extends to supporting the development of human and other resources likely to be needed for future programs, but not necessarily directly related to identifiable short-range program needs. For example, within the next 10 years agronomists specially trained to deal with the varying requirements of different countries and cultures are likely to be needed for AID programs. At this time, however, it may not always be possible to identify the exact programs in which these agronomists would be used.

Under the amendment, AID will be able to help selected colleges, universities, and research institutions create programs that will permit them to participate effectively in the development process. Such assistance would create permanent institutional facilities upon which AID could draw for development programs and would help these institutions meet the burden on personnel and financial resources and academic programs caused by their contribution to these programs. Without this assistance these institutions would not always be able to support fully the aid program, or conversely, active participation in AID overseas programs might result in a serious drain on faculty and other resources.

Assistance would continue to be furnished only to institutions making a commitment, in terms of personnel, financial participation, and academic programs, to participate actively in the development process.

Section 103(b). Authorization

This section amends section 212 of the act, which relates to the authorization for technical cooperation and development grants, by substituting for the obsolete fiscal year 1966 authorization an authorization of $231,310,000 for fiscal year 1967.

Section 103(c). American schools and hospitals abroad

This section amends section 214(c) of the act, which relates to the authorization for American schools and hospitals abroad, by substituting for the obsolete fiscal year 1966 authorization an authorization of $10,989,000 for fiscal year 1967.

Title III. Investment guaranties

Section 104(a)(1). Specific risk guaranty ceiling

This section amends the proviso to section 221(b)(1) of the act by increasing from $5 billion to $7 billion the total face amount of specific risk guaranty contracts that may be outstanding at any one time. This increase is designed to provide sufficient issuing authority for the specific risk guaranty program.

Section 104(a)(2). Extended risk guaranty ceilings

This section amends the third proviso to section 221(b)(2) of the act in two respects. First, it increases from $300 million to $375 million the total face amount of extended risk guaranty contracts that may be outstanding at any one time. This increase is designed to provide sufficient issuing authority for the extended risk guaranty

program.

Second, it increases from $175 million to $250 million the amount. of the authorized total which may be used for other than housing projects, thereby maintaining the requirement that $125 million of the total amount authorized for extended risk guaranties be reserved for housing projects.

Section 104(a) (3). Extended risk guaranty termination

This section amends the fourth proviso to section 221(b) (2), which relates to the termination date for the authority to issue extended risk guaranties, by extending the present termination date of June 30, 1967, to June 30, 1969.

In line with past practice, the termination date is extended 2 years beyond the authorization period to assure those eligible investors who start planning before June 30, 1967, but are unable to complete their investments by that time, against the possibility that the extended risk program may lapse in 1967.

Section 104(b). Latin American housing guaranties

This section amends the final proviso to section 224 (c) of the act, which relates to Latin American housing project guaranties, by extending the termination date for the authority to issue such guaranties from June 30, 1967, to June 30, 1969.

Title VI. Alliance for Progress

Section 105(a). General authority

This section amends section 251(b) of the act by adding a new sentence which provides that Alliance for Progress funds not required to be used for loans (i.e., technical cooperation and development grant funds) shall be available for the purposes of the new section 211(d) of the act. Section 211(d) is added to the act by section 103(a) of the bill.

Section 105(b)(1). Authorization

This section amends section 252 of the act, which relates to the authorization for the Alliance for Progress, by substituting for the obsolete authorization for the fiscal years 1963 through 1966 an authorization of $850 million for each of the 5 fiscal years 1967 through 1971. The section also substitutes for the obsolete ceilings for each of the fiscal years 1963 through 1966 a ceiling of $100 million for each of the fiscal years 1967 through 1971 on Alliance for Progress funds available for use on a basis other than dollar-repayable loans (i.e., for technical cooperation and development grants). The previous authorization for the Alliance for Progress was for a 4-year period.

Section 105(b)(2). Presentations to the Congress

This section amends the second sentence of section 252 of the act, which required the President, in presenting requests to the Congress for authorizations for appropriations for the fiscal year 1964 through 1966 to carry out other programs under the act, to present also the proposed Alliance for Progress program, by substituting "1968 through 1971" for "1964 through 1966".

Section 105(b) (3). Encouragement of private enterprise

This section amends section 252 of the act to make that section. applicable to the fiscal years 1967 through 1971, respectively. Section 252 requires that not less than 50 percent of the loan funds appropriated for the Alliance for Progress shall be available for loans made to encourage economic development through private enterprise. Title VIII. Southeast Asia multilateral and regional programs

Section 106

This section amends chapter 2 of part I of the act, which relates to development assistance, by adding a new title VIII relating to

southeast Asia multilateral and regional programs. The new title emphasizes the special significance of the expanded southeast Asia development program which the President proposed in his speech delivered at Johns Hopkins University on April 7, 1965.

Section 271, which relates to general provisions, is the first section of the new title. Subsection (a) affirms the importance of social and economic progress in achieving the U.S. foreign policy objectives of peace and stability in southeast Asia. It expresses the sense of Congress that these objectives would be served through an expanded effort by the countries of southeaset Asia and other interested countries in both multilateral and bilateral cooperative programs for the social and economic development of the region.

Subsection (b) of section 271 authorizes the President to furnish assistance to promote social and economic development and stability in southeast Asia through multilateral institutions and through multilateral or bilateral programs or projects which serve regional development pruposes. Assistance may be furnished on a grant or loan basis on such terms and conditions as the President may determine.

The multilateral assistance contemplated may be furnished through the International Bank for Reconstruction and Development; special funds administered by the Asian Development Bank; programs sponsored, planned, or coordinated by the Mekong Development Committee; consortia of donors organized to support particular projects and programs; or other similar bodies or programs.

In addition, bilateral programs or projects which serve regional development purposes are eligible for assistance under this title. For example, bilateral assistance may be provided to educational institutions which are not established on a multilateral basis but which draw students from throughout the region and have a significant impact in regional cooperation and development.

Section 272 of the new title relates to special provisions. It sets out criteria which the President shall take into account in providing assistance for the purposes of this title. These criteria are designed to encourage Asian initiatives in development and stimulate regional cooperation in solving commom problems. In addition, the President is required to consider the extent of participation by other donors as well as the degree of cooperative activity among the countries of southeast Asia. Finally, the President must take into account the competence of administering authorities and institutions, such as the new Asian Development Bank, to carry out development projects and programs.

Section 273 of the new title authorizes appropriation to the President for fiscal year 1967 of such funds as may be necessary to carry out the purposes of this title.

CHAPTER 3. INTERNATIONAL ORGANIZATIONS AND PROGRAMS

Section 107(a).-Indus Basin development

This section amends section 301(a) of the act to authorize funds. appropriated for international organizations and programs to be used for dollar-repayable loans in connection with the Indus Basin Development Fund administered by the International Bank for Reconstruction and Development (the World Bank). These loans would be subject to the restrictions on development loan terms contained in section 201(d) of the act.

Section 301(a) now authorizes contributions from funds appropriated for international organizations and programs to be made only on a grant basis. This authority is now used to make grants for Indus Basin development.

In 1964 the U.S. Government made a commitment in the form of an executive agreement, subject to appropriation of the necessary funds, to loan to Pakistan $51,220,000 for Indus Basin development, to be administered by the World Bank. Although this loan could be funded. under the authority of section 201 of the act, by funding it under international organizations and programs, both grants and loans for Indus Basin development would be consolidated in one chapter. Section 107(b).-United Nations development program

This section effects a technical change in section 301(b) of the act by substituting "United Nations Development Program" for "United Nations Expanded Program of Technical Assistance and the United Nations Special Fund" to reflect a recent consolidation and name change.

Section 107 (c). Authorization

This section amends section 302 of the act, which relates to the authorization for international organizations and programs, by creating separate subsections for the existing grant authorization and for the new Indus Basin loan authorization.

First, a new subsection (a) substitutes for the obsolete fiscal year 1966 grant authorization a grant authorization of $140,433,000 for fiscal year 1967.

Second, a new subsection (b) adds a new authorization for the appropriation of funds, in addition to other funds available for Indus Basin development, for dollar-repayable loans for the Indus Basin program. The funds are authorized for use beginning in the fiscal year 1968, when it is expected that the World Bank will request that the United States meet its 1964 commitment.

Third, a new subsection (c) reenacts the last sentence of section 302 of the act, which prohibits use of funds authorized under chapter 3 for contributions to international organizations or foreign governments to pay the costs of developing or operating volunteer manpower programs.

CHAPTER 4. SUPPORTING ASSISTANCE

Section 108. Authorization

This section amends section 402 of the act, which relates to the authorization for supporting assistance, in the following respects: First, it provides for an authorization of $200 million for the fiscal year 1967.

Second, it deletes the obsolete second sentence of section 402, which required that not less than $200 million of the supporting assistance funds made available in fiscal year 1965 be used in Vietnam.

Third, it adds an authorization of $550 million for fiscal year 1967 for supporting assistance in Vietnam.

Fourth, it provides authority for the transfer of supporting assistance funds made available for use in Vietnam for administrative expenses incurred in connection with programs in Vietnam. The same authority has been requested with respect to the supporting assistance supplemental appropriation now under consideration by

the Congress. Section 610(b) of the act does not now permit a transfer for this purpose. This flexible authority is needed because of the difficulty of estimating at this time the additional administrative expenses resulting from increased economic assistance programs in Vietnam. The provisions of section 610(a) of the act (percentage limitations on transfers and the requirement for a Presidential determination that a transfer is necessary for the purposes of the act) will be applicable to the transfer of funds from the supporting assistance account to the administrative expense account.

CHAPTER 5. CONTINGENCY FUND

Section 109 (a). Authorization

This section amends section 451 (a) of the act, which relates to the authorization for the contingency fund, by providing for an authorization of $150 million for the fiscal year 1967.

Section 109 (b). Southeast Asia authorization

This section deletes the obsolete last sentence of section 451(a) of the act, which authorized a separate contingency fund for use in southeast Asia in fiscal year 1966.

Section 109 (c). Reports to the Congress

This section effects a technical change in section 451(b) of the act, which relates to reports to the Congress with respect to the contingency fund, by striking out the words "the first sentence of".

PART II

CHAPTER 2. MILITARY ASSISTANCE

Section 201(a). Authorization

This section amends section 504 (a) of the act, which relates to the authorization for military assistance, by substituting for the obsolete fiscal year 1966 authorization an authorization of $917 million for fiscal year 1967. The authorization excludes the support of Vietnamese and other free world forces in Vietnam, which is provided for in other legislation.

Section 201 (b). Reimbursements

This section amends section 508 of the act, which relates to the special fund account for financing sales, by making two changes in the bookkeeping for the account. Under existing law, when new obligational authority-as distinguished from money already in the account-is obligated to finance a sale, the unliquidated balances of the funds so obligated cannot be shown in the President's budget as an asset of the account. The first of the two changes made by this section of the bill provides for transfer to the special fund account of the unliquidated balances of new obligational authority heretofore obligated for financing sales and guaranties. To conform with this change, the amendment also provides for the transfer into the account. of subsequent new obligational authority. As a rseult of these bookkeeping changes, it will be legally possible for the President's budget to show fully the foreign military sales program proposed to be carried -out during the budget year and the complete status of the account.