program and Model Cities program, in which Federal aid is available for a defined spectrum or variety of purposes, some of them designated rather broadly but still tied to particular public objectives or services. The State or local government that receives a grant ordinarily is not required to reimburse the Federal Government granting agency or to refund an equivalent value. In some instances, however, and especially for construction grants, some type of recapture rights may be reserved. The grant may be conditioned upon the performance of certain services or the completion of certain physical improvements in conformity to standards specified in Federal law or regulations or the intergovernmental agreement. Generally excluded from the definition of Federal grants in this compilation are such other arrangements for intergovernmental assistance as (a) shared revenues; (b) loans, other repayable advances, loan guarantees, and loan insurance; (c) technical assistance given by Federal personnel who are not specifically assigned to the aided State or local government; (d) training for persons engaged in State or local government operations; (e) various cooperative activities or programs involving reciprocal intergovernmental assistance; and (f) payments for contractual services rendered by State or local governments to the National Government and its agencies. Except for loans and loan guarantees, these forms of Federal assistance involve relatively small amounts. "Shared revenues," as the phrase is used above, are a special form of grant-in-aid in which particular revenues of the Federal Government-usually revenues from natural resource properties or activities are divided with one or several State or local governments. Whereas the usual grant-in-aid payment is an amount related to the measured need of a recipient for financial support for a designated public service or program, the shared revenue payment is a predetermined portion of receipts from a specified source. Revenue sharing has been applied to proceeds from sales or leases of public land (including leases for grazing or for mineral exploitation), privileged use of public lands, sales of timber and other natural resource products, sales of electric power by the Tennessee Valley Authority, and revenues derived under Federal tax laws in Puerto Rico, Guam, and other outlying areas. The use of the proceeds by the recipient government sometimes is circumscribed by the Federal statute authorizing the payment, but in any event there is no requirement for repayment or reimbursement to the Federal Government.3 Special terms used to identify particular features of Federal grant programs (such as useful distinctions between "formula apportionment" grants and "project" grants) are defined in the following pages as part of the explanation of the several column captions and entries in the table of grant characteristics. 3 The concept of "shared revenues" defined in the text does not refer to proposed general transfers of Federal revenues to State or local governments. The fact is that at present no such transfers to State and local governments are authorized, despite wide public and congressional discussion in recent years of various plans (and current administration proposals) for distributing predetermined shares of Federal tax revenues (such as incometax revenues) for use by State and local governments with relatively few restrictions on their use of the money and relatively few conditions prerequisite to eligibility for sharing in the distribution. President Nixon's plan for general revenue-sharing was outlined in a message transmitted to the Congress Aug. 13, 1969. EXPLANATION OF TABLE The table covers 10 aspects of each program, as follows: (1) The functional category in which the program is classified in the annual budget of the U.S. Government. The classification in the table conforms to the budget for the fiscal year 1970, published in January 1969. Entries are grouped in the first instance according to functional subcategories, using code numbers assigned in the budget. (2) The administering agency responsible for the program. These entries also conform to the budget for the fiscal year 1970. Proposals for agency reorganization or transfers of program responsibility from one agency to another, or from one component of a department or agency to another, are not reflected in the table unless they took effect before June 1969. Organizational references identify the Cabinet department or other major agency with legal responsibility for program administration, and also, in most instances, the office, bureau, service, or other principal component of a department. (3) The program title, usually as given in the budget for 1970. In some instances, a more descriptive or more generally recognized title is employed in the table. (4) Grant recipients-that is, types or categories of recipients eligible to receive the Federal grants. Grant programs are included in the table only if State governments, local governments, groupings that comprise two or more States or two or more local governments, or selected agencies or instrumentalities of State or local governmental units may qualify for the Federal aid. Often, however, nonpublic recipients also are eligible-for example, nonprofit private institutions, other private agencies, individuals, or business firms. In such instances, the table identifies all the various types of potential recipients, including State or local governments. (5) The "process" through which the grant operates in serving the broad goal or purpose established for it by congressional legislation. This column in the table is concerned with the way a grant may be used, i.e. the kinds of objects or services which may be purchased with the money. A compound entry means that a grant in this program may be available for any or all of the specified uses. (In some cases, the law provides for a subdivision of appropriations so that each grant when given is available to the recipient only for a particular designated process. In others, particularly project grants, the permissible uses are determined by the applicants' specific proposals in the applications for grants.) Examples of "compound entries" are the following: Services, facilities. Services, goods. Facilities, planning, services, and training. The phrase, "Services, facilities," signifies that the Federal grant is available both for payments for personnel and other current services and for the construction or acquisition of facilities necessary to the aided program. This entry is used, for example, in functional category 354, for the program "Resource conservation and development," and in 653, "Rehabilitation services and facilities: Basic support." Variants occur in which "planning" or "research" or other uses are indicated. The second phrase, "Services, goods," signifies that the grant is available to pay for personnel and other current services necessary to the program and for the purchase of commodities. An example of this entry is in 351, "Agricultural commodity distribution." In 653, "Food stamps," the equivalent phrase is "Commodities, services." The third entry illustrated above, "Facilities, planning, services, and training," is used, for example, for program 051, "Civil defense," where it indicates that the Federal grants may be applied to the construction or acquisition of necessary facilities, the planning of programs, the provision of current services, and the training of personnel, or for any one or more of these uses if they are specified in the grant application and approved by the granting Federal agency. A slightly different compound entry, "Facilities, research, services, and planning," is used for 404, "Anadromous and Great Lakes fish.” Since an objective of the table is to emphasize points of similarity among programs, more than to specify differences, many entries employ the same terms to characterize the "process," even though the subject matter of individual programs may differ considerably. Thus, "planning" and "comprehensive planning" are designated as processes that are common to many grant-in-aid programs, although the content and administration of the planning are governed by the special objectives of each separate program. Similarly, such broad terms as "surveys," "investigations." "experiments," "program development," "evaluation," and numerous others are used in the table to denote common processes, even though each of these words refers to activities that may have a distinctive character or scope for each program. Numerous entries are more specific or qualified, however, in describing the "process." Following are several illustrations: Community development. Replacement of essential public facilities. Food service facilities. Relocation assistance. Employing and training teacher aides. Production of educational materials. Establishing and improving library services to the handicapped. (6) The method of dividing available Federal aid among applicants or recipients. In this column, the following methods are distinguished: (a) Formula apportionment. (b) Project grants. (c) Formula-and-project grants. Each of these is described below. In addition, the section on "Formula apportionment" includes observations on some other uses of formulas in Federal grant-in-aid laws. (a) Formula apportionment.-Grants identified as "formula" or "formula apportionment" in the table entries are those in which, by law or administrative regulation, sums of money are allocated among States or their subdivisions according to formulas containing prescribed numerical factors. Formulas vary considerably from one program to another, depending on the activities or services for which the aid is given or the emphasis sought by the congressional committees that reviewed the legislation. In a few instances, the formula simply allots equal amounts to the several States. Frequently the allocation is determined by relative population, in total or in relevant age groups; or by comparative income per capita. Area or road mileage is a factor in some laws. A grant that is uniform in amount for all States is classified as a "formula" grant. Usually the annual allocation for a formula grant is applied to the sum appropriated and thereby made available for Federal expenditures for the program. Each State is allowed a prorated share of that sum. But in some instances the annual allocation is based on the amount authorized for appropriation or some other designated quantity, rather than the amount actually appropriated. The annual appropriation almost invariably limits the allotments to the several States in a formula apportionment. Individual grants may be reduced, if necessary, to bring their sum within available appropriations. Where the Congress specifies that apportionments shall be based on the sum authorized for appropriation rather than the amount actually made available, this is done in the expectation that some States will not claim all the aid allotted to them. Unused portions of grant allotments usually are reallotted to make them available to other States. Regular Federal-aid highway grant apportionments are made well ahead of the fiscal year to which they relate and are based on authorizations; the subsequent appropriations correspond more nearly to actual State requirements for financing construction. (The interstate highway system is not, however, subject to an apportionment formula.) The public assistance program, though it uses formulas, is a special case because it is open ended. That is, the law does not establish an explicit limit on the amount of grants for which any State may qualify in any year. In this instance, the formulas in the Federal law are used to determine for each segment of the program in each State the particular percentages of relevant State and local expenditures which, within designated limits, will be paid by the Federal Government. Indirectly, then, the formulas determine the amount of the Federal grant for any given period, such as a quarter-year or a fiscal year. Public assistance appropriations are based on expected caseloads and the individual benefit rates established by the several States for their federally aided programs. If these appropriations prove inadequate, Congress provides a supplemental appropriation to cover the deficiency. In most other Federal grants, the situation is reversed-the national total is predetermined and the formula fixes the share of each State or other recipient. As the example of public assistance suggests, formulas in Federal grant-in-aid laws are not in all cases apportionment formulas. Often the prescribed formula concerns only the matching requirements; that is, a formula may be used to determine the Federal share and the related State-local share of program expenditures. Matching formulas are discussed below under characteristic 7, the "maximum Federal share of expenditures." For some programs, a set of objective numerical factors is prescribed neither for apportionment of the grant nor for matching, but as a selective device for determining which particular institutions, agencies, or areas of State or local government may be eligible for the Federal grant. An example of this kind of formula is in the designation of "re development areas" eligible for assistance under the Public Works and Economic Development Act of 1965, as amended (42 U.S.C. 3161). Formula entries in the grant characteristics table do not report details of the various apportionment provisions for individual programs. Specific description of each formula requires a much more extensive table. This is supplied in an appendix in this report, at pages 95–119. The appendix tables cover both "apportionment formula" grants and "formula-and-project" grants defined below. Tables A-1 and A-2 present summary groups of apportionment formulas, indicating for each program the major factors employed in the formula (population, personal income, and other factors). In table A-1, the listing is in groups determined by the general design of the formula. In table A-2, the listing is in groups determined by the subfunctions in which these programs are carried in the Federal budget. Table A-3 describes each formula in detail. References to "formula category" in the final column of table A-3 identify the "type of formula" in which each program is classified in table A-1. (b) Project grants.-Project grants are allotted in response to specific applications presenting particular proposals for outlays for which assistance is requested. In terms of the number of separate programs, project grants are more numerous than apportionment formula grants. Among Federal grant authorizations early in 1966 (when the number was smaller than in the present compilation), some 88 were subject to apportionment formulas of one kind or another and some 228 might be characterized as project grants not subject to apportionment formulas. The Department of Health, Education, and Welfare administered 54 of the grants with apportionment formulas and half of the project grants. Nevertheless, the apportioned-formula grant was the more important type financially, because of the large sums involved in highway and public assistance programs. (c) Formula-and-project grants.-In many instances, a general formula is used to set limits on the amount which may be paid in any one State or other area, but each actual grant payment is made only upon approval of an application for a specific project. In the column on "method," these programs are described by compound entries, such as "Formula and project" or "Project and formula." Other expressions also are used, often with essentially the same meaning but sometimes to indicate more specifically the method of determining participants' shares in a Federal appropriation. Following are several examples of entries used in such cases: Formula-may be used for approved projects. Formula-additional project grants may be authorized. Formula and project, with additional project grants. Formula apportionment and State plan. Project, with minimum to State. Project, with formula to determine amount. Project-formula is used to determine amount for each in stitution. (7) The maximum Federal share of expenditures for the assisted program or services of the grant recipients. This is an abbreviated method of indicating matching requirements prescribed for individual |