Specifically, S. 186 would establish a Criminal Justice Facilities Administration in the Department of Justice to make grants to States in the amount of $6.5 billion for the period October 1, 1982 - September 30, 1988, for acquiring, building, modernizing, and equipping criminal justice facilities. S. 186 would also grant authority to the Secretary of Treasury to subsidize the interest on State and local bond issues for criminal justice facilities to bring the interest rate down to 5 percent. State and local officials generally support the legislation, arguing that prison and jail overcrowding is at a crisis stage. A witness from New York argues, however, that the bill should be more flexible in how funds are spent, since criminal justice systems have differing needs. The Justice Department opposes S. 186 on the grounds that State and local governments must assume the responsibility for the construction of criminal justice facilities. It is argued that the substantial expenditures required under S. 186 cannot be justified under current budgetary goals and objectives. Witnesses' prepared statements, additional statements for the record, questions and answers, and the proposed legislation are provided.