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reserve fund, to deposit such payment in his capital reserve fund, or (b) to pay part of the loan to discharge an existing mortgage which is insured by the Secretary of Commerce on the vessel that is subject to the mortgage which is to be insured, or (c) to deposit part or all of the loan in the operator's capital reserve fund, if he is a subsidized operator, and in a construction reserve fund, if he is an unsubsidized operator; if any deposit is made in a capital reserve fund, or construction reserve fund under (c) hereof, such deposit may be withdrawn only to pay one of the components of actual cost of the vessels that are to be constructed, reconstructed, or reconditioned, or if for any reason such payments do not exhaust the deposit, then to pay off the loan secured by the mortgage that is to be insured;

(7) the mortgage complies with all of the requirements of section 1104(a) of this Act (which defines an eligible mortgage) except subdivision 2 thereof (which specifies the maximum principal amount of the mortgage), subdivision 3 thereof (which specifies the maximum duration of the mortgage), and subdivision 8 thereof (which specifies the purpose of the loan secured by the mortgage);

(8) the mortgaged vessel shall be in Class A-1 American Bureau of Shipping, with all required certificates, including but not limited to marine inspection certificates of the United States Coast Guard, with all outstanding requirements and recommendations necessary for retention of class accomplished, unless the Secretary of Commerce permits a deferment of such repairs, and shall be tight, staunch, strong and well and sufficiently tackled, appareled, furnished and equipped, and in every respect seaworthy and in good running condition and repair and in all respects fit for service.

[SEC. 1107] SEC. 1108. Whoever, for the purpose of obtaining any loan or advance of credit from any person, partnership, association, or corporation with the intent that such loan or advance of credit shall be offered to or accepted by the Secretary of Commerce for insurance, or for the purpose of obtaining any extension or renewal of any loan, advance of credit, or mortgage insured by the said Secretary of Commerce, or the acceptance, release, or substitution of any security on such a loan, advance of credit, or for the purpose of influencing in any way the action of the said Secretary of Commerce under this title, makes, passes, utters, or publishes, or causes to be made, passed, uttered, or published any statement, knowing the same to be false, or alters, forges, or counterfeits, or causes or procures to be altered, forged, or counterfeited, any instrument, paper, or document, or utters, publishes, or passes as true, or causes to be uttered, published, or passed as true, any instrument, paper, or document, knowing it to have been altered, forged, or counterfeited, or willfully overvalues any security, asset, or income, shall be guilty of a misdemeanor and punished as provided under the first paragraph of section 806(b) of this Act.

[SEC. 1108] SEC. 1109. The Secretary of Commerce is authorized and directed to make such rules and regulations as may be deemed necessary or appropriate to carry out the purposes and provisions of this title.

[SEC. 1109] SEC. 1110. There is hereby authorized to be appropriated the sum of $1,000,000 and such further sums as may be necessary to carry out the provisions of this title.

86TH CONGRESS HOUSE OF REPRESENTATIVES 1st Session

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REPORT No. 633

ENACTING THE PROVISIONS OF REORGANIZATION PLAN NO. 1 OF 1959 WITH CERTAIN PROVISIONS

JULY 3, 1959.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

Mr. DAWSON, from the Committee on Government Operations, submitted the following

REPORT

[To accompany H.R. 76811

The Committee on Government Operations, to whom was referred the bill (H.R. 7681) to amend the provisions of Reorganization Plan No. 1 of 1959 with certain amendments, having considered the same, report favorably thereon with amendment and recommend that the bill as amended do pass.

The amendment is as follows:

Page 4, line 20, after the word "Interior", delete the period and add ", and under regulations approved by the Secretary of the Interior and the Secretary of Agriculture."

PURPOSE OF H.R. 7681

H.R. 7681 would enact the basic provisions of Reorganization Plan No. 1 of 1959, with certain amendments which the committee believes are needed to protect the public interest. The committee held hearings on the plan and found it subject to several serious objections. The committee also recognized that the plan would achieve several useful purposes and would contribute to the public interest if its objectionable features were eliminated. However, under the Reorganization Act of 1949, as amended (5 U.S.C. 133z), no provision is made whereby either the Congress or either House can amend the plan as such, without separate legislation. Accordingly, the committee recommended the adoption of House Resolution 295 to disapprove the plan (see H. Rept. 586, 86th Cong.), and also recommends adoption of the bill (H.R. 7681), as amended, which would enact the beneficial features of the plan, together with the amendments to the plan which the committee believes are essential to safeguard the public interest.

59014 Res., Vol. 4, O-61

MAJOR PROVISIONS OF THE REORGANIZATION PLAN

The principal effects of Reorganization Plan No. 1 of 1959, as transmitted by the President, would be as follows:

(1) It would transfer to the Secretary of Agriculture all the functions of the Secretary of the Interior in making exchanges of public national forest lands for private lands and in making sales of such lands, except the purely ministerial function of issuing patents or conveyances for such land.

(2) It would transfer to the Secretary of Agriculture all the functions of the Secretary of the Interior in selling certain mineral materials on acquired national forest land.

(3) It would specifically authorize the Secretary of Agriculture to redelegate the functions transferred to him by the plan to any officer or employee of the Agriculture Department pursuant to section 4 (a) of Reorganization Plan No. 2 of 1953 (67 Stat. 633).

OBJECTIONS TO REORGANIZATION PLAN NO. 1 OF 1959

(The objections to the plan can be summarized as follows:)

1. The plan would vest in the Secretary of Agriculture unfettered power, when consummating an exchange, to dispose of valuable mineral resources of the United States, including oil, gas, coal, and other leasable minerals, as well as copper, gold, silver, and other metalliferous minerals, without any check whatsoever with the Interior Department or any review by its technical agencies. The Interior Department has the primary responsibility for surveying and protecting the mineral assets of the United States, and its agencies are the primary repositories of information regarding them.

2. In taking away from the Secretary of the Interior the power to apply the national mineral policies to lands involved in forest exchanges, the plan would destroy a system designed to separate the administration of the surface and of the minerals and certain other aspects of public lands reserved in national forests. This system was carefully worked out and developed in the act of February 1, 1905 (33 Stat. 628; 16 U.S.C. 472), and generally adhered to in legislation and practice since that date. Only minor responsibilities for the administration or disposition of the mineral aspects of public or acquired lands have been given to the Secretary of Agriculture without reference to the Secretary of the Interior, such as the disposition from reserved public lands of common varieties of mineral materials under the Materials Act of July 23, 1955 (30 U.S.C. 601 et seq.); and the exchange of acquired lands, including mineral interests therein, under the Weeks Act (16 U.S.C. 516 et seq.)

3. Evidence presented to the committee showed that in 21 percent of the public land forest exchanges in the last 5 years (26 out of 120), the minerals in the forest lands were reserved for the United States on the basis of information supplied by the Interior Department. It was also shown that in 10 percent of the exchanges (12 out of 120), the Agriculture Department had not contemplated such a reservation in approving the exchange and that the reservations were added solely as the result of review by the Interior Department. Hence it is clear that the mineral functions heretofore performed by the Secretary of the Interior, proposed to be transferred to the Secretary of Agriculture,

have been a very significant factor in protecting the public interest in minerals owned by the United States. This protective factor would be largely discarded by the plan.

4. The plan would open the possibility of considerable procedural confusion in determining the validity of mining claims on national forest lands.

5. From a practical standpoint, as the plan is worded, it is virtually impossible to determine with certainty which "mineral materials" the Secretary of Agriculture will be authorized to sell under section 1(1) of the plan. Such authority might be construed to include sales of valuable metalliferous and nonmetalliferous minerals, contrary to the apparent intent of the drafters of the plan.

6. The plan would make the functions transferred to the Secretary of Agriculture subject to the redelegation authority of section 4(a) of Reorganization Plan No. 2 of 1953, but omits the public notice safeguards of section 4(b) of the 1953 plan.

7. The plan would at best cause only minor savings and would involve only 30 cases a year (out of over 150,000 processed by the Bureau of Land Management of the Interior Department). The benefits to be gained from the plan are far outweighed by the disadvantages described above.

8. The good features of the plan can be secured and the public interest can be adequately safeguarded by the provisions of H.R. 7681. The foregoing objections are set forth in greater detail in an excerpt from House Report 586, 86th Congress (pp. 5-12) which appears below in appendix 1 of this report.

WHAT THE BILL WILL ATTAIN

The bill would enact the positive and beneficial features of the plan, which are set forth in sections 1 and 2 of the plan. In addition, the bill makes several amendments to the plan. These amendments would (1) insure that the Secretary of the Interior would continue to have responsibility and functions with respect to minerals; (2) insure that the Secretary of Agriculture would not assume the function of determining or adjudicating the validity of mining claims which conflict with forest exchange or sale applications; (3) insure that the Secretary of Agriculture would not, under the Materials Act, dispose of minerals subject to the mineral leasing or mining laws; and (4) omit a reference in the President's plan which permits a broad and unlimited delegation and which does so free of any obligation to provide advance public notice and opportunity for the public to comment on the proposed delegation.

The committee believes that the enactment of the bill will eliminate duplication of work on such matters as approval of legal titles, processing of papers through the land office, publication of notices of pending exchanges, cross-checking between the departments on the status of cases being processed, and in other respects. The bill will also remove inconveniences to the public which have resulted from the fact that persons wishing to make exchanges or to purchase certain lands or certain common mineral materials on forest lands must deal with two offices one in the Agriculture Department and one in the Interior Department. Under the bill all dealings by the public on the subjects. covered would be solely with the Forest Service of the Department of

Agriculture. Any cross-checking that may be required can be accomplished by the Forest Service at the same time it is processing other phases of the transaction and thus all delays now found in the relationship of the two departments can be avoided.

COMPARISON BETWEEN H.R. 7681 AND REORGANIZATION PLAN NO. 1 OF 1959

I. The bill and the plan are alike in the following respects: 1. Section 1 of the bill is identical with section 1 of the plan. This section transfers to the Secretary of Agriculture the following authority of the Secretary of the Interior: (a) to deal with exchanges of private lands for national forest lands; (b) to issue certain quitclaim deeds where exchanges are not consummated; (c) to sell certain lands in national forests; and (d) to dispose, under the Materials Act of 1947, as amended (30 U.S.C. 601 et seq.), of mineral materials in acquired lands in the national forests.

2. Section 2(d) of the bill combines, without substantial change, the provisions of sections 2(a) and 2(c) of the plan. These provisions authorize the Secretary of the Interior to issue patents when the Secretary of Agriculture has approved a forest exchange or sale.

3. Section 2(e) of the bill is identical with section 2(b) of the plan. This provision authorizes the Secretary of the Interior to make conveyances of forest lands in Minnesota when the Secretary of Agriculture approves the exchange.

II. The bill differs from the plan in the following respects:

1. Under the plan, the Secretary of the Interior would have only the ministerial functions of issuing patents and deeds of conveyance when the Secretary of Agriculture approves the exchange or sale of national forest lands. Section 2(a) of the bill would require the Secretary of the Interior to participate in and approve determinations involving (i) whether lands are mineral or nonmineral in character, (ii) whether or not minerals shall be reserved to the United States, and (iii) the value of mineral rights in land; and, as amended by the committee, the bill further requires that any regulations made concerning the matters covered by section 2(a) must be approved by the Secretary of the Interior and the Secretary of Agriculture.

2. At the hearings on the plan, all witnesses (including those of Agriculture, Interior, and Budget Bureau) stated that the plan was not intended to transfer to the Secretary of Agriculture the authority to determine or adjudicate the validity or invalidity of mining claims in case of a conflict with a forest exchange or sale application. In order to avoid the implication which might flow from the language of the plan purporting to transfer all functions with respect to the exchanges and sales specified in section 1 of the plan, section 2(b) of the bill would put into statutory language the intention stated by the departmental witnesses.

3. At the hearings on the plan, the departmental witnesses stated that section 1(1) of the plan was intended to transfer to the Secretary of Agriculture only the authority to dispose of sand, stone, gravel, pumice, pumicite, cinders, and clay on acquired lands. However, they admitted that the language of section 1(1) of the plan was such as to raise a legal question, which might require submission to the departmental legal officers, as to whether it might include authority

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