
In sum, the Tax Reform Acts of 1969 and 1976 increased
capital gains taxes for very high income individuals with very
large gains, but these measures did not introduce unreasonable
marginal rates and they left capital gains in a clearly preferred
status.
The facts about S. 3065
This bill is not a general measure to reduce capital gains
taxes for everyone. Rather, it aims to reduce the capital gains
rate for the highest income individuals with the largest amount
of gains. As I have just noted, the overwhelming majority of
taxpayers, realizing the great bulk of capital gains each year,
pays substantially less than 25 percent on capital gains. This
bill is not designed for this vast majority. Its relief is
focused almost entirely on the small minority who^ now pays more
than 25 percent.
The bill would do the following. It would remove all
non-taxed capital gains income from the minimum tax, rather than
exempting the first $10,000 of untaxed gain (or one-half of
regular tax liability), as under present law. It would eliminate
the present capital gains offset against wage and salary income
eligible for the maximum tax. It would extend the 25 percent
alternative tax to an unlimited amount of gain, as opposed to the
$50,000 of gain eligible for this rate under present law.
Finally, it would reduce the "alternative" rate on capital gains
for corporations from 30 to 25 percent.
For these changes in the law, very expansive claims have
been made. We have examined those claims closely. Few of them
stand up against such analysis. At best, it can be said that
some of the claims can be neither proven nor disproven. For the
most part, however, the claims run flat against the available
evidence.
-5-
The proponents say that S. 3065 constitutes broad based tax
reduction, in line with the so-called "middle class tax revolt".
The facts are otherwise. About 20 percent of the bill's benefits
would go to corporations. For individuals, the bill's benefits
are skewed heavily to the highest income taxpayers. Four-fifths
of the bill's benefits go the those with incomes over $100,000 a
year. Mr. Chairman, this bill would provide lower taxes for less
than one-half of one percent of the individual taxpayers in this
country and would benefit only about 7 percent of the taxpayers
that have capital gains.
This is in truth a millionaire's relief bill, and I mean
income millionaires, whose assets are usually many times greater
than that. Of those million dollar earners benefitted by S.
3065, about 3,000 of them throughout the country, each would
receive on average $214,000 in tax reduction. For all million
dollar earners the average relief would be $145,000. By
contrast, the average relief for those in the $20,000 to 30,000
class would one dollar. (See Table 2.)
The bill's proponents assert that it would trigger a stock
market boom. The studies said to show this result simply assume
the fact, or rather they assume different facts. Bear in mind
that the bill would reduce taxes on corporate stock gains by only
$500 million. Yet, one study assumes the bill would raise stock
values by 40 percent, a rise of more than $300 billion or 600
times the size of the tax cut; another study suggests only a 4 to
6 percent rise in stock values, which is still 60 times the size
of the cut. A third study, which presumes total elimination of
the capital gains tax, rather than the selective cuts in S. 3065,
predicts a 20 percent rise in stock values. This is all the
sheerest conjecture. The truth is that no one has any credible
evidence or theory permitting a projection of the bill's impact
on the stock market, and certainly there is no basis for the
extreme assumptions that have dominated public discussion of the
bill.
If we look at recent stock market behavior, it is difficult
to avoid the conclusion that the effects of capital gains tax
changes, if any, are wholly swamped by other stock market
influences. The bill's proponents often suggest that the 1969
Tax Reform Act lies behind the stock market's doldrums during the
1970's. However, the stock market fell sharply in 19/69, before
the tax increases from the Reform Act took effect. Then the
market rebounded sharply from 1970 through 1972 — the same
-6period during which the reforms, were fully phased in. Then, as
inflationary momentum accelerated in 1973, there was a huge fall
in stock prices, though the tax law was not changed at all. (See
Chart 1.)
Analysis of stock market prices over the last ten years
shows no relationship between the capital gains tax and the
market's level. The record does not show that that the capital
gains tax changes in the Reform Acts of 1969 and 1976 depressed
stock prices. The assertion that repeal of those reforms would
now raise stock prices is just that, an assertion, unsupported by
evidence.
Proponents of S. 3065 have noted that it would provide
relief for homeowners forced to pay capital gains taxes upon sale
of their residences, in those instances where the gain cannot be
rolled over into purchase of a new residence. This aspect of the
measure, we wholeheartedly support. The President's tax package
provides nearly identical relief for homeowners.
A further claim of the proponents is that this bill would
greatly spur capital formation. Accelerating the rate of capital
formation — particularly industrial and technological investment
— is a priority objective of this Administration, but S. 3065 is
not the way to go about it.
Why is this so? The test of a tax cut for investment is how
generally and directly it reduces the tax burden on income from
productive capital. In applying this test, it is important to
keep in mind two facts. First, productive capital is taxed in
many ways — by the corporate income tax, the individual income
tax, the capital gains tax, etc.. We don't have a single, unique
tax on capital income; rather we have many taxes which together
place a burden on capital. Capital gains tax is not the major
tax on capital income. It accounts for only about 10 percent of
the federal tax burden on capital. (See Table 3.)
Second, the kind of capital we particularly need to
accumulate is industrial and technological capital. Many types
of assets — for instance jewelry, antiques, speculative real
estate, and the like — are of much less importance to our
economy's ability to adapt, grow, and compete in international
markets. The President's tax proposal takes these two important
facts into account. Through broad based reductions in corporate
and individual income tax rates, and through a liberalization of
the investment tax credit, the President's package would reduce
-7the major taxes burdening capital income by about $7 billion and
would directly increase the profitability and cash flow of all
productive enterprises. It is a package ideally suited to
increasing the rate of formation of productive capital.
By contrast, S. 3065 is very poorly suited to this job. As
I've noted, capital gains taxes constitute only about 10 percent
of the federal tax burden on capital income. Reducing the
capital gains tax would therefore deal with only a very small
corner of the problem. Furthermore, it is in many respects the
wrong corner. Only about one-quarter of realized capital gains
come from corporate stock. The rest are scattered over a range
of assets having little or no role to play in the kind of
investment boom this country needs. For instance, another
quarter of the realizations is on real estate sales, 3.4 percent
on livestock, 2.5 percent on commodities, 9.7 percent on
installment sales, etc. (See Table 4.) This bill would create
windfalls on assets all over the landscape, but it would largely
detour around the central objective, which is to reduce
significantly and broadly the tax burden on income from
productive investment. This bill takes a very inefficient
approach to capital formation.
This inefficiency is a fatal flaw for the simple reason that
we do not have unlimited revenues available to stimulate capital
formation. To keep the budget deficit in bounds, the
Administration believes next year's total tax reduction should
not exceed $20 billion. The bill before you would take up over
$2 billion of that amount. This would have to come at the
expense of wage and salary earners, which would be clearly
inequitable, or at the expense of the corporate income tax
reductions, which would render the bill a much less effective
vehicle for capital formation. The only other choice is to
increase the budget deficit, which would be an inflationary and
irresponsible course.
The proponents of S. 3065 try to avoid this dilemma by
asserting that their bill, unlike the myriad other tax cuts
promoted in the Congress, would in fact increase Treasury
revenues.
The reasoning behind this assertion has never been made
clear. As is often the case with this subject, we are dealing
here with conjecture, not facts.
It is important, in assessing the revenue claims, to
distinguish between three different time horizons: the very
short term, the medium term, and the long term.
-8-
In the short term, the revenue impact of S. 3065 would turn
on the so-called "unlocking" effect. With a cut in maximum
capital gains rates, it is possible, at least in theory, that
some taxpayers would sell assets that they had held for a very
long time. Whether and how much this would occur, no one knows.
If it did happen, two results would follow. First, the wave of
selling might well depress asset prices, on the stock market and
elsewhere. This would tend to reduce capital gains tax revenues.
Second, the wave of selling would itself generate tax revenues.
The net effect on revenues of these conflicting forces, no one
can predict. But one thing is clear: It would be a temporary,
one-shot effect.
The wave of selling would not repeat itself
year after year.
In the medium term, any tax reduction will stimulate
rggregate demand — investment and consumption — and therefore
tend to increase GNP toward its potential level, creating a
"feedback" of tax revenues to the Treasury. There is absolutely
no reason to think that S. 3065 would create larger feedback
effects than any other cut in capital income taxes. Indeed, such
feedback effects are much less certain with capital gain taxes
that with the corporate income tax cuts proposed by the
President. Cutting corporate rates and liberalizing the
investment tax credit would directly increase enterprise profits
and cash flow, and thus real investment and tax revenues. The
advocates of S. 3065 hold out the hope — no more — that a
capital gains tax cut would substantially boost stock values and
that this in turn would trigger a large amount of new investment,
with a consequent rise in tax revenues. But, as I have
indicated, there is no perceptible relationship between capital
gains taxes and the level of the stock market, and a capital
gains tax cut of this size is most unlikely to affect the stock
market substantially. Unfortunately, it is equally difficult to
trace a causal relationship between the level of the stock market
and the rate of increase of investment or GNP. Both points in
the argument are thus very shaky. For the medium term, the
revenue feedback effect of a capital gains tax reduction is
anyone's guess.
In the long term — the most important perspective — tax
revenues depend on the sustainable growth rate of the economy.
In other words, the revenue feedback will be greater the more
efficiently the tax cut boosts the long term trend of investment
in productive assets and enterprises. It is precisely here that
S. 3065 is most seriously defective. It scatters its benefits
over a wide array of assets, many of little productivity, and it
-9misses entirely 90 percent of the tax burden on capital income.
It is a very poor tool for increasing the economy's long term
rate of real growth, and its long term revenue feedback effects
would be commensurately modest.
Finally, I wish to say a word about the very loose
international comparisons that have been made in the debate on
this measure. Some proponents of S. 3065 have suggested that our
economic performance — in areas of inflation, unemployment, and
growth — has fallen short of that of Germany and Japan because
we tax capital gains while they, assertedly, do not. This line
of argument ignores certain important facts. First, the United
States has over the past few years outperformed most other
industrialized countries, including Germany and Japan, in terms
of real growth and increases in employment. Our inflation record
is less satisfactory, but is nonetheless superior to several
countries (e.g. Italy) having no capital gains tax. Second,
Japan does in fact tax captial gains. As for Germany, it instead
uses an even more comprehensive tax on annual increases in
wealth, whether or not realized; I doubt that the proponents of
S. 3065 would prefer the German system to ours. What all this
shows is that making simplistic international comparisions on a
tax-by-tax basis is a very treacherous business.
In sum, Mr. Chairman, the claims made for S. 3066 do not
stand up to scrutiny:
The bill would not provide general or middle income tax
relief but would instead narrowly focus its benefits on
the highest income classes and would provide an
unprecedented boon to millionaires.
The bill has no realistic potential for creating a
substantial rise in stock prices.
. The bill would not efficiently meet our urgent needs for
more investment in productive enterprises.
The bill would not gain us revenue but would instead use
up revenue needed for far more efficient and equitable
incentives for capital formation.
There are of course many variations of S. 3065 qnder
discussion in the other Chamber. I will not deal with them in
detail. Some of the proposals escape certain problems I have
noted here. However, those involving an effective repeal of the
minimum tax so far as capital gains are concerned have the same
-10defects as S. 3065: they are very expensive, and they focus their
benefits on a narrow class of extremely high income individuals,
with the result that many of those persons would pay very little
tax. As the President has indicated, this is an unfair and
ineffective response to the need of American workers and
businesses for genuine tax reduction.
Comments on S. 2428
I turn now to S.
Preservation Act
small businesses
available on the
2428, the "Small Business and Farms Capital
of 1978." This bill would extend to certain
a tax-free rollover privilege similar to that
sale of a principal residence.
We believe such a rollover provision would be inequitable.
Owners of businesses already enjoy enormous tax benefits. As a
business grows and prospers, and its market value increases, the
owners do not have to pay current tax on this appreciated value.
A person receiving income in the form of wages, interest on a
savings account, or stock dividends must first pay taxes before
setting aside funds for future use. The business owner increases
his wealth with before-tax dollars, while the wage earner
increases his wealth with after-tax dollars. In addition, the
owner of a business, when he sells, has the advantage of
preferred capital gains rates. Further, any bunching of income
resulting from the tax deferral can be alleviated by income
averaging, made available for capital gains by the Tax Reform Act
of 1969, and by the use of installment sales.
S. 2428 would provide yet another valuable tax break to
those who already benefit from a number of preferential
provisions. This raises serious questions of fairness.
Apart from considerations of equity, this proposal would
raise considerable problems of compliance and administration.
Some problems occur now with the tax-free rollover privilege
afforded taxpayers on their personal residences. Individuals are
asked for more information and computations than are generally
required, and such data must be retained for very long periods of
time. The complexity would be aggravated substantially by the
rollover contained in S. 2428. Recordkeeping and computation
burdens could be monumental where a taxpayer has several
qualifying asset sales and purchases with overlapping one-year
reinvestment periods.
-11The Congress has allowed the extraordinary rollover
privilege for principal residences because of the peculiar social
value of home ownership. We think it would be a major error in
tax policy to begin extending this privilege, piece by piece.
Very soon, other types and classes of taxpayers would be
demanding this preference, and a wholesale erosion of the tax
base would result.
Comments on S. 2608
This bill seeks correction for the appreciation of nominal
asset values caused by inflation. It attempts this by excluding
from taxable income a percentage of realized capital gains — a
percentage that would increase with the length of time the asset
had been held. The rationale is simple and understandable. It
seems unfair to many that taxes should be paid on gains that are
"paper gains" only, the product of inflation.
Unfortunately, there is no easy way to solve this problem.
While S. 2608 is concerned with "illusory income" in the case of
capital gains, the same issue arises with all types of income
from capital and with debt. A balanced program of indexing
income for inflation would require at least four adjustments.
Taxpayers would increase the basis of capital assets by
the rate of inflation.
Owners of savings accounts and other interest-bearing
obligations would deduct the loss resulting from the
inflation-induced decline in their assets' real value.
Businesses would be allowed to increase their basis in
computing depreciation deductions and inventory profits.
Debtors would report income whenever inflation reduced
the real value of their indebtedness.
Obviously, an indexation system that included these four
elements would be extremely complicated; but going only part way
would create new inequities among taxpayers. For example, it is
difficult to justify an inflation adjustment for owners of stock
and real estate while ignoring the effect of inflation on the
savings account depositor. Nor would a system be just that
allowed the holder of debt-financed property to adjust the
asset's basis for inflation while making no allowance for the
f
act that the debt was being repaid with cheaper dollars.
-12There is, however, a more fundamental problem with the
notion of indexation. It deals with the symptoms and not the
disease itself. Indexation is a response to high inflation
rates, but the proliferation of indexation schemes tends to make
those rates an accepted fact of economic life. These schemes
to ?nl?»M« tltUtl °l! al Jf e -he d e f e c t - ^ther than accommodating
to inflation, we should, in my judgment, bend all efforts to
eliminate it.
f apital
9ains i^exing were desirable, S. 2608 would
no. n^^i ^
not provide the proper means of implementing such a system ?hZ
most appropriate inflation adjustment would be to inhale'the
basis of capital assets by the rate of inflation rather than L
exclude a fraction of the gain from income during a plrioS Cf
proPorJJS; n f h n S b i i i i n S t e a d e x ^ ^ e s from tax a larger
proportion of gain the longer the asset has been hPlrt \-ha
mechanism should work in t L opposite Ly. Shi abSlite amount
however tSraL2ai; d°SS ri5e
aS the holding
P«iod lengthens
nowever, the absolute size of the real gain also rises
A* A
0
be S h W n
#
r'ealto ^?* " " "
°
«the«at!c«lly t£at SJ raJio of
9a
aSSet
W U 1 increas
is Lid
^uS lL°l^t
* the longer an asset
SyStem
f
radu
perverse.
° 9
ati°n would be
Conclusion
have exoffin^LT08!,"1686 three bills on the ^rits, as I
nave explained at length. But we also object to them for »
incol'taxluon in"686 ^^f aPPr°aCh «>« pSbiS-'oTcS ta*l
federal taxes Sn 2«J<Ei " * a"d ad h ° C m a n n e r ' T h e v " i o ^
the corporate^ income tax ' S ^ " t h e C a p i * a l g a i n s Pulsions,
income - 1 L 1 ™
i*l' ? t h f P e r s o n a l income tax on property
Treas ry ^ " e n g a g e ^ T ? ^
^
m
r blemS
Ur eC n my faces and
will cSnt°Le to fLe ^ver thi°" S °
°
°°
'
study my closes? personal attention V n f o ^ * ?" 2 ^ i n ? t M S
ITt^t™^ &?V"^ ^ns^nV^xerlise.
income taxation -- a J h l t i J i r K f o J ^
* t r U C t U ? e °f C a p i t a l
nowhere. The whole L r u ^ n J i •?? u y ° U d ° "" w i l 1 9 e t U S
inequitable? inefficient »«H Y i n K b e c o m e t h a t m u c h m o r e complex,
will lose revenues
«
" H e r f l " I n th e process, we
investment incentives
TI ZJ
t
*?* m ? r e e f f i c i e " t
tax, what is rlquirJI'is a S m , a E ^ P ? r l V l t h t h e C a p i t a l g a i n S
to capital income
a o gene?allj *"*c o m P r e h e n s i v e «PP"«ch
-13-
For that task, the Congress needs more than the few months
remaining in this very busy legislative session. The proper
agenda for this year is to take relatively simple and efficient
steps to cut capital income taxes across the board, as the
President has proposed. There is no question that this would
best serve the needs of the economy and the long term interests
of the American people.
Thank you for this opportunity to present the
Administration's views.
Table 1
Income T a x on Capital Gains - 1976 Levels
Adjusted gross
income
class
($000)
Less than 5
Total
capital
gains
(...$ millions...)'v (.
$
Effective tax
Tax
•**" rate on r' "
liability
capital gains
$ millions. .V.y^'O .;. percent...)
2,697
*1;3%
$
34
5 -
10
2,872
3.8
10 -
15
3,571
^7 7$ 269
15 -
20
3,418
326
'9, 5
20 -
30
5,281
672
12'iJ
30 -
50
6,105
1,019
16,J
50 - 100
5,537
1,234*
22..3
100 - 200
3,613
898
24 .9
5,939
1,625
27 .4
$39,034
$$6,187
200 anc1 over
Tot£
Office of the Secretary of t h e Treasury
Office of T a x Analysis
110
15 .9%
June 2 7 , 1978
Table 2
Distribution of Individual Tax Reductions Under S. 3065
(19 78 Income Levels)
Average Percentage Distribution
Expanded Income Class
Tax Benefit
of Tax Benefit
Less than $15,000
12*
0.4
$15,000-20,000
25*
0.2
$20,000-30,000
$1
0.8
$30,000-50,000
11
4.0
$50,000-100,000
158
13.7
$100,000-200,000
783
14.2
$200,000-500,000
4,,000
15.7
$500,000-1,000,000
21,,540
11.3
$1,000,000 & over
145,r302
39.7
Total
$
19
100.0%
Table 3
Tax Liability on Capital Gain Income Compared to
Tax Liability on All Capital Income
(1978 Levels)
($ billions)
Tax liability on all capital income:
Corporate tax liability
Individual tax liability
Total
63.8
36.8
100.6
Tax liability on capital gain income:
Corporate
Individual
Total
2.5
7.8
10.3
Capital gain tax as a percent of total taxes on capital income 10.2%
Office of the Secretary of the Treasury
Office of Tax Analysis
June 20, 1978
Note: Total capital income consists of corporate profits, dividends,
interest, rents, royalties, the portion of partnership and
sole proprietorship incane attributable to capita!, and
capital gains.
Table 4
Shares of Capital Gains and Losses by Asset Type - 1973
Asset
Type
Financial Assets
(Stocks and bonds)
Gains
0nl
Y
28.8 %
Losses
Only
55.5 %
:
Gains and
:Losses Combined
17.1 %
Partnership, Fiduciaries,
and Small Business
Corporations
Prior Year Installment
Sales
8.5
7.2
9.7
*
Liquidation Distributions
2.6
0.4
3.6
Residences 10.8
0.0
15.5
Nonbusiness Real Estate 8.1
1.3
11.1
Timber 0.5
9.0
14.0
*
0.7
Retirement Plan
Distribution
1.8
Commodities, including
future
2.5
8.2
*
Involuntary Conversions
1.1
0.5
1.4
Trade or Business Assets
3.7
1.1 .
4.9
Business and Rental
Building
3.8
0.0
5.5
Livestock
3.4
0.2
4.8
Farm Land and Property
0.7
0.3
0.8
14.0
25.1
9.1
Other Assets
TOTAL
Memorandum
Corporate Stock Only
100
%
26.1
2.6
100
%
51.9
100.0 %
14.8
Office of the Secretary of the Treasury
June 15, 1978
Office of Tax Analysis
* Less than 0.05 percent
Note: Details may not add to total due to rounding.
Standard & Poor's 094
500 Stock Index
and Capital Gains
Tax Changes
1
1955-1978
1
60
62 64 66 68 70 72
74 76 78
r
UmntofthelRtASURY
LlN6T0Nt D.C. 20220
T E L E P H O N E 566-2041
June 28, 1978
FOR IMMEDIATE RELEASE
RESULTS OF AUCTION OF 15-YEAR 1-MONTH TREASURY BONDS
The Department of the Treasury has accepted $1,757 million of
$4,131 million of tenders received from the public for the 15-year 1-month
bonds auctioned today.
The range of accepted competitive bids was as follows:
Lowest yield
Highest yield
Average yield
8.62% 1/
8.63%
8.63%
The interest rate on the bonds will be 8-5/8%
the above yields result in the following prices.
Low-yield price 100.008
High-yield price
Average-yield price
At the 8-5/8% rate,
99.924
99.924
The $1,757 million of accepted tenders includes $377 million of
noncompetitive tenders and $1,380 million of competitive tenders
(including 96% of the amount of bonds bid for at the high yield) .
1/ Excepting 5 tenders totaling $67,000
B-1009
itfotmtntoftheJREASURY
WASHINGTON. D.C. 20220
TELEPHONE MM041
••••••••Hi
FOR IMMEDIATE RELEASE
June 29, 1978
Contact:
George G. Ross
202/566-2356
TREASURY RELEASES FIRST REPORT ON
U. S. CORPORATIONS IN PUERTO RICO
The Treasury Department today released its First Annual
Report on the Operation and Effect of the Possessions
Corporations System of Taxation. A "possessions corporation"
is a U. S.-chartered company operating in Puerto Rico,
American Samoa, Guam, the Panama Canal Zone or certain other
U. S. possessions.
The body of the Report deals almost exclusively with
Puerto Ricof which accounts for 98 percent of the combined
book income of all possessions corporations. Possessions
corporations since 1948 have been exempt from Puerto Rican
income, property and certain other taxes. Recent revisions
in the Puerto Rican tollgate tax on dividends paid to U. S.
parent corporations, and in the Industrial Incentive Act, will
substitute low rates of effective taxation for total tax
exemption.
Until 1976, possessions corporations were also exempt
from Federal income taxes under Section 931 of the Internal
Revenue Code. The Tax Reform Act of 1976 put the possessions
corporations under a new Section 936, which continued the
exemption from Federal taxes for income earned in Puerto Rice
and the other possessions, but encouraged the repatriation to
the United States of dividends which could not be profitably
reinvested in the possession.
Because the operation and effect of the possessions
corporation tax system was not completely understood in 1976,
the Congress asked the Treasury Department to begin reporting
annually, not only on the systenfe effect on tax revenues, but
also on its impact on investment and employment in Puerto Rico
and the possessions. The first report covering calendar year
1976 was to be submitted to the Congress by June 30, 1978.
The primary findings of the Report are;
- The Federal tax expenditure in calendar year 1977
is estimated to be $698 million. This expenditure
has grown from $255 million in 1973. In recent years,
half of the tax savings have been realized by
pharmaceutical companies.
B-1010
(MORE)
- 2 -
- In the manufacturing industries, the Federal
tax expenditure averaged $7,428 per Puerto Rican
employee in 1975, which was slightly larger than
the average total compensation of those employees.
For pharmaceutical companies, the Federal tax
saving represented $34,873 per Puerto Rican
employee; for all manufacturers except pharmaceuticals, the Federal tax saving per employee
averaged about $4,100.
- The measured benefit Puerto Rico receives increases
if account is also taken of possessions corporations1
local purchases of goods and services, and the
subsequent "multiplier" effect on Puerto Rican
gross national product. The benefit for
Puerto Rico per dollar of Federal tax expenditure
continues, however, to vary from one industry to
another.
- The impact of changing from Section 931 to 936 in
1976 is difficult to separate from contemporary
and subsequent changes in Puerto Rican tax laws
and other economic factors. Throughout 1977, new
investment in Puerto Rico and repatriation of
dividends to the United States was slow, but the pace
of both has picked up in 1978. Portfolios of financial investments have also been restructured;
investments in Eurodollar assets have been replaced
by investments in Puerto Rican and U. S. assets.
The increase in Puerto Rican investments has not,
however, had an apparent impact on long-term interest
rates or on credit conditions in Puerto Rico.
An appendix to the Report summarizes the possessions
corporation system of taxation as it relates to American
Samoa, Guam and the Panama Canal Zone. In addition, an essentially similar system of taxation covered by Section 934 of
the Code affecting U. S. corporations operating in the Virgin
Islands is described.
Copies of the Report are available for purchase from
the Superintendent of Documents, U. S. Government Printing
Office, Washington, D. C , 20401. When ordering, use Stock
o
0
o
Number 048-000-00315-0.
The Operation and Effect
of the Possessions Corporation
System of Taxation
First Annual Report
Department of the Treasury
June 1978
The Operation and Effect of the
Possessions Corporation System of Taxation
First Annual Report
Department of the Treasury
June 1978
For sale by the Superintendent of Documents. U. S. Government Printing Office
Washington, D. C. 20402 Stock No. 048-000-00315-0
THE SECRETARY OF THE TREASURY
WASHINGTON
JUN 2 9 1978
Dear Chairman Ullman:
The Report of the Committee on Ways and Means on H.R.
10612 (Public Law 94-455), The Tax Reform Act of 1976,
provides that "the Treasury is to submit an annual report to
the committee setting forth an analysis of the operation and
effect of the possessions corporation system of taxation,"
and that the reports are to be submitted within 18 months
following the close of the calendar year, with the first
report covering calendar year 19 76.
Pursuant to that provision, I hereby submit the first
annual report entitled, "The Operation and Effect of the
Possessions Corporation System of Taxation."
I am sending a similar letter to Senator Russell B. Long
Chairman of the Committee on Finance.
Sincerely,
W. Michael Blumenthal
The Honorable
Al Ullman, Chairman
Committee on Ways and Means
House of Representatives
Washington, D.C. 20515
Enclosure
THE SECRETARY OF THE TREASURY
WASHINGTON
JUN 2 9 1978
Dear Chairman Long:
The Report of the Committee on Finance on H.R. 10612
(Public Law 94-455), The Tax Reform Act of 1976, provides that
"the Treasury is to submit an annual report to the committee
setting forth an analysis of the operation and effect of the
possessions corporation system of taxation," and that the
reports are to be submitted within 18 months following the
close of the calendar year, with the first report covering
calendar year 1976.
Pursuant to that provision, I hereby submit the first
annual report entitled, "The Operation and Effect of the
Possessions Corporation System of Taxation."
I am sending a similar letter to Representative Al Ullman,
Chairman of the Committee on Ways and Means.
Sincerely,
W. Michael Blumenthal
The Honorable
Russell B. Long, Chairman
Committee on Finance
United States Senate
Washington, D.C. 20510
Enclosure
Table of Contents
Page
Chapter I.
Chapter II
Introduction and Summary
Puerto Rican and Federal Income
Tax Law — Past and Present
A. Industrial Tax Exemption in
Puerto Rico
B. Section 931 of the U.S. Internal
Revenue Code
C. Section 936 of the U.S. Internal
Revenue Code
D. The Puerto Rican Tollgate Tax
Act
and the New ofIndustrial
E. Allocation
Income andIncentive
Deductions
1
8
8
9
11
13
18
Chapter III. Economic Impact
24
A. Puerto Rican Economic Development
B. Characteristics of Possessions
Corporations
C. Linkages and the Multiplier
1. Backward Linkages
2. The Multiplier
3. Direct, Indirect and
Total Effects
4. Forward Linkages
D. Impact of Changing from Section 931
to Section 936 and of Restructuring
the Tollgate Tax
1. New Investment in Puerto Rico
2. Repatriation of Dividends
3. Financial Portfolios
E. Possible Impact of the New Industrial
Incentive Act
Appendix A — Operation of the Possessions
Corporations System of Taxation in
American Samoa, Guam, the Panama
Canal Zone and the Virgin Islands
Appendix B — Sources and Limitations of the Data
and Statistical Data for 1973 and
1974
Appendix C — Tax Forms from which Data Included
in this* Report was Obtained
24
35
43
44
51
52
55
55
57
63
64
68
70
81
91
List of Figures and Tables
Page
Figure I:
Total and Per Capita Gross National
Product of Puerto Rico, 1948-1977
(Constant 1974 Dollars)
25
Figure II
Total Government Expenditures plus
Net Investment of Public Enterprises,
Own Source Revenue Plus Federal Taxes
Covered Over, Federal Grants-in-Aid,
and Total Borrowing of Puerto Rico,
1960-1977
Figure III: Current Status of 149 Exemption Decrees
Granted Between 1960 and 1962 and
Utilized by Recipient Firms
Table 1:
Table 2:
Table 3
Table 4:
Table 5
Table 6
Table 7:
29
34
Federal Tax Expenditure Estimates
and Projections, Possessions
Corporation Provisions
Federal Transfer Payments, Grants,
"Covered Over" Taxes, and Tax
Expenditure on Possessions Corporations
in Puerto Rico, Fiscal Years 1968 and
1977
Total Manufacturing Employment in
Puerto Rico, by Major Industry Group:
Average for Calendar Years 19 73 to
1977 and April 1978
Major U.S. Manufacturing Corporations
Claiming a Reduction in Income Taxes
in Excess of 2.4 Percent of Book
Income Because of Section 931 or
936 of the Internal Revenue Code
Income and Estimated Tax Expenditure
by Industry, 1975
28
33
36
38
Tax Expenditure, Employment and
Compensation of Employees by Industry,
1975
*
41
Tax Expenditure, Employment and
Compensation of Employees by Size
of Tax Expenditure Per Employee, 19 75
42
Paae
Table 8:
Table 9:
Table 10:
Table 11:
Table 12:
Table 13:
Table 14:
Expenditures on Materials, Labor, Plant,
and Equipment as a Percent of the
Value of Production by Manufacturing
Establishments in Puerto Rico, 1972
Tax Expenditures as a Percent of
Compensation of Employees, of Direct
Expenditure in Puerto Rico, and of Direct
and Indirect Expenditure in Puerto
Rico, for Manufacturing Industries
Destination of Shipments by Puerto Rican
Manufacturing Industries, 1972
56
Income and Estimated Tax Expenditure by
Industry, 1976
58
Tax Expenditure, Employment and
Compensation of Employees by Industry,
1976
60
Tax Expenditure, Employment and
Compensation of Employees by Size of Tax
Expenditure Per Employee, 19 76
61
Elections under Section 936 by
Industry
62
Table 15: Estimated Composition of Financial
Investments by 936 Corporations in
Mid-1977
Table 16:
45
Sales of Bonds by the Government
Development Bank for Puerto Rico,
October 1976 - May 1978
54
65
66
Table A-l: Income and Estimated Tax Expenditure
by Possession, 1975
73
Table A-2: Average Payroll and Employment for Tax
Exempt Industries in the Virgin Islands,
FY 1975
79
Table A-3: Virgin Islands' Tax Incentive Program
Subsidy Claims, Fiscal Years 1975 and
1976
80
Paae
Table B-l:
Income and Estimated Tax Expenditure
by Industry, 1974
85
Table B-2:
Income and Estimated Tax Expenditure by
Industry, 1973
86
Table B-3:
Tax Expenditure, Employment and
Compensation of Employees by Industry,
1974
87
Tax Expenditure, Employment and
Compensation of Employees by
Industry, 1973
88
Table B-4:
Table B-5:
Table B-6:
Tax Expenditure, Employment and
Compensation of Employees by Size of
Tax Expenditure Per Employee, 1974
Tax Expenditure, Employment and
Compensation of Employees by Size of Tax
Expenditure Per Employee, 19 73
89
90
CHAPTER I.
INTRODUCTION AND SUMMARY
In 1975 and 1976, Congress considered a series of
proposals to change Federal taxation of
income
from
exporting and foreign
investment.
Having
at
first
contemplated repeal of section 931, which exempted from
Federal taxation the income of companies incorporated in the
United States* but operating primarily in Puerto Rico,
American Samoa, Guam, and the Panama Canal Zone, Congress
instead passed a new section 936.
The new section was
intended to maintain tax incentives to invest in Puerto Rico
and the possessions, but to encourage U.S. companies to
bring money home to the United States if it could not be
profitably reinvested in the local economy.
Replacing
section 931 with 936 was expected to reduce the Federal tax
expenditure attributable to the possessions corporation
system of taxation by $10 million in calendar year 1977,
roughly 4 percent of the then
estimated
total
tax
expenditure of 5285 million.**
The operation and effect of the possessions
corporation system of
taxation
were
not
completely
understood. Thus, the staff of the Joint Committee on
Taxation, adopting similar language to that used in the
Reports of the House Committee on Ways and Means and the
Senate Committee on Finance, stated
in
its
General
Explanation of the Tax Reform Act of 1976:
*Although Puerto Rico and the possessions are included in
some definitions of the United States, for convenience of
exposition the term "United States" in this Report will mean
only the fifty states and the District of Columbia. The
Panama Canal Zone was never a U.S. possession, but has been
treated as such under the U.S. Internal Revenue Code.
**See Special Analysis F, "Tax Expenditure," in Special
Analyses of the Budget of the United States Government for
Fiscal Year 1977 (January, 1976), and "Estimates of Federal
Tax Expenditures," Prepared for the Committee on Ways and
Means and Committee on Finance by the staff of the Joint
Committee on [Internal Revenue] Taxation, (March 15, 1976).
2
«8-508O-78-2
-2"It is the understanding of Congress that the
Department of the Treasury is to review
the
operations of section 936 corporations in order
to apprise Congress of the effects of the changes
made by the Act. The Treasury is to submit an
annual report to the Congress setting forth an
analysis of
the operation and effect of the
possessions corporation system of taxation.
Among
other things, the report is to include an analysis
of the revenue effects to the provision as well as
the effects on investment and employment in the
possessions. These reports, which are to begin with
a report for calendar year 1976, are to
be
submitted to the Congress
within
18
months
following the close of each calendar year."*
The body of this First Annual Report deals almost
exclusively with Puerto Rico. Various Committee reports and
other Congressional documents relating to the possessions
corporation system of taxation reflect Congress1 primary
concern with the impact on Puerto Rico, and as indicated in
Table 1, Puerto Rico accounts for over 98 percent of the tax
expenditure associated with section 931 or 936 of the
Internal Revenue Code. Appendix A of this Report describes
the system of taxation as it affects American Samoa, Guam,
and the Panama Canal Zone.
The tax exemption for U.S.
corporations operating principally in the Virgin Islands is
delimited by section 934, which was unaffected by the Tax
Reform Act of 1976. Because the Virgin Islands is also a
possession, and because section 934 has many features similar
to those of section 931 or 936, the taxation of U.S.
companies operating in the Virgin Islands is also described
in Appendix A.
In Puerto Rico, the possessions corporation system
builds upon and reflects the complex interaction of the tax
laws of the United States and those of the Commonwealth. This
Report first reviews those tax laws and then undertakes an
economic analysis of their impact. The review begins with
Puerto Rico's Industrial Incentive Acts, which have provided
*Pages 277-8. from
exemptions
income,
property,
and
other
taxes
-3Table 1
Federal Tax Expenditure Estimates and Projections,
Possessions Corporation Provisions 1/
(millions of dollars)
Year
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
Reduction in Calendar
Year Tax Liabilities
: Conpanies Operating in:
:
:A11 Other U.S.
Total :Puerto Rioo : Possessions
255
368
440
634
698
673
741
814
896
985
1,084
250
362
437
630
693
668
735
808
889
978
1,076
5
6
3
4
5
5
6
6
7
7
8
Fiscal Year
Receipts Foregone 2/
Conpanies Operating in:
:A11 Other U.S.
Puerto Rico Possessions
239 3/
289
390
498
663
687
703
774
850
936
1,029
234 3/
284
385
495
659
682
698
768
844
929
1,022
5 3/
5
5
3
4
5
5
6
6
7
7
Office of the Secretary of the Treasury
Office of Tax Analysis
1/ The 1973 through 1975 figures are estimates based on income data taken primarily
from election forms (Form 5712). The 1976 figures are estimates based on the
1975 to 1976 growth rate of income by broacl industry groups for those companies
for which data for both years was availablfe. The 1977 figures are estimates
based on the 1976 to 1977 increase in manufacturing employment in Puerto Rioo.
Figures for 1978 and all subsequent years are projections based on an assumed 10
percent growth rate. All figures are based on the assumption that in the
absence of the possessions corporation provisions, the income of possessions
corporations would be subject to an effective Federal corporate tax rate of 40
percent. For conpanies operating in Puerto Rico, the calendar year 1973 through
1977 figures are net of estimated tax payments to Puerto Rico; the figures for
1978 and subsequent years are net of an assumed 5 percent effective Puerto Rican
(corporate plus tollgate) tax rate. Note that the section 936 credit, which
applies in 1976 and subsequent years, is based on tax liabilities computed
without regard to such tax preferences as the investment tax credit, or with
regard to Puerto Rican taxes, which are taken into account in computing the tax
expenditure figures. Therefore, the actual section 936 credit claimed will
exceed the tax expenditure figure for the corresponding year.
2/ Calculated on the basis of normal relationships between calendar year corporate
tax liabilities and fiscal year receipts. Fiscal years through 1976 end on June
30 of the corresponding calendar year; thereafter on September 30. The
transition quarter in 1976 is not shown separately. The receipts estimate for
that quarter is $95 million.
V Reflects in part reduced calendar year 1972 tax liabilities, which are estimated
to have been 10 percent lower than the estimates shown for 1973.
-4for corporations manufacturing in Puerto Rico, passes to
section 931 of the United States Internal Revenue Code, and
then describes section 936.
The Report next describes Puerto Rico's tollgate tax on
dividends paid to U.S. parent corporations, a tax which was
changed in 1976 in anticipation of the enactment of section
936. The discussion then moves to the reform of the
Industrial Incentive Act and the further modifications of
the tollgate tax passed and signed into Puerto Rican law in
June 1978.
Finally, section 482 of the U.S. Internal
Revenue Code, which guides the allocation of income and
deductions between related entities is reviewed.
Although
section 482 has broader application than the possessions
context, it is critical to the possessions corporation
system of taxation.
These Federal and Commonwealth tax provisions must be
assessed against the backdrop of Puerto Rico's economic
development. The economic growth of the Commonwealth from
the late 1940's to the early 1970's has been termed an
"economic miracle."
Even after
adjusting
for
price
inflation, Puerto Rican income per capita grew at an average
rate of 5 percent per annum. In the 1970's, however, real
income per capita began to decline as the economy remained
in a long recession, and many Puerto Ricans returned from
the United States. The rate of unemployment, which had
declined steadily through the 1960's to just over 10 percent
of the measured labor force, went up to more than 20 percent
in 1976 and 1977. And, were it not for the substantial
increase in net Federal transfer payments to Puerto Rican
individuals and Federal grants to Puerto Rican governments,
the Puerto Rican recession of 1973-77 might have been much
deeper. In late 1977 and the first half of 1978, the Puerto
Rican economy has begun to recover; by April 1978 the
unemployment rate had been reduced to 16.5 percent, its
lowest rate since May 1975.
The reasons for Puerto Rico's extended recession are
many. The U.S. economy, to which Puerto Rican industry is
closely linked, underwent a milder recession in 1973-74, and
has not grown rapidly since. The Puerto Rican petrochemical
industry suffered from the sharp increase in the price of
foreign oil in 1973-74 and the consequent suspension of
Federal oil import quotas. The construction industry has
been hard hit by higher construction and interest costs and
-5the sharp decline in demand for new condominiums.
The
traditional Puerto Rican industries, such as textiles,
apparel and shoes, have had to compete with the sharp
increase in U.S. imports of these goods from low-wage
foreign countries.
The increasing competitiveness of foreign exports to
the United States has accelerated a change in the industrial
composition of U.S. companies operating in Puerto Rico. At
least prior to the recent effective dates of the Orderly
Marketing Agreements limiting shoe exports from South Korea
and Taiwan, and the Multifiber Arrangements limiting textile
and apparel exports from eighteen developing countries,
companies manufacturing such products in Puerto Rico were
reluctant to keep existing plants open, much less to
construct new ones.
Because Congress in 19 76 emphasized its desire to
continue assisting Puerto Rico in obtaining employmentproducing investments, the Treasury has matched income tax
return information with employment and payroll information
for
individual
possessions
corporations.
For
all
manufacturing industries, the Federal tax expenditure per
Puerto Rican employee averaged $7,428 in 1975, which was
slightly larger than the average compensation (wages or
salary plus other benefits),
$7,300,
of
possessions
corporations' employees. Tax expenditure per employee or as
a percentage of
total
employee
compensation
varies
substantially from industry to industry. For pharmaceutical
companies the tax expenditure represents almost $35,000 per
employee, or approximately three and a half times the total
compensation of the comparatively well paid pharmaceutical
employees. At the low end of the spectrum were many of the
traditional labor-intensive industries where the Federal tax
expenditure usually averaged less than $3,000 per employee.
For all manufacturers other than pharmaceuticals, the tax
expenditure averaged about $4,100, which was 50-60 percent
of those employees' average compensation.
In addition to the employment and payroll directly
attributable
to
possessions
corporations, Puerto Rico
receives indirect benefits from this system of taxation.
Manufacturing requires raw materials, intermediate goods,
and services, a portion of which are supplied by the local
economy. New investment in plant and equipment creates jobs
-6in the construction and capital equipment
industries.
Workers in all industries spend their salaries on goods and
services, which has a "multiplier" effect on the Puerto
Rican economy. Including the estimated value of these
"backward linkages" and multiplier effects significantly
increases (and arguably overstates) the measure of the total
benefit Puerto
Rico
receives
from
the
possessions
corporation system of taxation.
Because all industries
exhibit backward linkages and have a multiplier impact on
the local economy, the ratio of this broader measure of
Puerto Rican benefits to Federal tax expenditure varies from
industry to industry, much as the narrower measures do.
The impact of changing from section 931 to 936 is
difficult to separate from the effects of changes in the
Puerto Rican tollgate tax, which became effective on the
same date, and from other contemporary events. The rate of
new investment and of dividend payments was very slow
throughout 1977. In early 1978, the Puerto Rican government
approved a number of new applications for tax exemption,
many of which may have been either delayed during 1977 or
accelerated by the anticipated announcement of the new
Industrial Incentive Act. Dividend payments have
also
accelerated in 1978; as of early June, more than $1.4
billion in dividends have been declared, giving rise to $48
million in Puerto Rican tollgate taxes. Several changes in
1977 in the tollgate tax rules (especially the exemption for
dividends paid out of non-^Puerto Rican income) reduced the
effective rate from the statutory 10 percent to less than 5
percent.
Because section 936 benefits are not available for
income earned outside the possession where the corporation
has a trade or business, but do apply to "qualified
possessions
source
investment
income,"
possessions
corporations have had to restructure their substantial
portfolios of financial assets. Eurodollar deposits
have
been replaced by substantial investments in Puerto Rican
banks, Puerto Rican mortgages guaranteed by the Federal
Government National Mortgage Association (GNMA), loans to
other 936 companies, tax-exempt bonds (including Puerto
Rican) and the preferred shares of U.S. corporations. To
date, the special provision for "qualified possessions
source investment income" does not appear to have had a
material impact on long-term interest rates or credit
conditions for the average Puerto Rican borrower.
-7The June 1978 changes in the Puerto Rican Industrial
Incentive Act and the tollgate tax are complex and will not
become fully effective until 1979.
Preliminary analysis
suggests, however, that the combined efffective rate of
income and tollgate taxation may be approximately 5 percent.
If so, and if the level and composition of investment by
possessions corporations and other aspects of their behavior
are not materially affected by this tax increase, the
Federal tax expenditure will be reduced in 1978 and the near
future by one eighth (because the Federal taxes foregone
will represent 35 percent, rather than the
currently
estimated 40 percent, of pretax income).
-8CHAPTER II. PUERTO RICAN AND FEDERAL INCOME
TAX LAW — PAST AND PRESENT
A. Industrial Tax Exemption in Puerto Rico
The modern history of industrial tax exemption in
Puerto Rico begins in 1948.
Prior to that year, Puerto
Rican development strategy stressed government ownership and
operation of key industries, such as
cement,
glass,
paperboard, and shoes. When the financial requirements of
such a program were recognized, Puerto Rico shifted the
emphasis to private enterprise. Tax exemption became the
keystone of an industrial incentive program that also
included providing plants at low rent, cash grants to cover
start-up costs, and low interest loans.
The Industrial
Incentive Act of 1948 offered qualified firms an exemption
from income, property, and municipal taxes, while the excise
tax act exempted raw materials, machinery, and equipment
used in manufacturing for export or
sold
to
other
manufacturers in Puerto Rico.
Originally, it was contemplated that the period of
total exemption would end in 1959, with the exemption rate
falling to 75 percent, 50 percent, and 25 percent in 1959,
1960, and 1961, respectively. All exemptions were to end in
1962. Tax exemption was restricted to items not produced on
a commercial scale in Puerto Rico prior to 1948 and to
certain other specified items, such as wearing apparel and
processed food products. The 1948 legislation also provided
for exemption from Puerto Rican taxes for a distribution of
dividends to a parent outside Puerto Rico if the parent was
unable to claim a foreign tax credit for the withholding
tax. Finally, liquidation of an exempt company would be tax
free, provided that the liquidating company was at least 80
percent owned by its parent.
Many firms established plants in Puerto Rico in the
early 1950's in response to these incentives. Textiles were
the fastest growing industry, but shoes and other leather
goods, and assembly of mechanical, electrical and electronic
devices were also important. After a few years, however, a
tax exemption with a 1959-1961 phaseout
became
less
attractive, and, in 1954 the Industrial Incentive Act was
amended.
-9The 1954 Act provided for a ten-year exemption for new
applicants. Because an established firm could lose its
exemption, but a new applicant could qualify for a ten-year
exemption, the 1954 Act sought to limit the ability of an
old firm to obtain a new grant. If a firm received a new
grant of exemption for a product produced under an old
grant, the new grant would be terminated if the level of
output in the predecessor operation was reduced.
In
addition, plant, equipment, and other property that had been
used in the production of an exempted product could not be
used by another enterprise to produce a similar exempt
product. Both prohibitions were subsequently weakened, and
the Governor had the power to waive them if ne deemed it to
be in the public interest.
As the 1950's drew to a close and some of the original
grantees approached the end of their exemption periods,
pressure for further revisions in the Industrial Incentive
Act began building. An expanded Industrial Incentive Act
was adopted in 1963, offering exemptions for periods of 10,
12, 15, 17, or 25 years, depending on the degree of economic
development of the zone in which the plant was located.
In
addition, a partial exemption for up to twice the length of
the original grant could be elected. A company could
postpone the start of the exemption period for two years and
90 days after its first payroll, which permitted it to save
the exemption for profitable years, rather than wasting it
during the period of start-up losses.
In the early 1970's, Puerto Rico redefined the
tax-exemption zones and lengthened some exemption periods
(exemptions of 10, 15, 25, or 30 years became available). An
amendment was introduced classifying passive income from
certain financial investments in Puerto Rico as "industrial
development income," benefitting from the same tax exemption
as trade or business income.
This provision sought to
encourage the possessions corporations to invest a larger
portion of their earnings in Puerto Rico.
B
* Section 931 of the U.S. Internal Revenue Code
The essential elements of section 931 of the Internal
Revenue Code of 1954 became part of U.S. law as section 262
of the Revenue Act of 1921. Proponents of this legislation
had sought exemption for any U.S. corporation deriving at
26
8-508O.78-3
-10least 80 percent of its income from foreign sources.
They
stressed the competitive disadvantage of American firms in
comparison to their British rivals.
English law deferred
taxation on foreign income until it was remitted to England,
while the United States taxed the foreign income of U.S.
corporations as it was earned.*
The proponents settled
ultimately for an exemption for firms deriving income from
U.S. possessions.
The reduction in the coverage of this legislation, from
the whole world to the U.S. possessions, is not
as
astonishing as it might seem. The demand for exemption came
primarily from a group of U.S. firms then operating in the
Philippines (a U.S. possession in 1921). They argued that
tax exemption would encourage export trade to the Far East
from the U.S. base in the Philippines, while at the same
time reducing the incentive for the U.S. firms operating
there to reincorporate outside the United States. Little
attention was paid to the effect of this law on the
Philippine economy; Puerto Rico was virtually ignored in the
public debate.
Under the terms of section 931 (as subsequently
amended) a U.S. corporation deriving at least 80 percent of
its gross income from sources within a U.S. possession
(currently Puerto Rico, American Samoa, Guam, the Panama
Canal Zone, and certain other areas) and at least 50 percent
of its gross income from the active conduct of a trade or
business therein could exclude from its gross income for
Federal tax purposes all foreign-source income except that
received within the United States. The corporation had to
meet the 80 percent and 50 percent tests for the current and
preceding two taxable years (or less if it was just
initiating operations). Corporations that satisfied these
requirements came to be called "possessions corporations,"
"931 corporations," or sometimes simply "931's".
Such
corporations were usually organized as subsidiaries of U.S.
parent companies in order to assure that 80 percent of gross
*At
the had
time,
companies
preferred not to
income
itsU.S.
source
in one or generally
more possessions.
incorporate subsidiaries under
foreign
laws;
foreign
operations were initially conducted through either a branch
of the U.S. parent or a U.S.-chartered subsidiary.
-11A 931 corporation would often operate at a loss for the
first year or two. (Even an older corporation that had been
profitable could suffer a loss from time to time.) In 1971,
the Tax Court ruled that a company was not "receiving the
benefits" of section 931 in a year in which it lost money,
so it could join its
parent
and
other
affiliated
corporations in filing a consolidated return for such a
year. The owner of a 931 thus avoided taxes in profitable
years but was able to offset any loss against other, taxable
income in unprofitable years.
A 931 corporation usually avoided earning or receiving
any taxable income within the U.S. and, thus, was wholly
exempt from federal taxation on its earnings.
In the
majority of cases the 931's were engaged in manufacturing
activity that qualified them for exemption from Puerto Rican
taxes as well. Thus, for the period of the Puerto Rican
exemption (10 to 30 years) the 931 had a tax holiday.
In the United States, however, the parent corporation
could not claim a dividends-received deduction for dividends
from a 931, so the dividend would be taxable upon receipt by
the parent. To avoid payment of this tax, the typical 931
accumulated its earnings, investing them (tax free) in the
Eurodollar market. (Because the income was not taxable as
earned, the company was not subject to
the
Federal
accumulated earnings tax.) After a number of years (usually
at the end of its period of Puerto Rican tax exemption) the
931 would be liquidated into its parent. If it was at least
80 percent owned by a U.S. corporation (as was generally the
case), the liquidation was free of any federal income tax.
So, although the parent had to wait for the liquidation to
receive the accumulated earnings, those earnings would be
free of either Puerto Rican or Federal income taxes.
C Section 936 of the U.S. Internal Revenue Code
The Tax Reform Act of 1976 removed possessions
corporations from section 931 and placed them in a newly
created section 936.
The primary differences
between
sections 931 and 936 are:
-121. The method of effecting the exemption changed:
instead of excluding income, section 936 provides i
credit to offset any U.S. tax on income from the active
conduct of a trade or business in a possession, or or
"qualified possessions
source
investment
income"
(interest, dividends, and other types of passive income
earned on funds invested for use in a possession ir
which a trade or business is actively conducted).
Because the section 936 credit offsets the U.S. tax
liability on this income, a 936 corporation cannot alsc
claim a foreign tax credit for taxes actually paid with
respect to such income. A foreign tax credit offsets
U.S. taxes only on income ineligible for the section
936 credit.
2. The dividends-received deduction can be
claimed, so the parent pays no tax on dividends
received from a wholly owned 936 subsidiary.
This is
true not only for dividends paid out of current
earnings, but also for
dividends
from
earnings
presumably accumulated while the subsidiary qualified
under section 931. Because the parent is entitled to
the dividends-received deduction, it cannot claim a
foreign tax credit for a withholding tax on the
dividend.
3. The subsidiary must elect the benefits of:
section 936, and that election is irrevocable for 10;
years. During this period it cannot join with its;;
parent in filing a consolidated return, although it can
delay electing 936 status until profitable
years
begin.
Although most observers in 1976 appeared to believe*
that section 936 would make investing in Puerto Rico more,
attractive than it had been under section 931, the change
had negative, as well as positive, components. On the one
hand, section 936 does not allow possessions corporations to
avoid Federal taxes on Eurodollar and other foreign income,
as section 931 had. On the other hand, a primary obstacle
-13to paying dividends (and, thus, an inducement to accumulate
earnings) was removed by allowing the parent a dividends
received deduction.*
In explaining its motives, Congress cited its desire to
leave undisturbed the tax exemption of earnings from a trade
or business in Puerto Rico or from investments made with
those earnings for use in Puerto Rico. At the same time,
Congress desired to end the exemption for passive income
from funds invested in foreign capital markets and to hasten
their repatriation.
Congress stated that it wanted to
"assist the U.S. possessions in obtaining
employmentproducing investments by U.S. corporations, while at the
same time encouraging those corporations to bring back to
the United States the earnings from these investments to the
extent they cannot be reinvested productively in
the
possession."**
D. The Puerto Rican Tollgate Tax and the New Industrial
Incentive Act
Prior to October 1, 19 76, the Puerto Rican government
imposed a 15 percent tollgate tax on dividends paid out of
Puerto Rican income from hotels, manufacturing and shipping
to any corporation without significant business of its own
in Puerto Rico,
but only if that nonresident parent
corporation could claim a foreign tax credit for the tollgate tax. In the United States a foreign tax credit was
available until 1976, but because dividends were rarely
paid, the tollgate tax was rarely applicable, and the
foreign tax credit little used. Anticipating the passage of
section 936 and the other Federal provisions relating to
*The dividends-received deduction eliminates the need to
liquidate a possessions corporation to repatriate earnings
free of Federal taxes; in the past liquidation was often
accompanied by an actual cessation of operations
and
discharge of workers. The provisions of Puerto Rican law
which lead to this regretable practice were ameliorated, but
not wholly eliminated, in the recent (June 1978) reforms of
the Industrial Incentive Act.
**Report of the Committee on Ways and Means, U.S. House of
Representatives, on H.R. 10612, Report No. 94-658,
November 12, 19 75, pg. 255; and Report of the Committee on
Finance, United States Senate, on H.R. 10612, Report No.
94-938, June 10, 1976, pg. 279.
-14possessions corporations, the Puerto Ricans in 1976 modified
their tollgate tax in two important ways.
The rate was
reduced from 15 to 10 percent, and the tax became applicable
to U.S. shareholders, even though they were denied a foreign
tax credit. The two changes taken together had the effect
of subjecting dividends paid to nonresident U.S. parent
corporations to a 10 percent Puerto Rican tax.* Although the
tax rate seemed low, the potential source of dividends
included not only new income earned under section 936, but
also earnings accumulated under section 931.
Although the 10 percent tollgate rate instituted in
1976 remains, the effective rate has been subsequently
reduced by a series of amendments and rulings. In summary:
1. Dividends paid out of accumulated "931"
industrial development income (i.e., income earned
prior to October 1, 1976) are subject to a tollgate tax
of 7 percent, rather than 10 percent, if no more than
25 percent of the balance at the beginning
of the
year is paid out and a matching 25 percent is invested
in designated Puerto Rican assets in that
year.
Designated
Puerto Rican
assets
include
working
capital, deposits in Puerto Rican banks, Puerto Rican
government bonds, mortgages insured by the Puerto Rican
Housing Bank and Finance Agency, and loans or other
*The 10 percent tollgate tax does not apply to a resident
parent corporation (e.g., a
U.S.
manufacturer
which
wholesales and retails its products in Puerto
Rico).
Dividend payments to such a corporation would, however,
initially be subject to the regular Puerto Rican income tax,
which has a maximum statutory rate of 45 percent.
The 85
percent dividends-received deduction in Puerto Rico would,
however, reduce the effective rate on dividends from a
possessions corporation
to
such
a
resident
parent
corporation to no more than 6.75 percent (45 percent of 15
percent). Thus, a U.S. parent corporation resident in
Puerto Rico is taxable in Puerto Rico on its dividend income
from a possessions corporation, but the effective rate of
taxation is less than the 10 percent tollgate tax applicable
to dividends paid to nonresident U.S. parent corporations.
-15guaranteed mortgage bonds executed by any government
pension or retirement plan.
Thus, part
of
the
accumulated earnings may be brought home subject to a
reduced tollgate tax rate if a matching amount from
such earnings is invested in designated assets.
2. Dividends paid out of accumulated "936"
industrial development income (i.e., earned subsequent
to October 1, 1976) are subject to a tollgate tax of 7
percent, rather than 10 percent, if no more than 75
percent of such income is paid out and if at least 25
percent of such income is reinvested in the designated
Puerto Rican assets for a period of at least 8 years.
3. Dividends paid out of income from interest on
the designated Puerto Rican assets are exempt from the
tollgate tax.
4. A credit equal to 3 percent of new investment
(made subsequent to the later of March 31, 1977 or the
second year of tax exemption) in buildings and other
structures used in manufacturing is allowed against the
tollgate tax.
In December 1977, the Puerto Rican Treasury issued
regulations clarifying the exemption paid out of non-Puerto
Rican income earned outside Puerto Rico (e.g., Eurodollar
investments). As long as a company has both undistributed
earnings from Puerto Rico and earnings from foreign sources,
a dividend is deemed to consist of 50 percent exempt
foreign-source income. That is to say, the tollgate tax in
these instances equals 5 percent of the total dividend.
In March 1978, Governor Romero Barcelo made his long
awaited proposals for restructuring the Industrial Incentive
Act; after debate and minor revisions, the Puerto Rican
legislature enacted the Governor's program on June 2, 1978.
The primary features of the new legislation are:
1. New grants will exempt from taxation only a
declining fraction of income; that fraction is 90
percent in the first five years, 75 percent in the
sixth through tenth years, 65 percent in the eleventh
to fifteenth years, and 55 percent the sixteenth to the
-16twentieth years. The first $100,000 of real property
will be exempt from property tax, and the remainder
will be exempt in the same proportion as income is.
When the original grant expires, the company may
apply for a ten year extension. If the extension is
granted, 50 percent of income may be excluded for the
first five years; for the second five years, between 35
percent and 50 percent may be excluded, the exact
percentage depending on the location of the investment
in Puerto Rico.
2. Companies earning less than $500,000 may also
exclude the first $100,000 of income from taxation;
companies earning more than $500,000 have no such
exemption (the exemption applies
to
the
entire
controlled corporate group).
Corporations ineligible
for, or not claiming, the $100,000 exemption may,
however, deduct an amount equal to 5 percent of
production-worker payroll costs. This extra payroll
deduction cannot exceed 50 percent of otherwise taxable
income.
3. The regular tollgate tax will be reduced to 5
percent for funds reinvested in designated Puerto Rican
assets and withdrawn according to
the
following
schedule: 10 percent may be withdrawn annually for
five years, and the remaining 50 percent may be
withdrawn at the end of the five years.
The list of
designated assets was expanded to include investment of
earnings in the company's own business or in paying off
its own debt.
4. Upon liquidation, a 4 percent tollgate tax
will apply to accumulated Puerto Rican income. In the
past, accumulated Puerto Rican income was exempt from
the tollgate tax if distributed upon liquidation of the
company.
5. Export-oriented service industries (architectectural, insurance, engineering, management consulting
firms, etc.), which had been fully taxable under prior
law, will be able to exempt 50 percent of their
export-service income, providing that 80 percent of
their employees are residents of Puerto Rico and 80
-17percent of the cost of the
Puerto Rico.
services
was
incurred
in
The new law also contains provisions permitting
currently tax-exempt corporations to elect to move to a
partially exempt status. The election, which may apply to
either the current or the coming fiscal year, must be made
when the corporation files its Puerto Rican income tax
return for the fiscal year which includes December 31, 1978.
Thus a possessions corporation whose fiscal year corresponds
to the calendar year could elect in April 1979 (the usual
filing date) to become partially taxable for either 1978 or
1979. If 1979 is elected, then the first return indicating
taxes actually due would be filed in April 1980.
The election is subject to the following provisions:
1. During the years remaining until the end of
the existing grant, the following percentages of income
will be exempt from tax:
Years Left on
Original Grant
0-4 years
5-8 years
9-12 years
13-16 years
17-20 years
More than 20 years
:Maximum Effective
Exemption :
Tax Rate
Percentages:
(percent)
73.3
77.7
85.5
90.0
91.0
93.3
12,,0
10.,0
6,,5
4.,5
4.,0
3.,0
After the period of original exemption has expired,
the companies electing this option are automatically
entitled to operate partially exempt from taxation for
ten more years. During the first five of those ten
years, 50 percent of income will be exempt; during the
second five years, between 35 percent and 50 percent
(depending on the location of the investment) of total
income will be exempt.
2. Companies with six or more years remaining on
their current tax exemption may make an alternative
-18election. They may exclude 90 percent of their income
from taxation and credit two thirds of their net income
taxes paid against the post-conversion tollgate tax
imposed on dividends paid from current
earnings.
Companies electing this second option may apply for a
ten-year extension when the current grant expires, but
the extension is not automatic.
3. For all companies, 50 percent of all tollgate
taxes paid on distributions of income earned before
converting to partial exemption are creditable against
the post-conversion income tax liability.
Dividends
will also benefit from special reductions in the
tollgate tax. Accumulated earnings will be subject to a
4 percent tollgate providing that pre-1973 earnings are
paid out over a two-year interval, and that 1973-1977
earnings are paid out over a five-year interval (no
more than 10 percent can be paid out in each of the
five years, and the balance at the end). Income earned
in 1978 or thereafter will be subject to a reduced 5
percent tollgate, providing each year's income is paid
out according to the five-year schedule just described.
All earnings whose distribution is deferred to benefit
from a reduced tollgate tax rate must be invested in
designated Puerto Rican assets, in plant and equipment
to be used in Puerto Rican industrial development, or
in retiring the principal of the company's debt.
4. Finally, textile, apparel and shoe producers
whose exemption grants expire within the next five
years are automatically entitled to a 90 percent tax
exemption for an additional five years.
The probable effects of these changes are analyzed
below.
E. Allocation of Income and Deductions
Under section 482 of the Internal Revenue Code, the
Internal Revenue Service may reallocate income, deductions
or credits among two or more corporations under common
ownership so as to prevent evasion of taxes. Nowhere has the
application of section 482 been more controversial than to
transactions between a U.S. parent and its possessions
corporation.
-19Section 482 cases involving possessions corporations
first surfaced in the 1950's.
In
determining
what
percentage of a subsidiary's income came from a possession
rather than the United States, the Internal Revenue Service
had initially ruled that exports from the subsidiary to the
parent could be priced so as to attribute to the parent only
the profit margin normally earned by
an
independent
distributor. In some, but not all, cases, the Service
subsequently clarified its initial ruling to indicate that
it applied only to the 50 percent and 80 percent tests of
eligibility for section 931 benefits. Some other income
allocation rule would be used under section 482 to determine
the tax liability of the parent.
In August, 1959, Governor Munoz Marin of Puerto Rico
formally protested to the Secretary of the U.S. Treasury
that Puerto Rico was not a tax haven, but that the Internal
Revenue Service's 482 position was hurting Puerto Rico's
ability to attract U.S. investment. Furthermore, because a
few 931 subsidiaries of U.S. parents never had a Puerto
Rican tax exemption, and because many exemptions would
expire in the future, section 482 cases might diminish
Puerto Rican tax collections.
Although
the
Federal
government never accepted the Governor's proposal that a
Federal-Commonwealth unit (analogous to
the
competent
authority procedures incorporated into many bilateral tax
treaties) be established for resolving transfer-pricing
disputes, pending section 482 cases were suspended from 1961
to 1963 while the Internal Revenue Service reviewed its
transfer pricing standards.
In the early 1960's the Treasury and Internal Revenue
Service were increasingly aware of transfer-pricing problems
in taxing foreign income, and Puerto Rico presented an acute
case of a more general problem. Although the new rules set
forth by the Service in early 1963 were applicable only to
transactions between possessions corporations and their U.S.
parent, the 1963 rules became the foundation for the
generally applicable section 482 regulations issued five
years later.
The 1963 guidelines noted four situations where an
improper shifting of profits might occur and a section 482
adjustment would be appropriate.
-201.
When the
parent for exports.
931
subsidiary
overcharged
its
2. When the 931 subsidiary sold to an independent
third party, but derived a benefit from some intangible
asset belonging to the parent (e.g., a patent or
trademark) without paying an appropriate fee or royalty
to its parent.
3. When the parent undercharged its subsidiary for
raw materials or component parts
furnished by the
parent.
4. When the parent incurred a direct expense
on behalf of its subsidiary without charging it back
to the subsidiary.
In determining appropriate transfer prices, the general
standard was always to be the arm's-length price, that which
would have applied to a comparable transaction between
unrelated parties.
In any given instance, the specific
methods for applying the general standard were ranked as
follows:
1. Directly Applicable Independent Prices. In some
instances, the subsidiary or the parent may sell the
same product to, or buy the same product
from,
independent parties. If so, the price used in these
transactions should also be used for the inter-affiliate
transactions.
2. Independent Prices for Similar Products. Even
though
the
parent
and
the
subsidiary
deal
exclusively with one another, the same or similar
product may be bought and sold by others at an
identifiable price. This price should be used only if
the first method cannot be applied.
3. Other Methods. If the two prior methods availed
nothing, then the parent should establish how much the
product would have cost if purchased from an independent
U.S. manufacturer.
This price would
include
all
relevant U.S. costs of production plus a reasonable
profit margin.
-21Under this last method, if a product
could
be
manufactured in Puerto Rico and shipped to the United States
more cheaply than it could be manufactured in the United
States (for example, because Puerto Rican labor is usually
cheaper than mainland labor), the additional profit from
manufacturing in Puerto Rico would be allocable to the
subsidiary. If the opposite were the case (for example,
because transport costs were higher), the Puerto Rican
subsidiary would earn less than a U.S. manufacturer would.
The most difficult and contentious cases, the 1963
ruling noted, typically
involve
intangible
property:
patents, trademarks, brand names, access to established
marketing and distribution channels, and goodwill with
customers. For example, in the pharmaceutical industry,
manufacturing and distribution costs are a small fraction of
the selling price.
The large profit margins reflect a
return on valuable intangibles, such as a patent on the
product. The value of a patent may, in turn, reflect
substantial outlays for past research and development.
If
R&D is to be economical, the ultimate profits must cover not
only the cost of the projects yielding commercial products
but the "losers" as well.
Regardless of whether current
profits represent a low, reasonable or high return on past
R&D, the tax saving of assigning those profits to a
tax-exempt subsidiary can be substantial.
Because the total profit margin (i.e., that on
manufacturing and distribution) often includes an implicit
return on patents, trademarks, goodwill, etc., appropriate
transfer prices can be established only by first determining
whether the mainland parent or the 931 affiliate owns the
intangibles. In some instances, an intangible asset could
not possibly be owned by the affiliate (for example,
goodwill with customers based on the parent's own marketing
and distribution effort). In others, the intangible could
have been transferred (for example,
exclusive
patent
rights), but for one reason or another was not, so the
parent, not the subsidiary, was still entitled to the return
on it. Only if the intangible property truly belongs to the
subsidiary could the transfer price appropriately allocate
the return on the intangible to the subsidiary.
These 1963 guidelines did not fully satisfy the
companies and the Puerto Rican government.
The companies
-22had not engaged in careful tax planning in the past and had
not taken care to transfer ownership of relevant intangibles
to the subsidiaries.
The Internal
Revenue
Service's
guidelines would have resulted,
in
many
cases, in
substantial reallocations of income to the parent. An
Internal Revenue Service Manual Supplement implementing the
1963 guidelines was held in abeyance from 1965 to 1968, and
section 482 cases involving possessions corporations were
again
suspended.
Finally,
in
1968,
comprehensive
regulations implementing, section 482 were issued, as was a
revenue procedure allowing companies to follow the 1963
revenue procedure instead of the 1968 regulations (with
respect to Puerto Rican transactions only) if the results
were more favorable.
Although at least one major case
dating back to the 1950's remains unresolved twenty years
later, the logjam of unresolved cases was really broken in
1968.
Section 482 has, however, remained a problem. The 1963
revenue procedure did not necessarily preclude parents from
allocating
substantial
income
to
their
possessions
corporations, but did force the companies to lay a careful
legal foundation for those allocations.
After 1963, the
creation of the subsidiary was usually accompanied by the
execution of legal documents irrevocably assigning exclusive
patent and other rights to the newborn company.
Seeing that the 1963 revenue procedure and the 1968
regulations did not materially reduce profit shifting, the
Internal Revenue Service has brought a case against Eli
Lilly involving a possessions corporation established to
manufacture Darvon. Because Eli Lilly executed the legal
documents purporting to effect the transfer of intangibles,
the argument that the Service has traditionally used in such
cases, that the parent and not the subsidiary is entitled to
the return on the intangible, will be much more difficult to
make. The Service must either argue that the original
transfer of the patent was a sham and can be disregarded or
find a new legal basis for denying the company the tax
benefits it has claimed.
Concerned by the transfer-pricing disputes, the current
Governor of Puerto Rico, Carlos Romero Barcelo, has recently
written the Secretary of the U.S. Treasury to protest that
the Internal Revenue Service's practices are inhibiting
Puerto Rico's ability to attract new investments through its
-23tax exemption program. Furthermore, because some companies
do not have a complete exemption, and because all are
subject to the tollgate tax, the Governor maintains that the
Internal Revenue Service's position could erode the Puerto
Rican tax base. The Governor urges that the Treasury review
the Service's practices and reaffirm its 1963 guidelines.
In summary, then, the allocation of income between a
U.S. parent and its tax-exempt possessions corporation has
been a source of contention for the last twenty years.
Because the income in question has usually been exempt from
Puerto Rican taxation, the threat of double taxation has
until recently been remote.
Successive
Puerto
Rican
Administrations have argued, however, that the Service's
proposed reallocations would seriously jeopardize the Puerto
Rican industrial development program.
With the recent
changes in the Industrial Incentive Act and the tollgate
tax, the potential for double taxation will become more
immediate.
-24CHAPTER III.
ECONOMIC IMPACT
A. Puerto Rican Economic Development
Although a full review of Puerto Rican economic
development since 1947, the year of the initial Industrial
Incentive Act, is beyond the scope of this study, a summary
is useful in placing the possessions corporation system of
taxation in perspective. Puerto Rico's economic growth after
1947 has often been called an "economic miracle."
Figure I
traces the growth in Puerto Rican gross national product in
dollar and per capita terms (adjusted for price inflation)
from 1947 to 1977.*
The population statistics used in determining national
product per capita reflect not only birth and death rates,
but also net migration from Puerto Rico (in recent years,
more Puerto Ricans have returned to Puerto Rico than have
moved to the mainland). Between 1947 and 1972, Puerto Rican
total and per capita GNP grew at average annual growth rates
of better than 6 percent and just under 5
percent,
respectively. By any historical or international yardstick,
this was a remarkable performance.**
*In interpreting these and other statistics on Puerto Rico,
the reader should be aware of the distinction between gross
national product and gross domestic product. Gross domestic
product equals gross national product plus Puerto Rican
income earned by foreign residents, such as possessions
corporations, less income earned by Puerto Rican residents
from foreign sources (the primary example being wages paid
to Puerto Rican employees of the Federal Government). Gross
domestic product is a measure of the total value of all
goods and services produced in Puerto Rico in a particular
year, whereas gross national product is a measure of the
value of the production and income earned by residents of
Puerto Rico. Largely because of the growth of high-profit
possessions corporations, the ratio of gross
national
product to gross domestic product has declined from 99
percent in 1960 to 90 percent in 1972 and to 81 percent in
1977.
**Over this same quarter century, real GNP in the United
States grew at an annual rate of 3.7 percent, and GNP per
capita at a rate of 2.2 percent.
-25-
FIGURE I
Total and Per Capita Gross National Product of Puerto
Rico, 1947-1977 (Constant 1974 Dollars)
Total
(left scale)
6,000
5,000
Dollars
T 2,400
2,200
Per Capita
2,000
(right scale)
1,800
1,600
H 1,400
1,200
2,000
1,000
800
600
1,000
iq. '
^
1
1
1
•w/ 48
'50
'52
'54
_J
'56
1
1
1
1
1
1
1
1
1
'58
'60
'62
'64
'66
'68
70
'72
74
Source: Puerto Rico Planning Board
268 5
- °8 0 - 7 8 - 5
1—|—
76
77
-26Explanations for this success are many.
In the late
1940"s and 1950's, Puerto Rican labor was very cheap by U.S.
standards: per capita incomes were low, unemployment and
underemployment were high, and
federal
minimum
wage
standards did not fully apply.
U.S. manufacturers found
Puerto Rico attractive compared
to
low-wage
foreign
countries. Puerto Rico was inside the U.S. tariff wall and
offered a more stable political and economic climate than
countries in Latin America or the Far East.
Puerto Rico's
tax exemption was important not only in boosting U.S.
investors' profits, but also in symbolizing the
less
tangible, but equally important, differences between Puerto
Rico and developing countries.
Several studies have concluded that tax exemption has
been crucial in inducing firms to locate one or more of
their operations in Puerto Rico during the past 30 years.
Company surveys conclude repeatedly that the attraction of
"100 percent tax exemption" was the leading factor in most
firms' decision to locate in Puerto Rico. Such findings can
be overstated, for some firms now operating under an
exemption probably would have been operating even without
one. Nevertheless, while it would be difficult to determine
how much manufacturing investment would have gone into
Puerto Rico had a tax exemption not been available, the
level and composition of
Puerto
Rican
manufacturing
investment surely reflects three decades of tax exemption.
Puerto Rico's remarkable economic growth decelerated
sharply in the 1970's. As one can see in Figure I, real GNP
slowed its growth in 1974, declined in 1975, remained more
or less stagnant in 1976, before increasing in 1977. Because
of the influx of native Puerto Ricans returning from the
United States, Puerto Rican GNP per capita declined steadily
from 1973 to 1977.
The traditionally high
rate
of
unemployment in Puerto Rico, which had been gradually
reduced to just over 10 percent in the late 1960's, started
edging up in the early 1970's, and went to 21.5 percent in
April 1977. As explained more fully below, the Puerto Rican
economy began a recovery in late 19 77 and early 19 78, and in
April 1978, the unemployment rate was back down to 16.5
percent.
-27The prolonged recession in the Puerto Rican economy
would have been deeper had it not been for offsetting
expenditures by the Federal and Commonwealth governments.
Total Federal transfers to Puerto Rico increased almost
tenfold beween 1968 and 1977 — see Table 2. By 1977, net
Federal transfers directly to individuals (the bonus value
of food stamps, net social security and medicare payments,
veterans benefits, etc.) of $1.2 billion represented 15
percent of personal income, which was two and a half times
the 6 percent average for the United States.
Net Federal
transfers to individuals plus grants to Puerto
Rican
governments represented 25 percent of Puerto Rican GNP in
1977, also two and a half times the 10 percent U.S.
average.
The efforts of the Commonwealth government to cushion
the recession on the Puerto Rican economy are reflected in
Figure II. Total spending by the Puerto Rican government
plus investment by public enterprises went from $1.5 billion
in 1970 to $2.8 billion in 1974, a 90 percent increase in
four years. (In recent years the Puerto Rican government
has taken over the telephone company, the sugar industry,
and other private enterprises, and investment spending by
public enterprise has become an instrument of
public
finance.) Until 1968, total public sector borrowing never
exceeded $100 million per year; by 1975, new public sector
borrowing exceeded $600 million.
Higher interest costs
forced the former and the current Administrations to cut
back on their rate of net new borrowing.
By 1977, new
borrowing was down to $300 million, and the premium Puerto
Rico has paid to market its bonds has been pared.
The reasons for the prolonged recession of the Puerto
Rican economy are many.
First and most obviously, the
Puerto Rican economy is closely tied to the U.S. economy.
Roughly 45 percent of Puerto Rican gross domestic product is
exported to the United States, so recessions in the U.S.
economy, such as those in 1969-1971 and 1974-75, are
transmitted to Puerto Rico. Puerto Rico's ability to offset
economic fluctuations through its own monetary or fiscal
policy is limited. With the dollar as its currency and a
free flow of capital between San Juan and New York, Puerto
Rico has no real control over local interest rates or the
-28Table 2
Federal Transfer Payments, Grants, "Covered Over"
Taxes and Tax Expenditure on Possessions Corporations in Puerto Rioo,
'
Fiscal Years 1968 and 1977 1/
(Millions of dollars)
FY 1968
Net Federal transfer payments to individuals, total 2/
Food stamps
Old age, survivors, and disability insurance
Veterans benefits
Unemployment compensation
All other
Federal grants to Puerto Rican Commonwealth and
municipal governments, total
Child nutrition and special milk programs
Human development 3/
Office of Education programs
Public assistance
Community development block grants
Low rent public housing
Employment and training programs
All other
Federal taxes "covered over" to Puerto Rican
treasury, total
Customs duties
Alcoholic beverage and tobacco excises
Federal tax expenditure on possessions corporations
TOTAL
_68
—
1
59
1
7
: FY 1977
1/235
610
295
185
87
58
31
15
11
7
54
716
81
48
67
59
49
48
150
214
93
27
66
223
60
163
99
659
389
2,833
129
5
6
—
Office of the Secretary of the Treasury
Office of Tax Analysis
Sources:
U.S. Department of the Treasury, Federal Aid to States: Fiscal Year
1977, and the Statistical A p p W H v *-r> <-h^figrrehary'sAnnual Report
for 1968; Office of the Governor, Commonwealth of Puerto Rico,
Economic Report of the Governor (various years); and U.S. Department
of the Treasury estimates.
1/ In 1968 both the Federal and Puerto Rican fiscal years ended on June 30, and
therefore all data for FY 1968 is based on the same time period. In 1977,
however, the Federal fiscal year was changed, beginning on October 1, 1976
and ending on September 30, while the Puerto Rican fiscal year again ended
on June 30. With the exception of certain Federal transfer payments, all
data for 1977 is based on the Federal fiscal year.
2/ All transfer payments are net of associated payments by or on behalf of
current or future recipients, such as employer, employee, and
self-employment contributions for QASDI.
3/ Formerly, "child" development.
-29-
FIGURE II
Total Government Expenditures Plus Net Investment of
Public Enterprises, O w n Source Revenue Plus Federal
Taxes Covered Over, Federal Grants-in-Aid, and Total
Borrowing of Puerto Rico, 1960-1977
$ Millions
4.000 r
1960 '61
'62 '63 '64 '65 '66 '67 '68 '69 7 0
Source: Puerto Rico Planning Board
'71 '72 '73 '74 '75 '76 '77
-30availability of credit. Government and public enterprise
spending was increased to mitigate the recession, but the
impact was dissipated by the high propensity to import.
in
recent years, more than 75 percent of Puerto Rican gross
national product has been spent on imports, primarily from
the United States.
Even if all government spending is
limited to Puerto Rican-produced goods and services, a
dollar of government spending probably results in no more
than a $1.33 increase in Puerto Rican GNP.
(The Puerto
Rican multiplier is discussed more fully below.)
With a
multiplier of only 1.33, Puerto Rico's pursuit of a
countercyclical fiscal policy has been frustrating.
The roots of Puerto Rico's economic problems go,
however, deeper than recent U.S. recessions. Two important
industries, petrochemicals and construction, have
been
depressed. In the late 1960's the Puerto Rican government
viewed petroleum refining as a centerpiece for a growing
petrochemical and plastics complex, and a foundation on
which the island's future prosperity could be based. Puerto
Rico's advantage was due, however, to its large allocation
of U.S. oil import quotas (which allowed imports of foreign
oil, which before 1973 was cheaper than domestic oil) rather
than to low wages, locational advantages, or other real
factors. The OPEC increase in the price of foreign oil and
the consequent termination of the Federal quota scheme
eliminated Puerto Rico's previous advantage. In March 1978
the Commonwealth Oil Refining Company (CORCO), the principal
oil refiner and the largest private corporation in Puerto
Rico, filed for protection under Federal bankruptcy laws.
The Puerto Rican construction industry has also been
hit by events of the last four years. From 1969 to 1973,
construction spending, especially on apartment houses and
condominiums, boomed. But in 19 73, interest rates increased
as the Federal Reserve tightened the money supply to fight
inflation. High borrowing and construction costs and the
general economic downturn choked off new condominium demand
and left a large stock of unsold units.
Between 1974 and
1977, employment of highly paid construction workers dropped
by 50 percent to 40,000 jobs. Although the backlog of unsold
units is being worked off and other sectors of
the
construction industry show some new signs of life, full
recovery for the construction industry is still a long way
off.
-31Puerto Rico has also been hurt by the
growing
competitiveness of foreign imports in U.S. markets.
Its
traditional advantages, cheap labor and no tariffs on
exports to the U.S. market, have been undermined by a series
of changes. Throughout the 1950's and 1960's (but not the
1970's) Puerto Rican wage rates rose not only in dollar
terms but also relative to wages paid in the United States
and foreign countries. To some extent, Puerto Rico was the
victim of its own economic success: as per capita incomes
rose, so did the wage at which labor would work.
Higher
Puerto Rican wages are also the product of Commonwealth and
Federal government policies. By the end of 1977, almost
two-thirds of non-government employees were subject to the
U.S. minimum wage, $2.30 per hour, and over 90 percent were
subject to a minimum wage of at least $2.00 per hour.
Furthermore, 37 percent of Puerto Rican employees work for
the Federal or Commonwealth governments (the U.S. figure is
18 percent), both of which pay higher than average salaries.
Food stamp, unemployment insurance, and other income support
programs have discouraged many Puerto Ricans from taking
unpleasant jobs paying a low wage.
The competitiveness of Puerto Rican production has been
further undercut by structural changes in the world economy.
After the Kennedy round of tariff negotiations in the
1960's, U.S. tariff rates were cut by 40-50 percent on
average.
As Japanese and other competitors
utilizing
low-wage foreign labor penetrated the U.S. market, U.S.
companies lost their inhibitions about manufacturing in
low-wage countries and exporting back to the United States.
The difference in labor costs between these countries and
Puerto Rico is striking. For example, in the Dominican
Republic and Haiti, two countries sharing an island closer
to the United States than Puerto Rico, unskilled labor earns
roughly 33 cents per hour, a seventh of the minimum wage in
Puerto Rico. Such countries' exports are subject to U.S.
tariffs and non-tariff trade barriers, but they can be
transported in ships flying foreign flags and using cheaper
foreign labor, which Puerto Rican exports cannot.
The increasing competitiveness of foreign imports is
clearly reflected in the level and composition of Puerto
Rican employment. Between 1973 and 1977, total Puerto Rican
-32manufacturing employment dropped from 152,100 to 145,400, or
4.4 percent — see Table 3.*
This drop, which was much
sharper in Puerto Rico than in the United States, was due to
a decline in the traditional labor-intensive industries
(tobacco, textiles, apparel, and leather products (including
footwear)), and the petrochemical sector.
By contrast,
employment grew in the chemical (including pharmaceutical),
non-electrical machinery, and professional and scientific
industries. Because these industries taken together employ a
fourth of manufacturing workers, their gain offered a
partial offset to the others' loss.
An unfortunate side effect of the possessions
corporation system of taxation in the past has
been
tax-induced plant closings. Until 1976,,a U.S. parent was
subject to Federal tax on dividends received from a
possessions corporation, but not on the distribution upon
the
liquidation
of
that
corporation.
Accordingly,
liquidation of the subsidiary into the parent was the final
step in realizing the full tax benefit of the possession
corporation system of taxation- Although Puerto
Rican
operations could be continued after corporate liquidation as
an unincorporated branch of the U.S. parent, high Puerto
Rican and Federal taxes applicable to non-exempt income
discouraged companies from continuing operations as taxable
establishments.
Although the available evidence is rather meager, a
recent study by Fomento, the Puerto Rican agency charged
with promoting new investment in Puerto Rico, provides
information on this point (see Figure III for source).
The
Fomento study examined 149 cases in which companies were
granted tax exemption between 1960 and 1962 and actually
established operations.
Because the grants
apply
to
specific products, not to all the operations of the company
obtaining the grant, the current status of operations in 46
of the 149 cases could not be determined. Of the 103 cases
remaining,
62 operations
apparently
discontinued,
*The statistics
in Table had
3 for
April 1978 been
represent
a sharp
increase in manufacturing employment over the March level.
Table 3
Total Manufacturing Employment in Puerto Rico, by Major Industry Group:
Average for Calendar Years 1973 to 1977 and April 1978
1977
Total Employment (000)
Average for Calendar Year:
7976
:
T975
': 1974
145.4
142. 5
135.2
150.9
152.1
98.3
97. 7
93.5
103.9
105.3
Industry Group
April 1978 ;
All Manufacturing Industries
Nondurable goods 102.1
151.5
1973
Percentage
Change
1973-1977
-4.4
-6.6
-1.3
24.0
24.1
23.8
24. 1
23.7
Food and kindred products 26.3
5.5
-3U.9
4. 9
5.4
5.1
3.8
Tobacco products
3.2
7.6
-42.1
4.
6
7.4
5.1
4.4
Textile mill products
4.7
40.3
-9.9
37. 5
38.1
34.6
36.3
Apparel
36.7
+ 2.3
4.3
4.2
4.0
4. 1
Paper and allied products; Printing
4.4
10.6
+
33.U
11
.4
11.6
10.4
and publishing
4.4
14.1
6.7
-6.0
5
9
6.6
5.5
Chemicals
15.1
6.3
6.4
-18.8
5 2
6.2
5.0
Petroleum refining; Rubber products
6.1
5.2
Leather and leather products
5.6
46.9
+0.6
41.7
46.8
47.1
44.9
Durable goods 49.3
Lumber and wood products;
4.9
-28.6
3.9
4.4
3.7
3.5
Furniture and fixtures
3.7
7.3
-28.8
6.1
7.3
5.6
5.2
Stone, clay and glass products
5.4
6.8
-23.5
5.8
5.6
5.4
5.2
Primary metal products; Fabricated metal products 5.7
+163.2
2.3
1.9
4.4
3.5
5.0
Machinery, except electrical;
14.0
-0.7
13.9
11.8
9.6
13.9
Transportation equipment
5.3
8.6
+
34.9
9.3
10.9
10.1
11.6
Electrical and electronic equipment
13.9
3.2
-15.6
3.0
3.0
2.8
2.7
Scientific instruments
12.1
Miscellaneous
manufacturing
3.2
Office
of the Secretary
of the industries
Treasury
Office of Tax Analysis
Sources : Economic Development Administration, Commonwealth of Puerto Rico; Office of the Governor, Commonwealth of Puerto Rico,
tudy of Puerto Rico, Part Two - Problems Affecting Development of Puerto Rican Society,
An Agenda for a Socio-Economic Study
June 1977, Table III-A-4, p. 166; and U.S. Department of Commerce.
i
Ui
Ui
I
-34-
FIGURE III
Current Status of 149 Exemption Decrees Granted
Between 1960 and 1962 and Utilized by Recipient Firms
6 Exemptions held 4 Exemptions held
by taxable firms
by taxable firms
reporting profits
reporting losses
i
)urce: Government of Puerto Rico, Economic Development Administration, Economic Analysis
the Industrial Incentive Program of Puerto Rico, February 1978.
-35and 31 were still operating under an extension or a
modification of the original tax exempt
grant.
Ten
operations were continuing in a taxable status; six were
paying taxes, and four were reporting losses.
As noted below, the Tax Reform Act of 1976 eliminated
the Federal tax incentive to liquidate operations,
recent changes in the Puerto Rican Industrial Incentive
ease the transition from exempt to taxable status.
and
Act
B. Characteristics of Possessions Corporations
The characteristics of the possessions corporations
reflect the unique features of Puerto Rican and Federal tax
laws. Because most of the statistical analysis below is
based on tax returns, the identities and characteristics of
individual taxpayers are confidential. Companies
must,
however, file 10-K returns with the U.S. Securities and
Exchange Commission, and these returns, which are available
to the public, provide information on the importance of
section 936 to individual companies. To
explain
why
corporate income tax payments are often less than 48 percent
(the maximum statutory tax rate in the United States) of
book income, the S.E.C. requires corporations to indicate
which provisions of the Internal Revenue Code reduced their
tax liability by more than 2.4 percent of pre-tax book
income. A survey of recent 10-K forms, most of which cover
fiscal years ending in 1976 or the first half of 1977,
provides the information shown in Table 4.
In interpreting these data, two caveats should be kept
clearly in mind. First, because specific procedures for
estimating the dollar value of various tax preferences have
never been set forth by the S.E.C, the statistics presented
in Table 4 should be regarded as only rough estimates of the
importance to the companies of the possessions corporation
system of taxation- Second, companies for whom the tax
savings may be large in dollar terms, but less than 2.4
percent of book income before taxes, need not and generally
do not report this item separately. Third, even when tax
savings exceed 2.4 percent of book income, companies may
combine the tax savings
attributable
to
possessions
corporations with lesser items (e.g., deferral or sometimes
DISC). Companies following this practice were excluded from
Table 4.
Table 4
Major U.S. Manufacturing Corporations Claiming a Reduction in Income
Taxes in Excess of 2.4 Percent of Book Income
Because of Section 931 or 936 of the Internal Revenue Code
Corporation
Esmark
H.J. Heinz
Pepsico
Blue Bell
Hanes Corporation
Rohm & Haas
Abbott Laboratories
Baxter Travenol
Merck
Pfizer
Richardson-Merrell
Schering-Plough
G.D. Searle
Smith-Kline
American Hospital Supply
Johnson & Johnson
Eli Lilly
Squibb
Upjohn
Becton Dickinson
Chesebrough-Pond's
Digital Equipment
Motorola
Gould
Perkins-Elmer
Insilco
:
:
Industry
:Estimated Tax Saving :
Estimated Tax Saving
: (millions of dollars): (Percent of Book Income Before Taxes)
Food products
Food products
Beverages
Textile & Apparel
Textile & Apparel
Chemicals
Pharmaceuticals
Pharmaceuticals
Pharmaceuticals
Pharmaceuticals
Pharmaceuticals
Pharmaceuticals
Pharmaceuticals
Pharmaceuticals
Pharmaceuticals
Pharmaceuticals
Pharmaceuticals
Pharmaceuticals
Pharmaceuticals
Pharmaceuticals
Toiletries
Office Equipment
Electronics
Automotive Equipment
Instruments
Miscellaneous Manufactures
Sub-total - 14 pharmaceuticals
Total
26 manufacturers
Office of the Secretary of the Treasury
Office of Tax Analysis
$ 5.6
4.9%
7.2
7.0
3.6
3.1
0.6
4.6
2.8
3.4
10.6
3.0
16.2
12.1
22.9
35.6
11.8
14.3
5.5
15.1
5.8
5.3
37.0
32.5
24.5
15.1
38.5
22.9
7.2
6.7
3.6
4.2
12.7
13.9
21.9
10.0
14.6
8.0
5.1
3.3
6.3
2.9
3.5
11.1
6.2
1.1
1.7
2.3
8. 2
1.1
4.5
10.8
255.2
308.2
~"~
~~
—~
Source: Summary of 10-K Reports filed.with U.S. Securities and Exchange Commission in Tax Analysts and
Advocates, Tax Notes, recent issues.
•
-37To gain as complete
a
picture
of
possessions
corporations' operations as possible, information
from
Federal and Puerto Rican income tax returns was matched with
payroll and employment data
from
companies'
Federal
unemployment insurance tax returns. This section summarizes
the results based on information for 1975*, the most recent
year for which relatively complete data are available.
Section D below summarizes
the
less
complete,
but
essentially similar information for 1976, and Appendix B
sets forth comparable information for 1973 and 1974.
Table 5 indicates that 595 companies were apparently
eligible for the section 931 exclusion in 1975**, the book
income (net of losses) of these subsidiaries was $1.1
billion, and their estimated tax saving was $447 million.
This total tax saving is estimated by multiplying book
income (before deducting losses) by 40 percent and then
subtracting any income taxes paid to the Puerto Rican and
foreign governments.*** The tax-saving calculation ignores
companies with losses because in 1975, under section 931,
•Tables 5, 6 and 7 are based on the returns for corporations
whose fiscal years ended between July 1, 1975 and June 30,
1976. Because most possessions corporations have calendar
year accounting periods, the data correspond closely to
calendar year 1975 operations.
See Appendix B for details.
**That is to say, the companies excluded income under
section 931 in 1973, 1974 or 1975 and reported a profit or a
loss in 1975. Included in these 595 companies are those
which may not in fact have excluded income under section 931
in 1975 because they reported a loss or failed to qualify in
1975 for the section 931 exclusion.
***The conventional practice of measuring tax savings or
expenditures by calculating the tax consequences of changing
the Internal Revenue Code, but assuming that corporations
and individuals behave as they did before, may
need
explanation. The reason for the current practice is that
the tax expenditure defined in this way may be estimated
using available information on existing law and behavior.
Estimating the behavioral
change
requires
additional
economic analysis of what would happen if tax policy were
changed, and knowledgeable observers may differ in their
assessment of what would indeed happen.
-38Table 5
Income and Estimated Tax Expenditure
by Industry, 1975 1/
Industry Group
::
Number of
Corporations
:
:
:: Book Income ::
:
($000)
:
Estimated
Tax
Expenditure
($000)
All Industries
595
1,109,567
447,059
Manufacturing industries
394
1,055,462
425,369
22
7
8
88
69
47
22
14
14
7
26
7
76
5
27
24
71,747
26,805
-3,051
43,557
616,191
547,060
69,131
1,444
7,289
8,419
24,714
1,882
195,593
1,074
33,688
26,110
28,652
10,744
265
17,669
246,470
218,210
28,260
572
2,910
3,384
10,114
759
79,164
430
13,627
10,609
Nonmanufacturing
201
54,104
21,689
Transportation, communications,
and utilities
Wholesale trade
Retail trade
Apparel
Finance, insurance, real estate
Savings and loans
Services
Miscellaneous and not available
9
12
101
83
26
9
16
37
30,006
3,144
12,541
2,082
1,284
808
-107
7,236
10,062
1,258
5,250
1,123
588
307
1,623
2,908
Food and kindred products
•tobacco products
Textile mill products
Apparel
Chemicals, total
Pharmaceuticals
All other chemicals
Rubber products
Leather and leather products
Stone, clay, and glass products
Fabricated metal products
Machinery, except electrical
Electrical and electronic equipment
Transportation equipment
Scientific instruments
All other manufacturing
Office of the Secretary of the Treasury
Office of Tax Analysis
1/ Includes data for possessions corporations operating in American Samoa,
Guam, and the Panama Canal Zone. These non-Puerto Rican operations account
for less than 2 percent of total tax expenditure in any year (see Table 1).
-39they could join affiliated U.S. companies in filing a
consolidated Federal return. The 40 percent represents the
Treasury's necessarily rough estimate of what the effective
rate of taxation would have been in the absence of a tax
provision such as this.* (Another way of interpreting this
40 percent is that it is the effective rate which would
apply if Puerto Rico were treated the same way as the fifty
States and the District of Columbia.) The effective rate is
less than 48 percent, the maximum statutory rate, because
other provisions of the Internal Revenue Code (e.g., the
investment tax credit and accelerated depreciation) would
have reduced the tax burden by an estimated 8 percentage
points. Puerto Rican and foreign taxes, which amounted to
$6.2 million overall, would also have been creditable
against the Federal income tax liability and, thus, further
reduce the net saving of U.S. taxes.
Several important conclusions can be drawn from the
tables in the text and Appendix B and from the underlying
statistics:
— The Federal tax expenditure in 1975 was $447
million, compared to $258 million in 1973.
— If all the possessions corporations of each U.S.
parent are consolidated, the benefits of the
possessions corporation system of taxation were
concentrated among all U.S. parent corporations
as follows in 1975:
: Percent of Total
Number of
: Tax Benefits of All
Parent Corporations ::
Corporations
Top 5
Top 10
Top 20
Top 30
—
27.3%
46.2
70.0
80.2
Just under 50 percent of the total tax
saving
from 1973-1975 was realized by pharmaceutical
subsidiaries. The concentration of tax benefits
for parent corporations indicated above
is
largely attributable to its concentration in the
pharmaceutical sector.
*See Department of the Treasury, Effective Income Tax
Paid by United States Corporations in 1972, May
Rates
1978.
-40Tables 6 and 7 are
based
on
280
possessions
corporations for which 19 75 employment and payroll data
could be obtained from the Federal unemployment tax returns.
While the coverage represents less than half the number of
companies included in Table 5, the combined book income of
the sample, $860 million, represents four fifths of the book
income of all possessions corporations.
For no apparent
reason, information for companies in
the
high-profit
industries was more frequently available than that for
companies in the labor-intensive industries.
The first three columns of Table 6 present information
comparable to that in Table 5. Columns 5 and 7 indicate the
number of employees and the total employee compensation,
respectively, in each industry in 1975. Finally, the last
three columns indicate the tax expenditure per employee, the
tax expenditure as a percent of total compensation, and
average compensation.
Table 6 highlights the relationship between Federal tax
expenditures and Puerto
Rican
employment.
For
the
manufacturing companies covered, the tax expenditure per
employee averaged $7,428, which was slightly larger than the
average compensation per worker, $7,300.
Table 6 also
indicates that the tax expenditure per employee varied from
one industry to another. In the pharmaceutical industry the
Federal tax expenditure represented almost $35,000 per
employee, or approximately three and a half times the total
compensation of the comparatively well paid Puerto Rican
pharmaceutical employee.
By contrast, in
the
rubber
industry, the tax expenditure per employee was $760, or 11
percent of the average wage.
The tax expenditure per
employee
in
all
manufacturing
corporations
except
pharmaceuticals was $4,061.
Table 7 is based on the same 280 possessions
corporations shown in Table 6, but ranked according to the
Federal tax expenditure per employee. At the top of the
ranking was a company for which the Federal tax expenditure
represented more than $500,000 per Puerto Rican employee; at
the low end were the companies which incurred losses and,
thus, derived no immediate tax benefit from section 931.
According to Table 7, the top five possessions corporations
had tax savings per employee in excess $100,000; together
they accounted for 8.4 percent of the total tax savings and
0.5 percent of the total employment, of the 280 companies
for which employment information was available. The top 58
possessions corporations, those for which tax savings per
employee exceeded $10,000 in 1975, collectively accounted
Table 6
Tax Expenditure, Employment and Compensation of Employees by Industry, 1975
Industry Group
: Tax Expenditure ;
Employees
: Compensation of :Tax Expendi-:Tax Expenditure
:
:
:
:
: Employees 1/ : ture Per :as Percent of
Number of
Book Income: Amount :Percent :
:Percent : Amount :Percent : Employee :Compensation of
Corporations
($000)
; ($000) ;of Total: Number ;of Total: ($000) :of Total:
($)
:Employees
dl industries
280
858,961
342,212
100.0
43,174
100.0
345,234
100.0
Manufacturing industries
237
824,816
328,863
96.1
31,812
73.7
250,149
72.5
14
5
3
46
49
35
14
8
9
4
18
3
46
3
21
8
37,173
5,487
13,138
2,271
3.8
.7
.1
1.7
5,321
12.3
2.0
.2
38,920
4,600
11.3
861
83
4,658
7,838
5,794
2,044
10.8
18.2
13.4
Food and kindred products
Tobacco products
Textile mill products
Apparel
Chemicals, total
Pharmaceuticals
All other chemicals
Rubber products
Leather and leather products
Stone, clay and glass products
Fabricated metal products
Machinery, except electrical
Electrical and electronic equipment
Transportation equipment
Scientific instruments
All other manufacturing
Nonmanufacturing
Transportation, communications
and utilities
Wholesale trade
Retail trade
Finance, insurance, real estate
Savings and loans
Services
Miscellaneous and not available
281
143
14,007
562,306
507,126
55,108
1,173
6,011
4,530
21,156
5,847
224,734
202,054
22,680
65.7
59.0
527
25,508
84,390
58,127
25,075
3,959
8,381
2,775
10,412
1.3
.2
7.4
24.4
16.8
963
392
6.6
.1
.7
.5
2.5
.1
71
4.7
1.3
3.4
1.0
2.9
.2
457
7.3
1.1
2.4
.8
3.0
.1
128,423
51,651
15.1
6,958
16.1
51,580
14.9
109
898
11,235
7,696
.3
3.3
2.2
438
2,404
1,835
8,578
576
1,477
414
1,248
734
293
26,085
16,487
10,479
6,660
.1
3.1
1.9
1,627
571
.3
3.8
1.3
43
34,145
13,349
3.9
11,362
26.3
95,084
27.5
4
5
3
12
8
8
11
27,975
1,756
2,346
9,249
2.7
.2
.3
.1
.1
.4
.2
4,430
10.3
.8
5.6
2.0
1.9
4.8
2.9
37,792
3,283
21,944
7,509
6,913
15,031
9,525
10.9
340
950
785
-991
2,108
702
876
390
298
1,331
801
2,400
861
799
2,061
1,270
1.0
6.4
2.2
2.0
4.4
2.8
y
7,428 y
5,229
2,469
2,638
1,723
1,255
28,672
34,873
11,096
760
1,628
4,432
6,873
5,521
7,423
2,688
6,441
11,664
768 2/
33.8
49.4
27.1
22.9
266.3
347.6
90.4
11.1
28.7
66.1
82.4
85.8
100.1
32.6
93.3
86.5
8.9 2/
2,088
2,064
24.5
21.4
365
452
373
646
631
4.0
5.2
4.3
8.9
8.4
Office of the Secretary of the Treasury
Office of Tax Analysis
1/ Compensation of employees was computed by multiplying 1.189 times payroll. The additional 18.9 percent reflects the
employer-paid portion of social security, unemployment insurance, and other non-payroll labor costs. The 18.9 percent is the
average for all U.S. manufacturing industries in 1975; see the U.S. Department of Commerce, Survey of Current Business, July
1977, Tables 6.5 and 6.6.
2/ Compensation of employees and number of employees used to compute these amounts were weighted by industry using the ratio of
~~ tax expenditure in Table 5 and tax expenditure in this Table.
—
1/
101.7 y
61.1
Average
Employee
Compensation
($)
7,729 2/
7,300 2/
7,314
5,342
6,346
5,475
10,766
10,032
12,300
6,872
5,674
6,702
8,342
6,431
7,412
8,239
6,905
13,478
8,597 2/
8,530
9,656
9,143
8,720
8,651
7,292
7,500
I
Table 7
Tax Expenditure, Employment and Compensation of Employees by Size of Tax Expenditure Per Employee, 1975
Size of Tax
Expenditure
per Employee
Book Income
Number of
($000)
Corporations
Tax
Expenditure
Amount :Percent
($000) :of Total
: Compensation of :Tax ExpendiEmployees
:
Employees 1/ : ture Per
:Percent : Amount :Percent : Employee
Number :of Total: ($000) :of Total:
($)
All Corporations
280
858,961
342,212
100.0
43,174
100.0
345,234
100.0
$100,000
50,000
10,000
5,000
1,000
500
100
1
5
11
42
39
91
28
26
6
72,950
266,912
274,257
128,198
114,456
6,695
5,615
438
29,180
106,760
108,529
51,266
41,535
2,636
2,246
59
8.4
30.9
31.7
15.0
12.4
.8
.7
227
1,511
4,851
6,810
15,972
3,640
6,607
896
.5
3.5
11.2
15.8
37.0
8.4
15.3
2.1
2,442
16,289
44,863
67,322
117,558
24,145
49,392
5,574
.6
4.3
11.8
17.7
30.9
6.3
13.0
1.5
32
-10,561
2,660
6.2
17,650
14.0
or more
under $100,000
50,000
under
10,000
under
5,000
under
1,000
under
500
under
100
under
Loss Corporations
5,229 2/
128,546
70,655
22,373
7,528
2,600
724
340
66
:Tax Expenditure
: as Percent of
:Compensation of
: Employees
Average
Employee
Compensation
($)
67.7 2/
7,729 2/
1,194.9
655.4
241.9
76.2
35.3
10.9
4.5
1.1
Office of the Secretary of the Treasury
Office of Tax Analysis
10,757
10,779
9,248
9,885
7,360
6,632
7,475
6,2206,635
i
I
1/ Compensation of employees was computed by multiplying 1.189 times payroll. The additional 18.9 percent reflects the
" employer-paid portion of social security, unemployment insurance, and other non-payroll labor costs. The 18.9 percent is
the average f w all U.S. manufacturing industries in 1975; see the U.S. Department of Commerce, Survey of Current Business,
July 1977, Tables 6.5 and 6.6.
2/ Compensation of employees and number of employees used to compute these amounts were weighted by industry using the ratio of
~~ tax expenditure in Table 5 and tax expenditure in Table 6.
-43for 71 percent of the total tax expenditure and 15.2 percent
of total employment.
Because the coverage of employment
and payroll statistics is
not
complete,
possessions
corporations with tax savings exceeding $10,000 per employee
may in fact have realized a somewhat smaller percentage of
the total tax savings and a significantly smaller percentage
of the total employees of all possessions corporations than
was the case for the 280 companies represented in Table 7.*
Both Tables 6 and 7 indicate a direct relationship
between the company's tax saving per employee and its total
compensation per employee. This reflects a tendency of the
high-profit industries to employ more highly skilled workers
and/or a willingness to pay those workers more than they
would have been paid by other Puerto Rican employers.
Finally, the industries in which tax savings per employee
were the highest (pharmaceuticals, electrical and electronic
equipment, scientific instruments, non-electrical machinery)
tended to be the same industries in which total employment
has been growing since 1973; conversely, industries in which
tax savings per employee were the lowest (tobacco products,
textiles, apparel, leather products) tended to be those
whose employment was declining — see Table 3 above. While
taxation is not the only factor shaping the development of
Puerto Rican industry — the growth in U.S. demand for the
products, international trade considerations and
other
factors play an important role -- the evidence does suggest
that tax incentives may bring investment to Puerto Rico.
C. Linkages and the Multiplier
The preceding Section related the tax cost of the
possessions corporation system of taxation to the employment
and payroll of those companies.
In addition to creating
jobs directly, this system of taxation may bring indirect
benefits to Puerto Rico.
Manufacturing
requires
raw
materials, intermediate goods, and services, a portion of
which are supplied by the local economy.
Investment in
Plant and equipment creates jobs in the construction and
capital equipment industries.
Workers in all industries
spend
salaries
goods on
and the
services,
whichthat
hastax
a
*Thesetheir
inferences
areon based
assumption
savings per employee for companies missing from the sample
equal the average tax savings per employee for companies in
^e same industry
—
see
Table
6.
Because
the
Pharmaceutical companies tend to be over represented in the
sample, the biases indicated in the text may have occurred.
-44"multiplier" effect on the Puerto Rican economy.*
in
addition to these "backward linkages", the development of
one industry may encourage the growth
of
downstream
customers, a phenomenon called "forward linkage."
For
example, the building of a petroleum refinery facilitates
the growth of the petrochemical manufacturers. This Section
summarizes the evidence
currently
available
on
the
importance of these indirect benefits.
1. Backward Linkages
The usual method of evaluating backward linkages begins
by examining industries' expenditures on various inputs. In
order to compare linkages in one industry to those in
another, each industry's expenditures on labor, capital,
locally purchased materials and on imports are expressed as
a percentage of the total value of its production. The sum
of the shares of all expenditures measured in this way, plus
the rate of return on invested capital, is 100 percent.
The costs of materials, labor and other inputs as a
percentage of the total value of production by Puerto Rican
manufacturing industries in 1972 are depicted in Table 8.
The primary statistical source on which Table 8 is based
does not differentiate between possessions corporations and
locally owned companies or between imported and locally
produced materials. Because the operations of a possessions
corporation are often integrated with those of its U.S.
parent, the linkage of possessions corporations with the
local economy may be somewhat weaker than the linkage for
all Puerto Rican manufacturers, as measured in Table 8.
To estimate how much possessions corporations purchase
from the local economy, one must first determine how total
purchases are apportioned between Puerto Rican and imported
inputs.
Unfortunately, neither
the
1972
Census
of
Manufactures nor any other recent study provides up to date
information on this point. Rather than assuming that every
industry's propensity to import was the same as that of the
Puerto Rican economy as a whole, each industry's
1972
expenditure was apportioned using data from a recently
*As a general practice, the Treasury does not estimate the
linkage and multiplier impacts of specific tax provisions.
This is because tax changes are usually taken in the context
of an overall Federal budget. The purpose of undertaking the
analysis here is to assess the impact of section 931/936,
both in total and by industry, on Puerto Rico alone, not on
the U.S. and Puerto Rico taken together.
^= ^ r>«
as a P e r c e n t
Table 8
* x.u E t x P f n d i t u r e s on M a t e r i a l s , L a b o r , P l a n t , and E q u i p m e n t
o f the V a l u e o f P r o d u c t i o n by M a n u f a c t u r i n g E s t a b l i s h m e n t s in P u e r t o
All Manufacturing :
Food and
:
Industries
; Kindred Products ;
Cost of Materials
from All Sources
1/
Cost of Materials
from Puerto Rico
2/
54.3
64.7
26.8
49.8
Value Added 1/ 45.7 35.3
Return on Capital and
Overhead Costs 4/
59.3
60.8
46.1
56.3
19.0
39.2
18.9
•1
.1
Expenditures on
New Equipment 1/
2.2
3.2
•
18.0
43.7
30.8
30.0
22.7
12.8
.1
.2
i
2.2 .9 .8 1.0
.3
Total Expenditures on
Materials, Labor, Plant,
and Equipment in
Puerto Rico
5/
45.9
66.2
Ratio of Labor Costs to
Total Expenditures in
Puerto Rico
.370
.219
Office of the Secretary of the Treasury ~~~ — — — .
Office of Tax Analysis
14.8
53.9
20.0
1.1
*
16.4
24.1
2.1
*Less than 0.05 percent.
Apparel
:
Lumber and
: Wood Products
20.6
Expenditures on
New Plant 1/
Expenditures on
Used Equipment 1/
:
Textile
:
:Mill Products;
16.3
28.4
1972
Tobacco
Products
40.7
Labor Costs 3/ 17.0 14.5
Rico,
en
I
.5 * .4 *
36.3
35.6
.449
46.3
.531
48.4
.665
.620
Table 8-continued
Furniture
and Fixtures
Cost of Materials
from All Sources
i
Paper and
; Allied Products
.7
46
1/
Cost of Materials 24 9 20.9
from Puerto Rico
2/
Value Added 1/
„ ,_ 0/
Labor Costs 3/
Return on Capital and .g
Overhead Costs 4/
Expenditures on . 3 3 3,0
New Plant 1/
7 Printing and
: Publishing
34.2
8
-3
^<*»3
si 7
53 7
27 5
z/ 3
'
42.2
65.8
22.4
30.3
5 35#1
25.7
3
Expenditures on 8<1 3.9
New Equipment 1,/
'7
±,z
Expenditures on 2
Used Equipment 1/
Total Expenditures on
Materials, Labor, Plant,
and Equipment from
Puerto Rico
5/
Ratio of Labor Costs to
Total Expenditures in
Puerto Rico
*
4
Office ot the Secretary ot the Treasury
Office of Tax Analysis
*Less than 0.05 percent.
54.4
51 7
D0
496
^433
#5
Table 8-continued
Rubber Products
Cost of Materials
from All Sources
1/
Cost of Materials
from Puerto Rico
2/
Leather and
:Stone, Clay and
Leather Products :Glass Products
Value Added 1/ 46.5
48.8
Labor Costs 3/ 27.5
29.3
Return on Capital and
Overhead Costs A/
16.0
10.9
65,.9
49,.9
21.9
26.1
29.0
23.5
27.7
39.4
1.6
1.1
1.4
.2
i
I
.2
Expenditures on
Used Equipment 1/
2.2
.607
4.2
5.4
2.4
1.6
.2
__
.1
•
66.2
39.1
45.3
Office of the Secretary the Treasury
Office of Tax Analysis
*Less than 0.05 percent.
31.5
17.8
25.3
.2
Expenditures on
New Equipment 1/
Total Expenditures on
Materials, Labor, Plant,
and Equipment from
Puerto Rico
5/
Ratio of Labor Costs to
Total Expenditures in
Puerto Rico
34.1
50.1
41 .6
54.7
19.0
18.6
Expenditures on
New Plant 1/
38.5
9.7
17.1
: Fabricated :
Machinery
;Metal Products:Except Electrical
58.4
45.3
51.2
53.5
Primary
Metals
.749
39.2
51.2
.382
.348
37.5
.558
.696
Table 8-continued
Electrical and
Electronic Equipment
Cost of Materials
from All Sources
Transportation
Equipment
Miscellaneous
Manufacturing
Industries
Scientific
Instruments
42.5
46.6
36.2
54.6
13.6
14.9
11.6
17.5
Value Added 1/
57.5
53.4
63.8
45.4
Labor Costs 3/
19.8
28.9
25.5
21.0
Return on Capital and
Overhead Costs 4/
37.4
24.1
37.9
24.1
Expenditures on
New Plant 1/
2.7
.5
1.2
1/
Cost of Materials
from Puerto Rico
2/
Expenditures on
New Equipment 1/
Expenditures on
Used Equipment 1/
Total Expenditures on
Materials, Labor, Plant,
and Equipment from
Puerto Rico
5/
Ratio of Labor Costs to
Total Expenditures in
Puerto Rico
.9
1.8
.6
.2
.1
.1
.1
38.0
44.3
36.1
Office of the Secretary of the Treasury
Office of Tax Analysis
*Less than 0.05 percent.
1.3
.548
.655
39.8
.671
.530
Table
8-continued
Notes:
1/ Based on U.S. Department of Commerce, 1972 Economic Census of Outlying Areas, Manufacturing, Puerto Rico, October 1974,
" Chapter 2, Table 2. All statistics are expressed as a percentage of value added plus cost ot materials.
2/ Percentage of cost of materials from Puerto Rico is estimated by multiplying the cost of materials from ^^^^n^yE^rd
~ share of intermediate imports in total intermediate inputs. This latter share was estimated by Richard Weisskoff and Edward
Wolff, "Development and Trade Dependence: The Case of Puerto Rico, 1948-1963," Review of Economics and Statistics, November
1975, Table 2, p. 474. These import shares are based on 1963 data; more recent information is unavailable. Whether the
degree of dependence on imported inputs for individual industries decreased between 1963 and 1972 is impossible to
determine, but the ratio of Puerto Rican imports of capital goods, raw materials and other intermediate goods to the value
of shipments for all industries decreased only slightly over this interval.
3/ Labor costs are estimated by multiplying total payroll, as reported by the U.S. Department of Commerce, op. cit., by 1.16.
" The additional 16 percent reflects the employer-paid portion of social security, unemployment insurance and other
non-payroll labor costs. The 16 percent is the average for all U.S. manufacturing industries in 1972; see the u - b Department of Commerce, The National Income and Product Accounts of the United States 1929-74: Statistical Tables, iy/b,
Tables 6.5 and 6.6.
4/ Value shown equals the differential between value added and labor costs. The return on capital includes not only profits,
~ but also interest expenses, depreciation, expenditures on accounting and legal services, and any other overhead costs.
(
5/ Value shown equals the sum of the cost of materials from Puerto Rico, labor costs, 80 percent of expenditures on new plant, «
" 21 percent of expenditures on new equipment and total expenditures on used equipment. The 80 percent of expenditures on new
plant corresponds to the estimated ratio of expenditures on Puerto Rican inputs to total expenditures by the construction
industry, as reported in Weisskoff and Wolff, op. cit. The 21 percent of expenditures on new equipment corresponds to the
ratio of the value of shipments of machinery except electrical with a Puerto Rican destination to total expenditures for new
equipment by all manufacturers.
-50published study based on 1963 data (see footnote 2 to Table
8).
Because Puerto Rico"s total imports
of
capital
equipment, raw materials and intermediate products as a
percentage of either aggregate manufacturing shipments or
gross domestic output decreased only slightly between 1963
and 1972, applying the 1963 apportionment ratios to the 1972
data may produce reasonable results. Between 1972 and 1977,
however, the ratio of imported capital equipment, raw
materials and intermediate products increased substantially,
so the statistics in Table 8 may overstate possessions
corporations dependence on the local economy.*
With these caveats in mind, Table 8 indicates that for
all manufacturers the cost of materials represented 54.3
percent of the value of production.
Just under half of
these materials (26.8 percent of the value of production)
were estimated to have been obtained in Puerto Rico, and the
rest were imported, primarily from the United States. Labor
costs, which include the employer-paid Social Security
contribution and the cost of other non-wage benefits,
constituted 17.0 percent of the value of production.
The
return
on
capital
plus
overhead
costs
(interest,
depreciation of existing capital, accounting and legal
costs, etc.) accounted for the remaining 28.4 percent of the
value of production. Although the source on which Table 8
is based does not estimate the cost of existing capital used
in production, it does report new investment in plant and
equipment, be it for replacement or
expansion.
New
investment represented 4.3 percent of
the
value
of
manufacturing production, roughly a seventh of the current
return on capital plus overhead costs.
The last two rows in Table 8 show estimated expenditures on all Puerto Rican inputs (labor plus locally
purchased materials, plant and equipment) as a percent of
the value of production, and labor costs as a percentage of
estimated expenditures on all Puerto Rican inputs, respec*A
group of
pharmaceutical
indicated
an
tively.
The 12
former
statistic iscompanies
useful in
comparingin one
April 19, 1978 submission to the Treasury that their own
recent annual purchases in Puerto Rico of materials and
services totaled $89.9 million, which was 11 percent larger
than their own total payroll in Puerto Rico. By comparison,
Table 8 estimates the cost of materials from Puerto Rico for
all pharmaceutical manufacterers was 7 percent larger than
the cost of labor in 1972. in this one industry, at least,
the use of 1963 data has produced a result close to that
based on more recent and presumably more accurate data.
-51industry's use of Puerto Rican inputs to another's, while
the latter will be used below to translate the Federal tax
expenditure as a percent of compensation of employees into
tax expenditure as a percent of Puerto Rican
income
associated
directly
or
indirectly
with
possessions
corporations.
The second to last row in Table 8 indicates that some
Puerto Rican manufacturers depend much more than others on
locally produced inputs. For example, food, furniture,
paper, printing, stone, clay and glass, and primary metal
manufacturers' expenditures on Puerto Rican inputs represent
more than half of the total value of their own production.
At the opposite extreme, the pharmaceutical manufacturers
spent less than a fifth of the value of production on Puerto
Rican inputs. The low pharmaceutical percentage reflects a
high return on capital plus overhead costs, not a heavier
than average dependence on imported versus locally purchased
materials. (The pharmaceutical companies are estimated to
import approximately 55 percent of their total inputs, which
is slightly higher than the 51 percent average for all
manufacturers.) Finally, Table 8 also indicates that the
pharmaceutical companies reinvested 7.6 percent of the value
of their current production in additions to plant and
equipment, more than the 4.3 percent for all manufacturers.
As Table 3 above indicated, the chemical sector, which
includes pharmaceuticals, has expanded rapidly since 1972.
2. The Multiplier
In addition to the income generated by payroll and
purchases of locally produced materials, expenditures by
possessions corporations have a multiplier impact on the
local economy. The original increase in spending generates
income, part of which is used to purchase locally produced
goods and services, thereby inducing a secondary increase in
spending and income. Lacking any econometric model of the
Puerto Rican economy, one must resort to less exact methods
to estimate the size of the Puerto Rican multiplier.
According to standard textbook macroeconomic analysis, the
size of the multiplier for an increase
in
spending
(assuming, as seems reasonable in the case of Puerto Rico,
that the government cannot change the rate of interest or
credit conditions) is:
1
s+m
The symbols s and m represent the fraction of an increase
in GNP which is saved or is spent on imports, respectively.
-52Saving and importing represent "leakages" — the opposite of
"linkages" — from the spending-income cycle; the greater
these leakages are, the more quickly the impact of increased
spending is dissipated, and the smaller the multipler is.
In Puerto Rico, the propensity to save appears to be
small, and the propensity to import high. In 1976, imports
equaled 72 percent of gross national product; between 1974
and 1976 the increase in the dollar value of imports equaled
79 percent of the increase in the dollar value of gross
national product. If the marginal propensity to save, s, is
assumed to be zero and the marginal propensity to import, m,
to be .75, then the formula given above indicates a
multiplier of 1.33. That is to say, if spending increases
by $1.00, an additional $.33 in local spending will be
subsequently generated, so the total increase in income is
$1.33.*
-*• Direct, Indirect and Total Effects
Information on total employee compensation of
possessions corporations was presented in Section B above. A
broader measure of Puerto Rican benefits can be obtained by
adding to employee compensation estimates of the companies'
purchases of Puerto Rican materials,
new
plant
and
equipment, and then incrementing that total spending on
Puerto Rican inputs by the multiplier.
The final result
would be a measure of the total Puerto Rican income
associated directly
and
indirectly
with
possessions
corporations.
An assumption implicit in this new, broader measure is
that all Puerto Rican resources used by the possessions
corporation in their production have no alternative economic
use — they would be unemployed but for the possessions
corporations. Although this may be a resonable assumption
for the Puerto Rican labor used, other Puerto Rican factors
may be scarce.
Capital must be diverted from
other
productive uses. Water and land are scarce in Puerto Rico;
their use by possessions corporations precludes their use in
other sectors, such as agriculture. Some purchased inputs,
such as gas, oil, sugar, wood, or alcohol, are standard
commodities which must be bought or could be sold overseas.
*This estimate ignores government taxation and spending. If
part of an additional dollar of income is paid in taxes and
the Puerto Rican government does not increase its spending
by a matching amount, the "leakage" will be greater, and the
multiplier will be smaller, than this simple analysis
indicates.
-53Sewage treatment, solid-waste collection and disposal and
other government services may also have economic costs.
If
employee compensation by possessions corporations is too
narrow a measure of the benefits they bring Puerto Rico, the
total income associated directly or indirectly with those
corporations is probably too broad a measure.
Table 9 below shows for various manufacturing
industries Federal tax expenditures as a percentage of
direct labor costs, of total direct expenditures on Puerto
Rican inputs, and of Puerto Rican income directly or
indirectly associated with those expenditures.
The first
percentage is identical to that in Table 6 above, the second
is obtained by multiplying the first by the percentage in
the last row of Table 8, and the third by dividing the
second by the multiplier. Finally, the fourth column is
simply the inverse of the third column —
Puerto Rican
expenditures directly or indirectly generated by possessions
corporations per dollar of Federal tax expenditure.
Table 9 indicates that Federal tax expenditure in some
industries is associated directly or indirectly with more
Puerto Rican expenditures or
income
than
in
other
industries. The average for all manufacturing is 3.5.
In
some industries (e.g., food products, rubber products), the
ratio is between 15 and 20, reflecting a low level of
tax-exempt income and/or substantial purchases of goods and
services from the Puerto
Rican
economy.
In
other
industries, the ratio is quite low, usually because the
tax-exempt income is high and local purchases are only
average.
In summary, taking account of the backward linkages and
the multiplier effect significantly expands — and probably
overstates — the total benefit to Puerto Rico associated
with the possessions corporation system of taxation.
And
while the measured cost-benefit ratios are reduced, they
continue to vary widely from one industry to another.*
*Note that a benefit-cost ratio of 1.0 does not mark the
boundary between a "good" program and a "bad" one. For the
reasons indicated above, the total
income
associated
directly or indirectly with possessions corporations may
overstate the benefits to Puerto Rico.
More importantly,
the benefit-cost ratio of one program should be compared not
to some fixed benchmark, but rather to the ratio for
alternative programs. For example (and only for example), a
public-works program funded by the Federal government would,
because of the multiplier effect, have a benefit-cost ratio
of 1.3. The alternative program could, of course, be a
restructured tax incentive.
Table 9
Tax Expenditures as a Percent of Compensation of Employees, of Direct Expenditure in
Puerto Rico, and of Direct and Indirect Expenditure in Puerto Rico, for Manufacturing Industries
Tax Expenditure:Tax Expenditure
:Tax Expenditure as Percent:Total Direct and
as a Percent
:as Percent of
:of Total Direct and
:Indirect Expenditures
of Compensation:Direct Expenditures:Indirect Expenditures in :in Puerto Rico Divided
of Employees l/:in Puerto Rico 2/ : Puerto Rico 3/
: by Tax Expenditure 4/
Manufacturing industries
101.7
37.6
28.2
3.5
33.8
7.4
Food and kindred products
5.6
17.9
49.4
22.2
Tobacco products
16.7
6.0
27.1
14.4
Textile mill products
10.8
9.3
22.9
15.2
Apparel
11.4
266.3
73.0
8.8
Chemicals, total
347.6
132.4
54.8
1.8
11.1
6.7
Pharmaceuticals
99.3
1.0
28.7
21.5
Rubber products
5.0
20.0
66.1
25.3
Leather and leather products
16.1
6.2
82.4
46.0
Stone, clay, and glass products
85.8
59.7
19.0
5.3
Fabricated metal products
100.1
54.9
34.5
2.9
32.6
21.4
Machinery, except electrical
44.8
2.2
93.3
62.6
Electrical and electronic equipment
41.2
2.4
Transportation
equipment
16.1
6.2
Office of the Secretary of the Treasury
Scientific
instruments
47.0
2.1
Office
of Tax
Analysis
1/
2/
1/
4/
From Table
Column (1)
Column (2)
Inverse of
6, column (10).
times Table 8, line (10).
divided by 1.33.
column (3).
I
-554.
Forward Linkages
Forward linkages are usually evaluated by examining the
percentage of total sales to various types of customers.
Table 10 shows the percentages of manufacturing industries'
shipments in 1972 to Puerto Rico, to the United States and
to foreign countries, respectively. For manufacturing as a
whole, 41.2 percent went to individual and industrial
consumers in Puerto Rico, 54.2 percent to buyers (including
parent companies) in the United States, and 4.5 percent to
foreign purchasers. If indirect exports (i.e., goods sold to
other Puerto Rican manufacturers who, in
turn,
were
exporting to the United States or foreign countries) could
be estimated separately, Puerto Rico's dependence on export
markets would appear larger than what Table 10 indicates.
Table 10 indicates that some industries' forward
linkages with other sectors of the Puerto Rican economy are
stronger than others'. The lumber and wood industry sells
its limited output to Puerto Rican users, and its primary
customers — the furniture and paper industries -- also sell
almost exclusively to the local market.
By contrast, the
pharmaceutical industry derived 1 percent of its total sales
from the Puerto Rican market.
Sales to United States
buyers, many of whom may be parent corporations, accounted
for 76 percent of total sales. The remaining 23 percent of
pharmaceuticals' sales were to foreign purchasers (many of
whom may have been affiliated foreign subsidiaries), a
larger percentage than the corresponding figure for any
other industry. The machinery industry, which exported 15
percent of its total shipments to foreign buyers, was second
in terms
of
non-U.S.
exports.
Because
possessions
corporations sell mostly outside
Puerto
Rico,
their
operations were not depressed by the 1973-77 recession in
the local economy.
D. Impact of Changing from Section 931 to Section 936 and
of Restructuring the Tollgate Tax
This Section reviews the available evidence on the
impact of the Federal Tax Reform Act of 1976 and of the
Commonwealth's restructuring of its
tollgate
tax
on
dividends paid by possessions corporations.
Because the
tollgate tax changes became effective on the same date
(October 1, 1976) as section 936, and because the entire
Puerto Rican Industrial Incentive Act has been under close
scrutiny and its reform anticipated, the impact of shifting
from section 931 to section 936 cannot be completely
disentangled from the impact of the tollgate tax or the
uncertainty about the future of the tax exemption program.
Table 10
Destination of Shipments by Puerto Rican
Manufacturing Industries, 1972
(Percentage of Total)
Industry Group
All manufacturing industries
: Puerto Rico : United States 1/ : Foreign Countries
41.2
54.2
4.5
Food and kindred products
59.2
37.2
3.7
•
15.5
84.5
Tobacco products
•
28.7
71.3
Textile mill products
*
21.8
78.0
Apparel
—
100.0
*
Lumber and wood products
97.9
2.1
87.5
5.0
7.5
Furniture and fixtures
78.2
18.2
3.6
Paper and allied products
18.9
66.5
14.6
Printing and publishing
1.0
76.0
23.0
Chemicals
64.2
32.7
3.3
*
Pharmaceuticals
47.8
52.2
*
15.6
83.1
Petroleum refining
*
s
91.7
8.3
Rubber products
47.8
52.2
*
87.1
9.7
3.2
Leather and leather products
15.6
83.1
*
77.1
22.2
1.4
Stone, clay and glass products
""
"*
" "
35.2
50.0
14.8
lpme nt
10.7
87.9
Primary metal products
.2
72.7
9.1
9.1
Fabricated metal products
3.9
94.6
2.3
Machinery except electrical
Electrical and electronic equipment
Transportation equipment
Office
of the instruments
Secretary of the Treasury
~"~
Scientific
Office of Tax Analysis
Miscellaneous
manufacturing
industries
12.3
87.7
Source:
U.S. Department of Commerce, 1972
Economic Censuses
of Outlying Areas,
Manufactures, Puerto Rico, October 1974, Chapter 2, Table 3.
1/ Includes shipments to the Virgin Islands.
*
Less than 0.05 percent.
^
<*
'
-571.
New Investment in Puerto Rico
The Puerto Rican economy remained sluggish throughout
1977, but has been picking up speed in 1978. To a large
extent these recent gains represent a welcome, if long
overdue, recovery from the recession which began in 1973-74.
In addition, Puerto Rico is a primary beneficiary of recent
changes in
the
international
economy.
The
recent
depreciation of the dollar against many foreign currencies
has helped Puerto Rican goods and services compete with
foreign producers for U.S. markets. The Orderly Marketing
Agreements limiting Korean and Taiwanese exports of shoes to
the U.S., and the Multifiber Arrangements limiting eighteen
developing countries' exports of textiles and apparel to the
U.S., have lessened the competitive pressure on Puerto Rican
manufacturers in these industries. The winter of 1977-78
was apparently the best ever for Puerto Rico's tourist
industry. As the dollar depreciated and foreign vacations
became more expensive, Puerto Rico seemed more attractive.
In addition, the Tax
Reform
Act
of
1976
imposed
record-keeping and other requirements on Americans attending
foreign
conventions,
but
exempted
those
attending
conventions in Puerto Rico and the possessions from those
limitations.
The combined Federal and Commonwealth tax changes
enacted in 1976 apparently made investing in Puerto Rico
somewhat less attractive for most U.S. companies.
The
Federal tax change added new incentives and disincentives to
investing in Puerto Rico. Those companies anxious to bring
money home from Puerto Rico as soon as possible benefitted
from the dividends-received deduction made available in
1976; those who felt no pressing need for domestic use of
accumulated Puerto Rican income might have preferred to keep
section 931 because of the exemption for Eurodollar interest
income. But when the Puerto Rican tollgate tax rules and
rates were also changed to make the dividends taxable, the
gains U.S. investors expected from the Tax Reform Act of
1976 were diminished and, perhaps, reversed.
Table 11 below is based on 394 corporations claiming
section 936 benefits for fiscal years ending before July 1,
1977 (most of which were for the calendar year 1976).
The
394 corporations included in Table 11
accounted
for
approximately 80 percent of the income excludable under
section 931 in 1975 (as shown in Table 5 above). For
corporations included in both the 1975 statistics of Table 5
and the 1976 statistics of Table 11, total book income and
total Federal tax savings increased by 43 percent and 44
percent, respectively. Accordingly, the
estimated
tax
expenditure
for sections
931 and
936 inover
calendar
year
1976
for
is $634
1975.
million,
a 44 percent
increase
the $440
million
-58Table 11
Income and Estimated Tax Expenditure by Industry, 1976 1/
Industry Group
:
: Estimated Tax
Number of :Book Income: Expenditure
Corporations: ($000)
: ($000)
All industries
394
1,325,963
532,996
Manufacturing industries
301
1,217,482
489,579
Food and kindred products
Tobacco products
Textile mill products
Apparel
Chemicals, total
Pharmaceuticals
All other chemicals
Rubber products
Leather and leather products
Stone, clay and glass products
Fabricated metal products
Machinery, except electrical
Electrical and electronic equipment
Transportation equipment
Scientific instruments
All other manufacturing
Nonmanufacturing
18
6
6
67
52
36
16
7
6
3
15
7
67
79,205
15,989
-272
47,462
758,401
654,540
103,861
1,560
5,818
9,242
15,475
2,012
224,057
31,882
6,396
192
19,072
303,360
261,816
41,544
626
2,327
3,697
6,199
808
89,772
21
26
44,174
14,359
17,670
7,578
93
108,482
43,417
Transportation, communications
and utilities
Wholesale trade
Retail trade
Finance, insurance, real estate
Services
Miscellaneous and not available
9
11
39
9
10
15
97,948
1,881
2,056
1,065
743
4,787
39,179
753
840
434
297
1,915
Office of the Secretary of the Treasury
Office of Tax Analysis
1/ Preliminary statistics. See text. Includes data for possessions
^F°ra^.0nS
° P e r a t i n g i n American Samoa, Guam, and the Panama Canal
4one. These non-Puerto Rican operations account for less than 2 percent
ot total tax expenditure in any year (see Table 1 ) .
-59Tables 12 and 13 present information for the 209
possessions corporations included in Table 11 for which 1976
employment and payroll-data are available. Comparing Table
12 to Table 6 above suggests that between 1975 and 1976 the
Federal tax expenditure increased not only in dollar terms,
but also relative to Puerto Rican employment and payroll.
This increase appears to be attributable as much to higher
tax expenditure per employee or per dollar of employee
compensation in the high-profit industries as to an increase
in the relative importance of these industries. For the 143
manufacturing corporations included in both Table 6 and
Table 12, tax expenditure as a percentage of total employee
compensation increased from 138 percent in 1975 to 149
percent in 19 76. (As noted above, employment and payroll
data were, for no apparent reason, more often available for
high-profit companies.)
Because Tables 11, 12, and 13 are based largely on
operations for calendar year 1976, they do not capture the
effect of the Puerto Rican tollgate tax, which was passed
and signed into law in the second half of 1976, much less
the uncertainty of 1977 about the future investment climate
in Puerto Rico. A better indicator of the impact of those
developments may be the number of new tax exemptions applied
for or granted over the last few years. Throughout 1977,
each was low by historical standards, but this may have been
due more to broader political and economic factors than to
the technical changes in Federal and Commonwealth tax laws.
As the outlines of the Puerto Rican Administration's
proposals for reforming the Industrial Incentive Act became
apparent, investors realized that the days of total tax
exemption were about to end. The large number of exemptions
granted just before the new program was announced presumably
included both a backlog of those that might have applied
earlier and a rush of those that would have applied later.
As of May 1978, 711 corporations had filed a section
936 election form — see Table 14.
Taken together, these
711 companies accounted for 99.5 percent of the income
excludable under section 931 in 1975. Of these, 635 were
included in one or more of the tables for 1973 to 1976 in
this Report. The remaining 76 corporations are "new" 936
corporations; that is to say, they excluded no income under
section 931 between 1973 and 1975, nor did they claim a
section 936 credit for a fiscal year ending before July 1,
1977.
Thirty-five of these
76
new
companies
were
incorporated in 1977 or 1978, while the remaining 41 were
incorporated prior to 1977.
This last group includes
Table 12
Tax Expenditure, Employment and Compensation of Employees by Industry, 1976 1/
Industry Group
Employees
Tax Expenditure
:Percent of
Amount : Percent of
Total
Number
($000) ; Total
Book Income
Number of
($000)
Corporations
100.0
32,912
192 811,909 327,271
99.6
31,697 96.3
Food and kindred products
Tobacco products
Textile mill products
Apparel
Chemicals, total
Pharmaceuticals
All other chemicals
Rubber products
Leather and leather products
Fabricated metal products
Electrical and electronic equipment
Scientific instruments
All other manufacturing 4/
10 38,557 15,621
5
12,158
4
-454
42
30,099
35
549,315
25
478,329
10
70,986
5
1,069
5
5,550
12
11,141
38
110,042
18
38,466
18
15,966
4.8
1.5
Nonmanufacturing
17 3,396 1,357
All industries
209
Manufacturing industries
815,305
328,627
4,863
119
12,066
219,722
191,329
28,393
430
2,219
4,465
44,160
15,386
8,220
100.0
Compensation
of Employees 2/
Amount :Percent of
($000) ; Total
Tax Expenditure Per
Employee
($)
:Tax Expenditure:Average
:as Percent of : Employee
:Compensation of:Compensation
{Employees
:
($)
266,223
00.0
5,127 3/
71.1 3/
7,208 3/
255,590
96.0
7,522 3/
119.7 3/
6,287 3/
11.3
3,685
2,584
51.7
36.6
8.2
26.0
286.4
392.9
101.3
30.6
34.9
105.5
92.1
112.1
59.1
7,124
7,054
6,834
5,844
12,332
10,996
15,634
7,816
6,393
8,107
7,797
7,656
8,862
12.8
8,751
3.7
66.9
58.2
8.6
.1
.7
1.4
13.4
4.7
2.5
4,239
1,882
212
7,938
6,220
4,428
1,792
180
995
522
6,147
1,792
1,570
12.9
5.7
.6
24.1
18.9
13.5
5.4
.5
3.0
1.6
18.7
5.4
4.8
30,199
13,276
1,449
46,390
76,707
48,691
28,016
1,407
6,362
4,232
47,934
13,721
13,913
.4
1,215
3.7
10,633
5.0
.5
562
5.2
5.2
1,520
35,325
43,209
15,844
2,386
2,230
8,553
7,184
8,586
5,236
4.0
1,118
17.4
28.8
18.3
10.5
.5
2.4
1.6
18.0
Office of the Secretary of the Treasury
Office of Tax Analysis
~ ^^?f^^X&^^ r^U^De^eST&ce, *,rvey of Current Business, Ouly
3/ cl£en£Son tfe^oyees and number of employees used to oo^te these amounts were wei9hted by Industry using the ratio of
t-av extjenditure in Table 11 and tax expenditure in this Table.
4/ i n t l S S ^ u f a c t S r S g industries wherfdata were available for less than 3 corporations.
i
o
I
Table 13
Tax Expenditure, Employment and Compensation of Employees by Size of Tax Expenditure Per Employee, 1976 1/
Size of Tax
Expenditure
per Employee
All Corporations
50,000 under $100,000
10,000 under $ 50,000
5,000 under $ 10,000
1,000 under $ 5,000
500 under $ 1,000
500
100 under $
100
1 under $
Loss Corporations
Compensation of
Employees 2/_
Employees
: Tax Expenditure ;
:Percent : Amount : Percent
Book Income: Amount :Percent
Number of
($000)
: ($000) :of Total Number :of Total; ($000) ; of Total
Corporations
209
815,305
328,627
100.0
32,912
100.0
266,223
100.0
9
339,728
314,304
64,402
95,374
6,314
1,460
33
135,889
125,719
25,761
38,136
2,522
584
13
41.4
38.3
7.8
11.6
.8
.2
1,721
6,291
3,780
14,567
3,588
1,780
224
5.2
19.1
11.5
44.3
10.9
5.4
.7
20,121
72,339
29,038
100,039
22,364
11,691
1,242
7.6
27.2
10.9
37.6
8.4
4.4
.5
961
2.9
9,389
3.5
50
28
64
29
16
3
10
-6,309
Tax Expenditure Per
Employee
($)
;Tax Expenditure
Average
:as Percent of
Employee
: Compensation of Compensation
: Employees
($)
71.1 3/
5,127 3/
78,959
19,984
6,815
2,618
703
328
58
675.4
173.8
88.7
38.1
11.3
5.0
1.0
Office of the Secretary of the Treasury
Office of Tax Analysis
1/ Preliminary statistics. See text.
1/ Compensation of employees was computed by multiplying 1.195 times payroll. The additional 19.5 percent reflects the
employer-paid portion of social security, unemployment insurance, and other non-payroll labor costs. The 19.5 percent is
the average fo^all U.S. manufacturing industries in 1976; see the U.S. Department of Commerce, Survey of Current Business,
July 1977, Tables 6.5 and 6.6.
.
.
3/ Compensation of employees and number of employees used to compute these amounts were weighted by industry using the ratio of
"" tax expenditure in Table 11 and tax expenditure in Table 12.
7,208 3/
11,691
11,498
7,682
6,867
6,232
6,568
5,545
9,770
i
CTk
Industry
Table 14
Elections under Section 936 by Industry
: Total : Included;
New E
: as of :
in
:
; Date of
;May 1978; Report : Total ;1977 or
All industries
711
635
76
35
Manufacturing industries
546
491
55
27
Food and kindred products
Apparel
Chemicals, total
Pharmaceuticals
All other chemicals
Fabricated metal products
Electrical and electronic equip:
Scientific instruments
All other manufacturing
Nonmanufacturing
Wholesale and retail trade
Finance, insurance, real estate
All other nonmanufacturing
Office of the Secretary of the Treasury
Office of Tax Analysis
32
126
95
65
30
35
106
36
116
28
114
87
61
26
31
97
32
102
4
12
8
4
4
4
9
4
14
1
6
4
2
2
2
5
1
8
165
144
21
8
70
29
66
65
23
56
5
6
10
2
1
5
-63several companies incorporated in the last five years, but
which presumably had start-up losses making an earlier
section 936 election disadvantageous.
Table 14 does not
include companies who recently obtained a tax exemption from
Puerto Rico, but have delayed their 936 election until they
are past their start-up losses. Table 14 indicates that the
new 936 corporations have very much the same industrial
composition as the old ones do.
2. Repatriation of Dividends
In denying a tax exemption for income earned outside
the possession in which the corporation had a trade or
business, and in making a dividends-received deduction
available to the parent, Congress hoped to speed the
repatriation of dividends.
Because of the Puerto Rican
tollgate tax, however,
dividend
payments
were
slow
throughout 1977.
With the entire 936 community seeking
repeal or substantial modification of the
tax,
most
companies waited to see what would happen. Because the
tollgate tax does not apply to a liquidating distribution,
the incentive to wait until the income tax exemption expired
and then liquidate the subsidiary into the parent remained,
albeit with diminished force and for Commonwealth, rather
than for Federal, tax reasons. Finally, some companies
initially wondered whether they could pay any tollgate tax
without being required by their accountants to establish a
reserve to provide for future tollgate taxes on
all
accumulated earnings. Creating such a reserve could depress
income in financial statements in the quarter in which the
reserve was established. Accounting firms have, however,
taken the position that a reserve for taxes on accumulated
earnings need not be established, providing the company
commits itself to repatriating only current earnings.
In the first six months of 1978, the rate of dividend
payments increased appreciably. As of early June, companies
have committed th
@FedFRASER